 Good afternoon Vermont I call this meeting of the advisory this meeting is being recorded and or transcribed. Well it's order on Tomalasko I'll now take roll for our subcommittee members beginning with Mark Gorman, Dan Smith, here, Jen Flanigan, Siobhan Patel, I think he's in the room, Stephanie Smith, you're able to meet over there, Chris Wall, President, and from the cannabis board Chairman Pepper, I'll just, yeah I'll review who's in the room here, if you don't mind, so it's James Pepper, Chair, Kyle Harris, Member of the Canada's Control Board, Julie Holverd, Member, we have Brynn Hare, our Executive Director, Nellie Marvel, and then we have three members of the public. Perfect. So thank you everyone for your attendance, green to you all, thank you for making the effort and having the interest to attend this subcommittee meeting, this is our first subcommittee meeting, I wanted to do brief, I wanted to emphasize brief because we have a much to do and discuss, intros for the members on the subcommittee performing on with our agenda, I'll be speaking very quickly just because of time constraints, again on Tomalasko I'm General Counsel for the National Association of Cannabis Businesses of the NCP, National Trade Organization that specializes in creating standards and best practices for the cannabis industry, the goal is to legitimize and elevate the growth that's growing cannabis marketplace and part of our function at the NACB to consult with state legislators and regulators as we're doing in this engagement, my background now is the 20 plus year attorney, specializing in business commercial litigation, I've been in the cannabis phase for seven or eight years starting with partnership disputes with cannabis that grew to compliance, employment real estate issues, any issues that a good startup has served on panels for the Arizona State Bar where I'm based and then that led to panels throughout the country on issues like 280 licensing, social equity, so my privilege to help coordinate these various subcommittee meetings and create good policy for the state of Vermont, so before getting into the introductions for very knowledgeable and accomplished advisory committee members I wanted to introduce Mark Gorman and then go on to Dan Smith and Jen Flanagan who will be leading this subcommittee. Mark? Thanks Tom, I'm Mark Gorman, I'm the NACB for about a year and a half prior to that and I'm the executive vice president and chief government person for NACB. Before that I spent about 20 years in another highly regulated industry, the distilled spirits industry and surprisingly spent about 60% of the last years tracking cannabis and you know the market, what was going on in the market and legalization and so forth, so I've been working on this now for close to 10 years and we got all that background with distilled spirits as well which I think will come in handy sometimes with our discussions. Thanks Mark and I'm sorry I was remiss, part of the role called Jeff Gallegos for the NACB this year as well, Jeff do you want to give a brief instruction? My name is Jeff Gallegos, I'm the re-court attorney for NACB, I live in Los Angeles, California. My background is as a musician and I've been around cannabis for a long time so I'm happy to be here. Thank you. Thank you Jeff another lawyer, Dan Smith. Hey everyone, my name is Dan Smith, I am vice president at BS Strategies which is a cannabis policy and public affairs consulting firm. We are partnering with our sister organization, the Tante Cedarburg Law Firm, are one of the consultants for the state of Vermont right here and while NACB is kind of running the the advisory committee subgroups that brought us on to help with this one so you'll be seeing a lot of our faces over the next few weeks. So my background is I do a lot of state level policy around the country for various clients all cannabis related. Before I've been with BS Strategies for approaching three years now before that I was in the Massachusetts, I worked for the senator in the Massachusetts legislature where I was the lead staffer for the adult youth field that moved through there and signed into law in 2017. So there's a couple more folks from my team on the call, one of which I was also in the legislature with back at that time so I'll let them introduce themselves starting with Jen Flanigan. Good afternoon, my name is Jen Flanigan, I am the director of regulatory policy at the BS Cedarburg, the law firm side of the Cedarburg. Prior to this I was a commissioner on the Kansas control commission, I was appointed in 2017 by Governor Baker to be the public health appointee on the commission. Immediately before that I served as a state senator for nine years in the Massachusetts state senate focusing on public health mental health substance use disorder in the life and immediately before that I served for four years in the House of Representatives so I just ended my 25 year career in state government really seeing both sides of legalized cannabis passing the law and creating the law but then implementing it through the regulatory process so I'm happy to be here with my colleague. Thank you Jen and then Jen Andrew, let me ask Andrew, Andrew's you'll be hearing a lot from Andrew today I'll let him introduce himself now but yeah Andrew take the light. Thank you Jen, thank you Tom. So my name is Andrew, I'm the director of economic research at the Cedarburg Law Firm and I'm also a partner at the BS Strategies. My background is in economic analysis and details regulatory policy analysis where over the last eight plus years I've been kind of leading from the space in economic and market analysis for cannabis businesses across the country and across the world and I put together the, what you guys will think, quite detailed market analysis for Vermont. Thank you Andrew. And now to get into introductions for our advisory subcommittee members on this subcommittee Shavon Patel, do you want to say hello and give a brief introduction? Sure. Hi everyone, I've spent the last decade in Vermont entrepreneurial and business community and across regulatory policy in a number of industries but like Mark I spent 10 years in alcohol policy, specifically Vermont alcohol policy so you know I've been on the Vermont side for a long time and I agree with Mark that there should be a lot of parallels. Thank you Simona and Stephanie Smith? Yep, Stephanie Smith with the Vermont Agency of Agriculture. I managed to have program for the