 Well, my name is James Pepper. I'm the chair of the Remind Cannabis Control Board. Today is April 18th, 2022. It's 1101 and I call this meeting to order. So just a few brief remarks. Reminder from last week, you know, talking to fire safety is a requirement for all licensees. This is not meant to be overly burdensome. And in fact, fire safety doesn't have jurisdiction over every license type. Fire safety has jurisdiction over public buildings. And there is a definition of a public building and statute. And a reminder that the CCB cannot waive fire safety's jurisdiction. And so we're going to request some indication that you have spoken to fire safety regardless of what license type you're seeing. You know, the fire safety is prepared for these conversations. You know, they can do a very quick check remotely to see if your building is under their jurisdiction. And so they've divided up the state between north and south and have assigned two people to do these checks. And if they do have jurisdiction to kind of schedule follow up. Landon Wheeler handles the southern part of the state. His email address is landon.wheeler at vermont.gov. His phone number is 802-216-0501. And Moffitt handles the northern parts of the state. His email is Benjamin.moffitt at vermont.gov. And his phone number is 802-479-7581. And again, they can do a very quick check. They'll send you a form letter if you're not subject to their jurisdiction. And even if you are subject to their jurisdiction, their process is not so onerous that you can't get through it relatively quickly. For tax compliance, again, the board is going to require a certificate of good standing from the tax department. You know, this is spelled out in our rules. But in order to get one of these, you can do this remotely as well. You don't have to go to the tax department. But you can email tax.compliancesupport at vermont.gov. And, you know, they just gave us a few tips. The subject line for that email should indicate it's a good standing request for a cannabis license. And within the email, you should include the name of your business and either your social security number or federal employee identification number. Let's see. The tax department is working on a comprehensive guidance document specific to cannabis businesses. That should be up on their website. They have some good information on their website currently. But that kind of specific to cannabis businesses guidance document should be up on their website this week. I know the draft is done. They're just polishing it off right now. That will have a very kind of detailed step-by-step instructions on how to not just get this good standing check, which is very straightforward, but also how to register with them for kind of sales and use tax compliance and excise tax compliance. Update on prequalification. Just before I do that a reminder prequalification is not a prerequisite for an operating license. It's a voluntary process. It's primarily aimed at clearing people that might have a criminal conviction in their past that might prevent them from ultimately getting a license. There's some secondary benefits for folks that are seeking a bank account or insurance insurance accounts or trying to talk to certain government agencies. But it might not be right for you. It does include a $500 non-refundable credit towards your application. It's a fee that you have to pay, but it will get credited towards your future license. So everyone should decide whether prequalification is right for them. But the numbers from this week, updated numbers as of this morning, there have been 643 total applications submitted. Of those though, I should note that 371 are incomplete in some form or another. Either the required documents have not been uploaded or the fee has not been paid. So we are going to continue to review those today and approve some today. But I just want to give you an update on that. And again, our first licensing window is open. It was open on April 1st. As of this morning, we have 56 licenses that have been fully submitted. And again, we have not reviewed those for completeness, but they have been fully submitted. And if you have any questions about prequalification or your license, feel free to give us a call. We have a lot of good information on our website, which we would hope that you take a look at first if you have questions. But you can email us at ccb.info at vermont.gov or give us a call at 802-828-1010 and hit option zero for the adult use program. Other than that, I just need to approve our minutes from April 11th last Monday. Is there a motion? So moved. Second? Great. All in favor? Bye. Okay. Moving on to the agenda. The first item is we're going to discuss guidance for escrow or bond amounts for the cessation of operations. I prepared just a few very kind of brief slides for that. So just as a reminder, in rule 1.4.4, we say that all applicants must submit a contingency and continuity plan that addresses the dispersal or disposal of inventory in the event of an abrupt closure. And then in 1.4.5, we require each applicant to submit documentation of a bond or escrow for cessation of operations of a cannabis establishment