The Vermont Cannabis Control Board could limit the number of new grower licenses this spring in an effort to avoid the type of market crisis that has plagued other states that have legalized recreational cannabis.
In those states, too many growers entered the cannabis market after it came online, leading to an oversupply of products. Those gluts then led to drastic price reductions, putting many growers in a dangerous financial position.
Recently, Chairman James Pepper told lawmakers that the Cannabis Control Board is prepared to act, because the state's retail marketplace has some unusual characteristics compared to other markets.
"There's no legal outlet to move cannabis if there is an oversupply in the Vermont market — there's no way to legally move it to another state where there might be a supply shortage," Pepper said.
Pepper made his comments as lawmakers consider a bill making miscellaneous changes to Vermont's cannabis programs. Pepper said Vermont's new cannabis industry needs constant vigilance from state officials who are balancing competing priorities.
"The board feels a responsibility to make sure that folks that jumped into this industry aren't — because they put up their own money, and their own capital, and their own sweat equity — aren't in a worse position, you know, two or three years down the road than if they'd just stayed on the illicit market to begin with," Pepper said.
Last year, the board issued almost 300 cultivator licenses. Roughly 80 percent were given to small growers.
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