agency and have experience in land use planning and environmental permitting. And definitely not Lee. Chris Walsh, do you want to say hello in the intro? Yes, hi Chris Walsh here, similar to Mark and Shavon. I have a 19 year experience with one regulatory market in Vermont, alcohol. I moved up here from Manhattan 2003 purchased Nectars, went from Nectars to co-creating a gross store on Pine Street. I am co-founder of a Vermont organic CBD brand called Upstate Elevator Supply. I am an escapee from one of the MSOs. I ran the IAMFIS asset in branded Vermont for two years as president. I spent a year in Jamaica growing cannabis and hemp in conjunction with the University of West Indies Medical School doing cannabinoid interping research. My day job right now is agricultural technology and I'm also heading up operations for Ben Cohen's new social equity cannabis brand called Ben's Best. Great, thank you Chris. Chairman Pepper, I understand we have two or three other members of the public in the room with you. I wanted to make sure that everyone knows that written public comments can be submitted electronically via the web form on the CCP website and have been since May 2021 and I wanted to ensure everyone that your comments have been received with you and considered by each and every subcommittee member and we appreciate your input. There will be time for public comments and questions toward the end of the hour as there will be with each subcommittee meeting that we have going forward and in addition the cannabis control board will be hosting dedicated meetings for public comments both at a Friday board meeting via the public link or at the CCP's public comment evenings that will also be posted on the website. So your voice will be heard and considered and it's important part of the process but we do have pressing deadlines particularly with this subcommittee and there upon us it's critical we have constructive communication between the board members to meet those deadlines so I don't want the hour to be dominated by public comments. Again you will have an opportunity at the end of each meeting and there are other avenues to address and be heard. So moving forward Dan you know we're all anxious to see and hear the market analysis a lot of the work that's going to be done and accomplished within this subcommittee with these quick deadlines coming up a lot of the other subcommittees are kind of relying on that as well so I will let you take control. Sounds good thanks Tom yeah and just I'll just give us kind of a quick overview of what we were thinking here and kind of our plan because I think it will be a little bit different from some of the other subcommittees so as Tom mentioned there's very quick deadlines for many of these subcommittees but in particular the first deadline coming up kind of overall for the Cannabis Control Board is that by the end of this month for October 1 they're supposed to submit a report to the legislature on license fees so obviously to know what we should recommend for license fees we need to know what type of licenses they're going to be and kind of as the market so a lot of that flows into this subcommittee and so in a very short amount of time we were going to try to put together some recommendation to the board so the board can make a recommendation to the legislature so unlike probably some of the other sub committee meetings today's meeting will probably be less discussion back and forth and more presentation from Andrew I think you all received his the supply and demand model that he put together that I think we're going to try to use to inform some of these decisions I'm seeing some head nods did that not go out to everyone? Superbond you did not get it? Chris did you get it? Yeah. Okay give me one second I'll send it over to you right now to make sure you get it but you will see momentarily that it's a pretty big and complex model so Andrew's going to just kind of walk through some of the assumptions that were made in it and you can kind of see what what it looks like we anticipate the Vermont market could look like so that's going to eat up a bulk of today's meeting I believe the next meeting scheduled for Monday which we will kind of have more open discussion on questions about that you have from from that thoughts about how you want to see the market look things along those lines all of these is building up and then we'll have twice a week meetings we'll have meeting next Monday and next Thursday a meeting the following Monday kind of all building up towards trying to make some recommendations on fees so you probably need to have those by the meeting on August I mean September 23rd so that only gives us you know about two weeks to get to try to get some estimates on what we want so it's going to be a lot of work pretty quickly because we'd like to try to stay on stay on track for that so we'll send out agendas for these upcoming meetings but just wanted to highlight that today's meeting will be kind of this presentation the model Monday's meeting will be more discussion about thoughts and initial thoughts but we're very quickly going to have to turn into covering different license types and tiers which I think Thursday the 16th might be a good day for we also need to address some local fees which we can start talking about on the 16th and finish up on the 20th and then by the 23rd I think our goal would be to have some written recommendations pulled from your thoughts and opinions pulled from what we think is supported by the model and that we can discuss and hopefully get them approved and send up to the board so during this whole process we'll continue to try to send you some information I think we're planning on sending you kind of a survey of fees from other states so we can see where the model would compare to to other states and kind of some analysis of like here's how many licenses there are in other states and how that would compare to Vermont's population things along those lines but again next Monday if there's anything that you think will be helpful for us to try to share with you let us know we'll try to provide it because I think we're trying to work closely together here to get a very tight deadline so it's going to be a lot of a lot of moving parts in the next couple weeks so that's kind of the overall goal and timeline I know that wasn't particularly like to think and level that with days because a lot of it's going to flow depending on how hard especially