cost to be determined by a board in guidance. And a reminder that we did waive 1.4.5b, this documentation of bond or escrow, for tier one cultivators. But not the continuity plan. And essentially, I think why we have this is this is a controlled substance. It is federally illegal. And if a business has to abruptly shut, or if their license is revoked for some reason, we need to have some assurance that the product, the controlled substance, is not going to end up on the illicit market. A lot of states, I'd say the vast majority of them require that anyone who's being licensed have a certain amount of assets. I think this is our kind of way around that. We know that saying that every licensee needs to have a minimum of $2 million in assets would be just an ultimate barrier for too many people. But that being said, if we do need to revoke a license or if a business fails, we need to have some assurance that the bill doesn't get passed on to the state or the cannabis board for ensuring proper disposal or destruction of this controlled substance. So Massachusetts has a very similar scheme laid out. This is from their rules. And again, it's just the requirement to have a bond or an escrow account with a certain amount of money in it that can be used for those four purposes that are laid out in Sub-A. And the amount that they require, they do also, by the way, have a minimum assets requirement for owning a license. I think it's, you need to show that you have assets of a minimum of half a million dollars. But they also have this fee or this escrow amount. And they say it's either the amount of your license or it's $5,000. And then again, it can be used for the destruction of cannabis goods. It can be used for the cost of compensation for a corner pointee, cessation of operations, or whatever other use the commission may authorize or deem necessary. Is that $5,000, no matter size type of license? They strongly suggest that it's the, and I have the wording in that guidance, I think, but they strongly suggest the amount of your license, but they're willing to consider $5,000 in the alternative. So this is from their guidance on this section. You can see that it's really set aside for either winding down or dismantling marijuana establishment or dispensary. It can be used for satisfying outstanding sales tax obligations, securing a licensee facility in the event that they have to abruptly shut down in the cost for destroying marijuana or marijuana products in the inventory. And then so it applies. The kind of fee amount is what they suggest, the licensing fee amount, even if your license fee has been waived, just look at the underlying fee amount for your license or a minimum of $5,000. So that's what Massachusetts does. I'm not saying that we should follow them. Here are some things that I just, some questions that I put forward to you guys, Julie and Kyle. As we know, as we saw last week, that we are going to require if you cannot get an insurance policy that you set aside a certain amount of money in escrow to cover claims against your company. One of the questions that comes to mind is, if you have one of these insurance escrow accounts, do you need a separate insurance escrow account or a separate escrow account for cessation of operations? Or can we combine the two? Second question, how much do we want to see for cessation of operations? Do we want it pegged to someone's license fee? Do we want some alternative amount like Massachusetts does that just applies universally to all licenses? Are we okay with just saying those amounts that you set aside for your insurance escrow could also be used for this? So we don't need an additional amount if you're going for an insurance escrow or some other amount. Another one is, do we need this for testing facilities, which are largely not going to probably have a lot of a lot of cannabis on site. Maybe they are, but it seems to me that they're not cultivating. They have samples, and the samples are going to be secured. But just a question about whether they should apply to testing facilities. And then tier one manufacturers, and again, those are the home-based food processors, the smallest level of manufacturers. And then, should our waiver provision, our general waiver authority come into play in determining how much someone might need to set aside for a wind-down cost? So those are just a few questions that I had. I talked internally with David and Bran a little bit on this. And it seems to me that if someone is going to get an escrow account for insurance that they should not also have to get a separate escrow account for wind-down costs, that we can expand the scope of that escrow account, the authority to spend that money and just include wind-down costs. That being said, if someone gets an insurance policy and they should then have to have an escrow account for wind-down costs in addition. So we should also, even if we decide that that amount would be sufficient, the amounts that we designated for the insurance alternative escrow, we still need to probably think about what we want for wind-down costs in the event that someone gets an insurance policy and needs to set up one of these