Vermont Cannabis Startup Guide

Starting a cannabis company in Vermont? We’ve put together a state-specific guide covering everything from available license types to fees, regulations, and what you should include in an Vermont cannabis business plan. Jump to a section by clicking below, or go straight to our sample cannabis business plan.

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Overview
Cannabis license types
Fees and other barriers to entry
Are cannabis business plans required in Vermont?
What to include in a business plan
How to research city regulations
Helpful links
Get expert help

Overview of legal cannabis in Vermont

Recreational and medical marijuana are both legal in Vermont. Patients with a recommendation from a healthcare provider in Vermont, Massachusetts, New Hampshire, or New York can possess up to 2 ounces of usable cannabis every 30 days. Adults can have up to 1 ounce for recreational use, but home cultivation is not allowed. Over 4,500 patients have registered for Vermont’s medical marijunana program

Vermont legalized recreational sales of marijuana in October 2020, and the state’s medical marijuana businesses will be allowed to sell to adults over the age of 21 beginning in May 2022. Additional cannabis licenses are expected to start selling products in October 2022. Consequently, things are changing fast. If you're interested in starting a recreational cannabis business in Vermont, we recommend that you subscribe for updates from the Cannabis Control board here.


Vermont business license types

The Vermont cannabis regulation calls for six types of recreational licenses:

Rretailer: Also called a dispensary, this is a retail storefront where people can purchase marijuana. Dispensaries must follow strict state-mandated protocols for product tracking, security, recordkeeping, and signage.

Cultivator: These businesses, also called grow operations, grow cannabis plants indoors or outdoors. Marijuana is then either sold through a dispensary, to a wholesaler, or to a processor that will create products with it, such as edibles or oils.

Integrated: Vertically integrated cannabis businesses grow, process, and sell cannabis to the public.

Product Manufacturer: Product manufacturers buy cannabis flower from licensed cultivators, then process into extracts and/or create infused products such as edibles and sell them to dispensaries.

Wholesaler: Cannabis wholesalers buy marijuana in bulk, then sells it to other cannabis business license-holders (not the public).

Testing lab: Testing labs test marijuana for pesticides, solvents, THC and CBD concentration, and contaminants.

Ancillary business: There are plenty of other ways to be part of Vermont’s booming cannabis industry. You can create a marijuana app, payment processing service, advertising agency, consulting firm, pest management product, accounting firm, automated plant watering system, security service, packaging labeling service, or legal firm--and that’s just the tip of the iceberg!


Fees and other barriers to entry


Local governments can forbid cannabis companies or certain locations, so check city and county regulations.

Application fees: Vermont has yet to finalize it's application fees.

License fees: Vermont has yet to finalize it's application fees.

Tracking: Vermont will require all cannabis business to use a state-approved tracking system.

Background Check: All Vermont applicants must consent to a release of criminal and administrative history


Do you need a cannabis business plan in Vermont?


Vermont adult-use cannabis businesses will require an operations plan, which is a key part of a cannabis busines plan. Specific requirements for the operations plan is pending. If you plan on raising funding from investors, you definitely need a business plan.

What to include in your business plan


Here’s what an Vermont marijuana business plan should include:

  • Product/service description: Will you run a dispensary, grow operation, testing lab, processor, wholesaler, consulting firm, or something else? What’s unique about your business? Be as specific as you can. If you’ll open a marijuana dispensary, which strains of flower or whose manufactured products will you sell?

  • Market research: If you’re opening a dispensary, how many people live within five miles? If you’ll wholesale flower or edibles, how many dispensaries will you sell to? If you’re creating an app, who will be the user base, and why would they use your app instead of someone else’s? Use concrete numbers verified by a third party whenever possible (instead of estimates).

  • Competitors: Who will you compete with, both directly and indirectly? What do they do well and poorly? What is their online reputation? How will you differentiate your company?

  • Management team: Summarize your qualifications and those of others on your management team. (Think of it as a shorter, “greatest hits” version of your resume.) Include cannabis industry experience, as well as leadership skills, customer service, and business development experience in other industries.

  • Financials: This part can be tricky. You need a five-year financial forecast, including projected annual revenue, operating expenses, costs, and net profit. Each year’s projected revenue should include not only revenue but also your margin and direct costs. You can forecast revenue by estimating how much product you think you’ll sell (based on market potential), your retail price, your production cost, and how much you’ll spend on payroll, rent, and other expenses. Your cash flow statement will show that you’ll have enough cash to stay operational. You might want to include a sensitivity analysis (best- and worst-case scenarios), which shows 15% higher and 15% lower revenue than your initial forecast. For marijuana cultivators, it’s important to do a sensitivity analysis based on future potentialities of the wholesale price per pound. You can also include a break-even analysis, showing which month you will be profitable.

  • Vermont-specific requirements: Vermont applicants will be required to submit an operations plan. You should include details about your security system, product tracking, secure product transport, manufacturing waste plan, and anything else required by the state.

  • Investor proposal: If you are presenting your plan to investors, how are you valuing the shares? Consult with your attorney to make sure you are within state and federal compliance. Sometimes, you’ll need your attorney to draw up an offering memorandum, often called a private placement memorandum (PPM). A PPM informs potential investors on the details of the investment vehicle (your company) and potential risks associated with the investment.

How to research city regulations

Google your city or municipality name and “cannabis regulations” or “marijuana laws”. If your city or municipality’s website doesn’t have information about cannabis, check recent local news coverage or contact your city clerk, city manager, or town hall.


Helpful Links


Get expert help


Confused or overwhelmed yet? That’s normal. With such a highly regulated industry, and one with different rules in every state, starting a cannabis company can be very complex. Get help with your cannabis business plan from Masterplans, the industry leaders. We’ve worked with hundreds of cannabis entrepreneurs like yourself to create investor-ready documents and presentations so you can not only meet regulations but get the funding you need. Click below for your free, confidential consultation:

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