to go next Monday and Thursday but I just wanted to give you a head up of how we envision that once we get through that October 1 report deadline there's probably less you know last time it's still be very quick timeline but less time consuming so we can probably start focusing on a little more taking a little bit more time with some of these questions but trying to get those recommendations as quickly as possible so that's all I have I will send out that model now but I think I'll turn it over to Andrew to start his presentation so sorry the body will see the presentation before you get it but you'll have that model in a matter of minutes so I'm Andrew do you want to do want to take it away thanks and appreciate it and I'm going to do a screen share as it's going to be easier for everyone to see what I'm doing and where I'm at with the model as you will see there's many tabs easy to get lost although there are isn't adjustable in depth that should help guide you through it so you just share screen and then I'm going to ask for confirmation that someone can actually see this on the team on team yes in this yes excellent thank you so this is a detailed supply and demand model so first and most importantly this being a model it incorporates data from the state data from you know other states and then many many different assumptions as it pertains to cultivation capacity you know yield output per page per consumer demand of all sorts of different assumptions and all of these assumptions work together to provide a projection for what we think the Vermont market will look like the model is hyperadjustable so any changes to these assumptions will change the output currently have in there some of what we look at as you know time and place assumptions for a variety of different factors but all of these things are subject to change particularly as it pertains to you know when we look at individual town markets and advocating some of those within there right now and I can show you guys that in a bit some of those assumptions we need to be expanded as well so this model includes about 20 or so different tabs with a primary market analysis model tab here is this kind of pink or addition color so each of these this is an adjustable index lets you know what's in each of these different sections and you can click on any one of these and be navigated directly to the page so if you ever get lost you can't find your way back on the upper left-hand corner is a little index but you can click that automatically brings you back to the index to find what you need to be so first let me get to you the primary market analysis model tab and I'll actually talk about what these within this from from the index so this is our primary market analysis model you know this brings us directly to this big big model which which contains the vast majority of our assumptions some things where attention is needed I think some of these things in yellow additional tweaks may occur as we go over this further but essentially what this model does is it still demand and supply so it is not just Vermont but any adult cannabis market your demand is going to be composed of both medical demand and adult use so when we're looking at the total model we look at the existing medical patients how much they are purchasing and how that affects things so we've got data here on medical cannabis patients how much they purchase the category breakdown and a lot of this comes from the data I came from the existing medical cannabis dispensaries and operators in the state of Vermont furthermore we've got you know projections things like that based on the existing patient data changes in 2018 and trends there if you're ever wondering on where most of the data comes from you can find a lot of that other data have a Vermont medical cannabis patient registration you can see all of the data that underlies it as well as where those projections come from and how they're derived let's go back for a second then we have the Vermont adult use market within the adult use market there's about four different components of demand the first thing Vermont resident cannabis consumers the second being your first degree of border consumers and those are going to be people that are kind of really directly along the border and then you have your second degree of border consumers those which are usually typically further than a half an hour but less than an hour and a half you know no more than an hour and a half from from the state further than that we have tourist consumers so these are individuals who are coming to Vermont for tourism but happen to be cannabis consumers and are likely to purchase cannabis when they are in the state on the tourist side of things there's an entire series of the tourism model that back into this as well as a number of complex data points and assumptions which give us give us that information about what kind of consuming tourists may look like we have you know changes in reserve prices the amount that we're estimating that tourists purchase per day and I have this all follows through this market is the way this analysis works is we look at all of these different consumers and then from there we look at what percentage are likely to purchase from the state of Vermont so all of this gets turned into Vermont cannabis equivalent because we have data from the National Survey on Drug Use and Health based on intra-past month cannabis use group with things so that's for instance how many consumers are FDA consumers or every other day consumers or only a handful of days among consumers and that when projected on to a price per ounce gives us an estimate of total monthly expenditures you then take these monthly expenditures put that through an analysis of what percentage of the market is being spent a different sort of category and we get total expenditures and then when we combine that with additional demand per month we get initial unit prices and total demand in volume as well so we have these numbers and we're looking at okay what percentage of demand from resident consumers or border consumers or for it are going to be captured by the regulated market and this will change over time as the market develops a lot of these assumptions come from data from Massachusetts as well as Colorado or again some others we're Washington where we actually have some initial research that looked at what proportion of the market is purchasing from regulated storefront when we're