accounts separately. Okay. Can I jump in? Yeah, please. Are you going to suggest some amounts, Pepper? I did have some suggested amounts in the next slide. Okay, I'll wait. Um, but do we want to, I guess, do we want to talk about whether testing facilities or these kind of tier one home base provider or home base manufacturers need, I mean, should we be treating tier one manufacturers the same way we treat tier one cultivators, essentially, just recognizing that the scope of what they're doing is minimal. The potential impact is much less and that a wind-down cost might, it might not make sense to set a specific amount for tier one manufacturers. Anyone have any thoughts on that? I think it depends on what we set aside for amounts. Like, if we were to say it's like a month's operational costs or something like that, then it probably could be the same across the board because it would vary based on size of business. But if we pick a blanket amount, we may want to adjust for tier one. Okay. Yeah, and maybe similar questions, maybe the next slide we'll show, but are you thinking blanket amount? Okay. Yeah, so essentially, I took out testing labs, but we're going to obviously add them back in. I think that makes sense. Yeah, I'm fine with that. So these are the categories that we used for our bond escrow amounts for insurance alternatives. So it's retailers, wholesalers, integrators, here are three manufacturers, which is the ones that can use all the base extraction. The tier four, five and six cultivators of any type. So that would be the general $5,000 set aside for cessation of operations. And then for tier one and two manufacturers, which could just be tier two manufacturers. And then the tier two and three cultivators, 2,500. So just half. And I don't know if that's the right amount or not. I just propose something. And that's it. I mean, essentially, I'm open to any suggestions on this. I can show you if you'd like the amounts that you have to set aside for insurance. You'd like to see that as well. We said it was commercially reasonable insurance. And then was it $10,000 pepper for set aside? I'll pull it up. I think that's what it was. When I did this for insurance programs, for self-funded programs, we had to set aside a certain amount based on like three months worth of claims, for example. So if the business ceased operations, there would still be enough money to pay out a certain amount of claims. So when I was thinking about this this morning, I was thinking about it very similarly, but in terms of like operational costs, I'm sensitive to requiring businesses to set aside too much in an escrow in early years because they're young businesses and they're going to want to reinvest as much money as possible in their business. So I just want to, those are the things I'm thinking about. Yeah. And just so I remember, you said in Massachusetts it was equal to your license fee and an alternative to that could be $5,000 if you show that you can't meet that. And where you're proposing we don't tie it to licensing fees, we just use some blanket numbers depending on your tiering size. We could. My numbers are generally going to be... It seems like it's lower than the... The most part is lower. Yeah. I mean, this is what we did for insurance and essentially what we would do here, if you were going to use an escrow account as an alternative to insurance, we would expand the scope of that escrow account to include kind of costs associated with cessation of operations. So you wouldn't have to get two escrow accounts. I agree with that. Yeah. Okay. So then the real question is someone gets an insurance policy. They don't have one of these insurance escrow accounts. How much do we feel is necessary for a wind down cost? And again, if you remember what we did for the kind of destruction of a crop, we made it pretty broad and relatively inexpensive. A lot of options. A lot of options. So maybe for cultivators, it doesn't need to be overly expensive. But depending on... I mean, if you're a retailer, for instance, and you have to abruptly shut down, and you have to... Those are my concerns for a little bit. Yeah. Well, I guess the question is, are these numbers too large? Are they not large enough? Are they... Is this the right breakdown in license types? I think it's the right break... Oh, sorry, Kyle. Oh, go ahead. I think it's the right breakdown in license types. I think a sum of no less than 5,000 is probably all right. I'm thinking too, like if someone was really going to cease operations for manufacturers, they would have assets, right? So I'm not sure that 2,500 is probably okay if they're also going to sell their assets. So then would you move tier three down? Tier three manufacturers? No, because those are designed to be home-based businesses. I don't... Well, yes, I think I would. Yeah. Well, so the tier three, just remember, the legislature switched them. So tier one is home-based. Okay. Tier two is kind of just, you know, non-solving basic structure. I'm getting used to that switch. Yeah, sorry. I mean, some of the manufacturers, depending on how they own certain pieces of equipment, either, they're going to cost way more than what's