Vermont’s adult-use cannabis industry took off with a bang. According to the Vermont Department of Taxes, Vermont cannabis stores sold $2.6 million worth of product in October, the first month of legal cannabis sales.
“It really is just kind of tracking pretty closely with what our projections were,” Brynn Hare, executive director of the Vermont Cannabis Control Board told Seven Days. “If you carry those numbers out—if we continue to get licenses out, we get the tourist revenue that we were anticipating into the state—then I think we’re on track to hit our projection for [fiscal year 2023].”
According to James Pepper, chair of the Vermont Cannabis Control Board—$2.1 to $2.4 million in excise taxes could be collected during the first nine months of cannabis sales. That translates to around $233,000 to $267,000 per month. “They look pretty much like our projections were accurate,” Pepper said.
Seven Days reports that Vermont legislature’s Joint Fiscal Office predicted higher numbers, with annual sales estimates ranging from $3.3 million to $9.1 million, translating to monthly excise tax revenues of $275,000 to $758,000.
In 2020, Vermont became the 11th state to tax and regulate cannabis. Two years later, sales figures are beginning to show the rewards. Adult-use cannabis sales officially launched in Vermont recently, with stores in three communities opening their doors to customers.
The three retailers to open this weekend were FLORA Cannabis in Middlebury, Mountain Girl Cannabis in Rutland, and CeresMED in Burlington, according to the Associated Press, which noted that a “fourth business has been licensed to sell recreational pot but isn’t ready to do so yet.”
Vermont’s 2018 law, which was signed by Republican Gov. Phil Scott, did not establish a regulatory framework for an adult-use cannabis market, making Vermont an outlier compared to other states with legal cannabis. That changed two years later in 2020, when lawmakers in the state approved a bill that set up a regulated marijuana industry.
Vermont’s Cannabis Tax Structure
Officials also say the state has collected $329,231 in excise tax revenue—set at 14%—in the past two months since sales began. Patrons must also pay Vermont’s 6% sales tax on general sales, which amounted to another $144,000 for the state.
“Those numbers are actually right on track with our projected numbers from our financial model,” Nellie Marvel with the Vermont Cannabis Control Board told WCAX. The state now has two dozen stores and Marvel says they are expecting tax dollars to steadily increase. “The number of retailers that are open, the price of cannabis—and the price of cannabis, of course, is a function of the number of cultivators that are licensed, the size of their harvest—and the state’s tourism numbers.”
Under Vermont law, a portion of the excise tax revenue is allocated to fill any deficit in the control board’s budget. Regarding the rest of the excise tax revenue, 70% goes to the state general fund, and 30% goes towards substance abuse and prevention funds. Cannabis sales tax revenue is earmarked for after-school and summer learning programs.
According to the latest count, the control board approved licenses for 36 cannabis shops throughout the state.
Cannabis stores are stocking up in anticipation of busier days during the holidays. “Wednesday was awesome,” Sarah Coshow, director of retail operations at Green State Dispensary, told My Champlain Valley. “Everyone preparing to go home to the family. They did a lot of preparation by standing in line and picking up some pre-rolls and edibles.”