dealing with border consumers there's actually two different levels here because we first need to take off obviously you know consumers in Massachusetts aren't likely to travel to Vermont for the sole purpose of buying cannabis as they have cannabis access in their own backyard similar to those in Maine in which it's faster to drive the Portland and it would be dragged in Vermont by cannabis within that in the border consumers we have what percentage of border consumers we even consider purchasing and then from that we have market capture amongst those consumers who would purchase now there's another level of granularity this which gets us here because we're also dealing with seasonal changes over time right on the tourism side of things we have some data that looks at how tourism expenditures by bump have essentially changed over time based upon non-vermint restaurant transactions so we're looking at that we can incorporate it okay what percentage of non-vermint days are spent on each month and as you can see there's you know because Vermont has such a high tourism drop from its mountains of the east uses we have a higher amount of January February falling into the spring and then rising during the summer when hiking is great falling a little bit in September then peaking again in October when the fall colors are are brilliant in Vermont falling again into November and then rising as it's easy to pick up in December and then fall following for January again so this comes into place as we are looking at some of the tourism numbers but what's fascinating in that cannabis also seasonal dynamics that occur beyond just those normal tourism as we tend to see higher purchases during the summer and in all sorts of different states so I have a adjustment here that we can overlay or non-seasonal tourism and I'll show you for a second what this looks like so on the graph side we have a look here at composition of Vermont medical and civil use cannabis and how that changes over time and if you can see here there's kind of current normalized trends about how that occurs and when those peak and this data is taken predominantly from other states so you know there's a few different states that we're looking at established trends in Washington Oregon and Colorado for those states that have had many years of cannabis sales and we can look at over time with a number of theory uh complex uh equations and analyses to look at year over year what the seasonal trends look like obviously 2020 being the COVID pandemic has has changed things quite a bit from its normal trends so for these purposes we're looking at Colorado, Washington and Oregon some of the states have a long enough period of time that we actually have trend analysis in Nevada because tourism overtakes so much of normal uh normal activities it's not really as analogous to utilize for Vermont so here we're looking at the seasonal trends averages uh above or below averages from these three states over these three years and we utilize this to be able to apply a seasonal trend to overlay onto our analysis there's a toggle button so we can turn this off and we did that you could see for instance here uh while tourism maintains uh its data uh here on the adult consumers were no longer overlaying the potential so i'm going to turn it back on for a second so that we can really appreciate the differences that are for at the uh the month by month level when it comes to those seasonal overlays we then have all of these consumers and these consumers demand and then uh those that are captured by the regulated market to come from these assumptions then flow into our total adult use demand and total expenditures based on the our assumptions here so that's just on this first side and then these factors involve medical edibility uh and then we get into cultivation so on the cultivation side um this market includes both an indoor and outdoor slash greenhouse uh cultivation schedule option uh because this analysis being looked at from the state level while they have control over a number of different factors they don't have control over everything and so when we are looking into this you know we say okay how many cultivators are we starting with now this number could be higher or lower but it could be unlimited and and i think that's likely what's going to be the fact in vermont but for the sake of this model i think it's important it's important for us to put in okay what number if we don't have a limit on licensing how many cultivators we actually got to think uh are going to come in register build out um and operate in the state of vermont so you put this number in here and this all pulls into this sort of model which is quite complex but utilizes a number of different factors so the most important thing here is trying to identify what the square feet of flowering canopy space is right we can increase the number of cultivators and as long as we increase we keep less the number of square feet of flowering canopy won't actually change the total output uh in the state of vermont it will change some of the frequency of harvest but essentially our canopy for cultivators goes down as the number of cultivators goes up uh given uh changes in square feet of flowering canopy space so if for instance we have 400,000 square feet of canopy we have about 2000 square feet of flowering canopy per cultivator now again that's flowering uh canopy space so that is how much uh plants in flower underlight do you have uh in your facility um this is this is for indoor again we also have an outdoor model as well which again uses flowering canopy it has to be a little bit different because it's you know the uh the growth the they might be further apart um and so there's a number of averages that are pulled into there so because uh the state of vermont has control over licensing you know let's say for instance they start licensing in january of 2022 and again all of this is adjustable let's say they they license for 18 months um uh on an average about 11 months uh over that period of time and maybe after that period of time they realized you know we had enough people coming in maybe you know our licenses just strictly we don't want to deal with the over supply issues or things like that close licensing um what this model allows us to project is okay if someone gets their license like they in uh june of 2022 they're not the earliest they're not the latest the bucks all the footwork they get it in june 2022 let's say it takes a month from the start to finalize things through the end of finalize things what the state does not necessarily know is how long is it going to take them to build out their facility and to actually cultivate cannabis and start putting cannabis plants in the ground so this model uh for both indoor and outdoor includes a degree of randomization with a series of complex random dumper generators which allow us to continually look at how long it's going to take any different people to build out and utilize it to averages and Massachusetts and others and discussions with consultants we have a normal range of four to 12 months with a look with a outlier range of two to four months or 12 to 18 months with an average of eight months uh from the start to finalize things through the date in which plants are in the ground and then utilizing the data from Massachusetts we have what percentage fall in different outliers about two thirds in the normal range and one third at the low outlier sorry and one sixth at the low outlier and one sixth at the high outlier range so with this allows us to do that is if we look at over time when this different licensing will occur and as we can see here is a color-coded thing that when you start putting clones in the ground and when you're when you're harvesting this model because each of these are going to be small these look at these as each individual growth facility assuming that each growth facility turns over ever 128 days i.e. what's done with this harvest it puts clones in the ground in that same room we have a situation in which a cultivation facility has a bedroom and a harvest room and it's rotating on a more frequent basis which is absolutely fine but for simplicity purposes this model looks at each of these small growers that's kind of utilizing one room for for both vegetation and a harvest and with in each of this because there's a random number of generator these numbers change every time you press F9 every time you redo things so the numbers when you look at it may be different every time you open up the document as it pertains to the supply and that really takes into the case that there's a certain degree that we don't under we don't know exactly when that supply is going to come online how many of these growers are going to build quickly or slowly that all of this is factored in so this exists both for our cultivation side then on each of these facilities we have the yield this comes from some of the existing medical operators how much is flour how much is trim both in wet weight if you're doing live resin as well as dry flour and dry trim what does that get allocated for testing what fail testing was possibly able to be remediated in terms to concentrate and what gets pulled what if the harvest gets pulled for extraction this is similar sort of thing occurs for the greenhouse cultivation so for the greenhouse rather than a certain number of months we have a start date on the low and high end because of obviously if you're growing outdoors it's a limited harvest season to utilize in the state of Vermont and so here we have a frequency of cultivation every year every three inches 55 days with hard of a thing then eating the plants in the ground to eat to occur during that period of time also the number of days here differs a little bit given that this is going to be an outdoor model as well as some of the yield which flows in this is similar to what we see for the indoor that we have combined and then we get into extraction we look at you know how much extraction capacity if you need in order to meet all of the the kind of demand in the state then suppose we're going to give over some of this for brevity purposes then looking at what the extraction yield efficiency is what percentage let's say you put a pound of you know 453.5 19 grams you know pound into your extraction machine how many grams you get out so this is their yield efficiency of the oil and then as well we have the amount of oil that you think go for testing and the percentage of batches that sell that thing then from the production of all of this oil we get into the question of when have this product produced we have lost we transferred this oil into the products themselves let's say you know you're filling your big pens or you're you're producing edible products a flower loss from filling pre-rolls loss from packaging the product some package some product break some packaging is not a far the labeling is wrong that will have lost as well as well as again additional testing on supply chain for edible products and helpful products in order to determine how many products we can produce we look at the amount of oil that was produced and and put in estimates for TAC extraction potency so this you know let's say you put in a pound of cannabis you get a certain amount of grams of oil and then the question is what percentage GAC is that oil because what we need to target is average size for these different sorts of products and the amount of PUC that each of these which then allows us to know how much oil needs to go into them accounting for loss that occurs when creating the product loss first packaging of that from here we're looking at okay in order to get this this allocation correct how do we want to allocate filter and flower between pre-rolls and kind of a flower or bustel as well as our oil which we concentrate on edible products and optical products all of this got to the place because Vermont is likely given its potency restrictions for manufactured cannabis products likely going to balance some of that with CBD in order to meet the regulatory requirements we also have in here CBD required for products and how much CBD isolate might be required given the quantity of products we're producing and the amount of CBD that would be required in that utilizing the data and benchmark that others to try to understand how much CBD biomass is required for one kilogram of CBD isolate this looks at about 50 grams of of cannabis of hemp's biomass that it produces about one kilogram of CBD oil and then about two between two and two and a half kilograms of CBD oil i.e. this is great one kilogram of BGI so this gives us all of our estimates here also the model is we've got a number of different tests and you can look at things from an annual perspective as well then we get into some specific medical patient retail sales in specific places this utilizes the model here that allows you to select any individual town and as well as what other towns that is taken in on you know this portion of the model once i've worked with the cannabis control board to help us figure out any specific localities that we want to identify we'll end up running some little bit more complex geographic information to the model to identify the exact towns that are let's say within a five ten or fifty mile radius or whatever we want to determine as well as proportions of those towns which are in that radius and this will all get adjusted as well so these numbers particularly you know should not be looked at as final given that you know additional insights will be delivered as we identify which of these localities we need to put some more thought on for local fees and you know local tax burden this includes this both for medical as well as for adult use then we get into supply and demand so this is you know some of the real juices the model you go back to the index for a second i can just go directly here to supply and demand you know how much what is our supply of cannabis flowers and as i mentioned you know this changes over time every time we hit f9 here we can see that these numbers change because the frequency of harvest and when people are cropping out is going to differ uh based upon kind of the random nature of the amount of time it takes of us from their final license until they are ready to put plants in the ground and then once those plants are ready when they're ready for harvesting uh they were looking at demand as well early on in the market because uh you know the first cultivators that are going to get online are not going to be able to serve the full medical and adult use demand we will have under supply and then over time as more of those facilities build out as our first cultivators are getting their second and third harvest or later on our second and third you know are later on cultivators are getting their first harvest this increases as well and over time you could see of what percentage of the Vermont medical and adult use market being capable of served with the inventory that's reduced given those different uh supply numbers and there's over time you can see um you know we start to get into the ranges of over supply now with all of this it's important to sort of percent uh you know what we're projecting if you want to target it's going to be left up to this you know board is regulated to determine but this probably you know giving us some thoughts uh we can for instance change this but let's say if we're going to do uh 300,000 uh square feet and let's you know see what happens if we change all of that now obviously this changes the whole market now in this case canopy per square foot of cultivator is 1,500 square feet of flowering canopy and if we go back in here we can see that um you know we're much closer to these to just about reading demand in some places slightly over in some places slightly less and in this instance you know for these certain months we may not actually have let's say enough topicals or enough concentrate for edible products to beat the market and as such um you know sales would be less than what total demand would uh would allow for so I'm likely want to be somewhere in between I'll set this for instance to uh read that 350,000 square feet just for illustrations purposes and again we can see how this model then adjusts once again um then we look at okay how much it sold and this is going to be based upon uh just what medical is able to sell and in this model we're assuming that all supply goes to medical first and staffs on medical demand and any uh lack of uh supply that can't be met falls essentially on the adult use side um and then we've got both competitive combined medical and adult use product sales and then taxes that flow from that as well and then we break it down on a sort of front perspective as well on the graph side of things we can see here we've got uh Vermont medical and both these consumers as I showed you before um consumers in the top 10 market uh based upon some of these adjustable assumptions uh projected Vermont medical sales for product type rejected for Vermont sorry Vermont adult use sales by product that and as you can see here as we press f9 particularly you know if we are close to the bound of not having enough supply um here early on when we definitely don't have enough supply this is going to be this randomly changes because the amount of cultivation that we have online to meet this demand is going to be different right and then in some of the latter months you can see little periods of time in which this changes because there might not be enough supply to actually meet demand here again we can see the product production from new adult use cultivators so how much gas and flour free roll composites and others uh grams this this is grams of flour and then units of other manufacturing products here and then we can see it's a fine demand graph and you can you know by hitting f9 repeatedly and the reason I didn't kind of uh start a confidence interval on this is because all of this model is relying on existing assumptions so this would be you know a confidence interval given the assumptions we have which I don't want people to uh essentially false confidence do because our assumptions um may change over time so here we can see you know we're likely getting uh somewhere around supply and demand parity uh in the summer of the 2023 we've been depending on the month um kind of a sliver of supply but above what uh demand is so and this of course we can adjust over time uh maybe you know we restrict cultivators uh cannabis you know we get a little bit more stringent uh the regulatory gets a little more stringent on uh people that are more canopy than they're actually cultivated or selling um and you know use of mechanisms to to bring this closer to parity but again we don't want to have under supply issues within individual substitutes of the listed market this then shows the balance between indoor and outdoors we see uh there are spikes uh seasonally in the fall as the outdoor harvest comes online if for instance outdoor cultivation was significantly larger let's say we were dealing with you know 100,000 square feet which is the justice which would basically be that each outdoor cultivator now is a 2,000 rather than 800 square feet of flowering cannabis you can see here that the spikes would become a lot sharper and this could uh throw the balance um of supply and demand easily uh out of alignment and I think that there's good information that we can learn from Oregon in this instance and balancing between indoor and outdoor cultivation the risk seasonally of having a large portion of production occur outdoors and what that does in a market that has a history of really good cannabis cultivation but also a relatively small amount of demand to absorb that ongoing ongoing production that we spike in uh in the fall um so yeah this is a abbreviated version of looking at the cannabis model um there's a lot of other goodies in here feel free to look through some of these other things uh all most of the data uh comes from the state itself i'm looking at population projections at the localized level and then utilizing national survey on drug use and health data uh i can pull that from see where that is uh from the national survey on drug use and health which is a federal government survey data that looks at cannabis use rates at a regional level uh across the country so this lets us know how many border consumers there are how many consumers there are at the different regional levels and then county levels in the state of Vermont great does anyone uh you know i'm not sure how i hope this question sort of ended here um but uh model includes quite a number of different assumptions all of these are pretty hyper adjustable and we can utilize to identify how many square feet of cannabis we may need how much extraction capacity we may need and as such the licenses uh that that are going to to start what their initial cultivation allocation may be thanks Andrew yeah i see that uh you might have a question i just um just to try to translate this into kind of what our our uh goal is here um obviously this is a quite powerful tool that we put together where you can kind of play around with it and see what total capacity is needed how different you know outdoor cultivation will will uh impact it um what i think uh our goal as a subcommittee here is to take this information uh at least for the first part of the subcommittee is to take this information and try to make a best uh estimate on uh what licenses are needed how to structure those licenses uh in order so that we can try to calculate what license fees are needed we have a couple of uh directives from the legislature in the in the um in the statute the first being um that they would like it possible for the fees to cover the full operations of the board um that's going to be uh a little bit difficult but we would like to estimate what what those fees would need to be in order to cover those costs um the second they've also asked for um to keep like to try to incorporate small cultivators and social equity licenses and to keep those fees low which which adds to some degree of difficulty so we'll talk all about this a little bit more on monday but just wanted to start by presenting the model so that you could play around with it uh today and over the weekend we can have a more informed discussion on monday about where where i'd really like to see this go um and how you'd like to shut this shape this market and um we can talk about how you know it's worked in other states or what we're thinking um and how we did it with what the legislature is asking but um so hope that makes sense uh so vaughn do you want to ask your uh your question uh thanks Dan and you're actually already getting it at the at least right now those are the one question we want to ask andrew um andrew thank you that was a great walkthrough um every model has assumptions and some assumptions matter more than others um in any given model and clearly so much in the model we went through is driven by the assumptions around square p of canopy growth and so really the the larger question i have is how do we uh almost model out that assumption to get to a reality check of what do we have to expect in terms of demand not demand of consumers purchasing but demand of potential agencies right we've had listening sessions with tons of people who are potential growers and and how do we start to level set and and reality check um you know it's great for us to say hey we want to target 400,000 graffiti video canopy growth but the real question is uh what are we actually going to see in the market for people who want to grow and and so you know how do we take that to a different level precision and get a sense of whether uh we can use that to help level set the rest of us yeah absolutely so this is going to be a difficult um thing to do and i think that there's about there's a few different ways we can look at it the first is to look at other states and try to identify um how much demand for uh to be essentially a candidate cultivation entrepreneur uh there was in these different states um and which states to use as those assumptions obviously the market in a place like Massachusetts the potential in a place like Massachusetts and the regulations in a place like Massachusetts are going to be very different than in a place like Vermont and as such the amount of uh entrepreneurial demand or the demand to be an entrepreneur for cultivation is going to be different in Massachusetts than it would be in Vermont in Vermont uh you know i think you're going to be looking at you know a combination of a small you know from an entrepreneurial perspective a small market a market that is heavily emphasizing local cultivators and smaller businesses um and a market that uh is many seen as remote and but also a market that doesn't limit licenses because limiting licenses is i think one of those things that actually spur the different additional entrepreneurial demand a demand to be an entrepreneur because those licenses then hold a significant amount of intrinsic value that can then be sold afterwards so one of the states that this might be uh worthwhile to look at is actually very much across the country in Alaska. Alaska is a relatively small market without a limit on the number of cultivations like this that heavily emphasizes and prioritizes local residents so we can look at a state like that with some population adjustments also a relatively small state to try to see okay how much demand was there to be a cultivation entrepreneur uh similar dynamic most of the cultivations is going to be indoor obviously even colder uh in Alaska but uh surprisingly uh the weather in anchorage in the southern part of that is just similarly such a point uh that it is in Vermont um and so you again have seasonal outdoor that has a pretty short cultivation season there so that's one way to look at how much entrepreneurial demand do things that there's going to be. Another route would be to structure the application process in such a way that we can try to identify the amount or quantify the amount of interest that would basically be we put out uh intent to apply so a number of different states particularly those that have done limited licenses have done that so they've got a two-stage application process in which you submit your intent to apply just may just require you putting forward your team maybe putting forward a local area or a property that you intend to cultivate in and maybe a small amount of initial fees if then we would allow these regulatory agencies try to identify with that initial interest and then based upon projections for how much supply needed to meet and exceed demand to proportion those additional cultivators as they're starting cultivation how to put uh or or flatten the square feet so i hope that helps to answer the question. Thanks Andrew and um you can elaborate that I just wanted to make sure we had some time for anyone in the room there Chairman Pepper who might have a question for public comment. Yeah I think I just went around and talked to everyone I think we have one public comment which could probably give us just a few minutes for that. Do you want to go ahead? Sure. Let's sit here. Oh hello everybody uh Jeffrey Pizzatullo from the Vermont Coral Royce Association. We are a member also of the Vermont cannabis equity coalition. Thank you for your time it's been very informative I'll be brief. I would like for you guys to consider if we're making assumptions about canopy size to build around this model and perform analyses we would like as a coalition for you guys to consider production caps at market rollout keep in mind we already have an in-state actor that is flaunting a nearly 100 thousand square foot indoor facility and that would have an impact on a lot of these projections and analyses that we're making. So I'll be brief urging production caps for the first couple years keeping in mind that things can change maybe we make adjustments after that but it's important to transition our legacy growers as much as possible through unlimited and rolling licenses and perhaps not regulating market access but market production. Thank you. Thank you very much. Thank you. I do want to add that this model on the supply side does not include the existing quantity of supply produced by the medical cannabis cultivator. As I was able to obtain some of that data but not enough in a way that would allow me to anonymize it so that it's not potentially identifiable to the system. So that is one of those things that you know we're able to get that data from the state itself with all of the operators that exist would be a significant benefit to add to understanding what our total both medical and adult use output supply is in the state of Vermont. Thank you Andrew. Chairman Pepper any other public comments? I don't think I don't think we have any other takers for public comments. Okay thank you Dan did you have some wrap-up as we're just about out of time but need to start. Yeah I can wrap up for yeah I can wrap up in a couple minutes. I started to wrap up just a moment ago but we wanted to kind of frame it this way because we thought this model was important to get to all the subcommittee members so they could look at it to see the functions that we're making or which assumptions you think should be adjusted before we started opening it up to like a full conversation in a collaborative process. So that's probably what we're going to that's what we intend to start on on Monday so a little bit of a gentle set doubt but there'll be time to ask any follow-up questions of Andrew about the model or about anything else you talked about and then start a discussion of how subcommittee members kind of in this market going forward. Again for at least for these first couple weeks we are focused and somewhat constrained by the need to get the statutory statutory required report on pieces back to the legislature based on kind of the parameters that are set in that legislation. So that's lower fees for social equity like there's a drive to have as many small cultivators included as possible and a goal of trying to have these cover cover operations. So you know one of the alternatives here might be to present multiple recommendations where one would be high fees that cover operational costs but you know because of all the problems aren't actually an ideal policy solution and then we can try to come up with you know the recommendations that seem to be more in line with what Vermont wants and how to have a robust market that includes small growers and social equity growers. So that's the discussion that will kick off on Monday. I hope you all had enough had a got enough from that model and understood what was going on because I know Andrew did a great job presenting it. There's a lot of information in there so we tried to present it as quickly as possible but hopefully you got the got the gist. So that's all. I see there is one more question from Tim Westle but then then I think we're ready to I'm ready to wrap up. Tim. Hi yes thank you I'm just here to remind you that I think under fees you are supposed to be discussing local fees as well as part of your charge from the legislature. Right that was that will probably be I think the first Monday meeting will kind of be general state level fees you know but at some point because we don't have a long runway here we'll probably start talking about local fees and trying to project local fees which add so many other levels of so many other variables and other levels of difficulty probably starting will be from today. If it all goes to plan maybe it's not a it will be the following Monday but we will we will discuss it. In fact we will naturally be discussing that in two minutes the next subcommittee meeting under compliance but I wanted to thank Andrew, Dan and every participant to the gene. Make a motion to adjourn by about second and a third we can adjourn and we will another subcommittee meeting and I think it's two o'clock on Monday and Penelope sends out the invite so I'll move to adjourn this meeting for market structure licensing fees and taxes. We have a second here Stephanie. Great thank you Stephanie. You're welcome. Thanks for your money everyone. Thank you.