being held in here. Right. Well, I used to have a slide. I took it off about what we could consider for a waiver and looking at someone's assets and their cessation and continuity plan at the time of licensure could certainly play into how much someone needs to actually set aside. I think I'm comfortable with this. I think one thing based off one of your slides on questions is, do we want tier one to be subject to this, or do we think we can waive the requirement for tier one manufacturers? Right. I don't know, Julie, if you have any thoughts on that. Treating tier ones here, like we would a small cultivator. Yes, I agree with that. I would like to be able to waive it for tier one, especially if it's a pretty low asset. So, this would be... Oh, lost it for a second. That sunshine must be pulled or in. I think that makes sense. Okay. All right. Well, then why don't we leave it like this? And if we find that this is unachievable for certain people, we can evaluate them on a case-by-case basis. And we did also decide that if somebody, instead of insurance, is taking out an account and holding that in escrow, that 10 grand, they could just put this money into that account instead of having to do another account, pay more fees for that account. Well, I actually think if you're establishing an escrow account for an alternative to an insurance policy, that those amounts that are in 2.2.2, we just let that would be sufficient for this as well. Okay. Okay. Not in addition. Okay. Just wanted to make sure I understood. Yeah. Okay. So, we will update our website with this information then as guidance on cessation costs. Okay. So, next on the agenda is to vote to close the window for pre-qualification applications on May 31st. Again, we need to provide the industry the public 30 days notice before we open or close any window, whether that's pre-qualification or licensure, general licensure. And really, I think the motivation behind this is it looks like we have kind of healthy numbers in all aspects of pre-qualification. If we close on May 31st, that lines us up with the opening of all of our license types with the exception, I think, of retailers. And, you know, we as a board really need to start focusing on approving operating licenses. And so I think everyone has kind of a good grasp of the pre-qualification. And so I think we, sorry, do need to, we probably make sense for us to close the pre-qualification licensing window at this point, or not at this point, but vote to close it on May 31st. So, I'll move that the board closes our pre-qualification window on May 31st, 2022. Okay. I just, sorry. I'm moving too fast. No, that's all good. Any further discussion at that point? I think that makes sense. There's a lot of people in the pre-qual window. Some are withdrawing in anticipation of full licensure. And yeah, I think the direction we need to move is our staff needs to be starting to focus more on the operating licenses full time. All right. Julie, anything else there? No. Thank you, though. Okay. Okay. Then all in favor? Aye. Aye. Okay. Okay, great. So, we'll again update our website with that decision as well. Next, just a review of staff recommendations on pre-qualification applications. Bren, are you with us for this? Yep, I am. Okay. I'll turn things over to you then. Okay. Sounds good. So, rather than share my screen from here, I'm wondering if David might be willing to plug in and share our. Okay. Thank you. So, before I start going through the pre-qualification application registry, I just want to give everyone a reminder that our staff is working to develop all of these systems for reviewing the pre-qualification applications. And also, they're still working on consolidating the data that we are all going to need to track to identify where we are in the process. So, this registry is really kind of a work in progress and we will be able to report on more information, more data on where the applications are in the coming weeks. We have, we still have really limited staff. Our positions for additional licensing staff are going to be posted in the next couple of days. So, we are, we're underway with bringing on our full team on board and we're going to have more capacity to collect data and report data soon. So, just a disclaimer here that this is, this is really a work in progress and it will, it will contain more information as, as time goes on. So, that, having said that, we have a number of pre-qualification applications to approve today. And again, just as with every week, these are applications that staff has reviewed and determined to be sufficient to meet the requirements, contain and rules 1.4.1 and 1.4.2. And all of these applicants either have no, have a clear record check or have no presumptively disqualifying convictions on their record. So, with that, I will go through the submissions that are recommended for the board to approve. So, the first is submission number 30 and that is for mixed use tier 1. Next is submission number 336. Again, a mixed use tier 1. Submission number 173. Mixed use tier 1. Submission number 369. For mixed use tier 1. Submission number 251. For mixed use tier 1. Submission number 170. For mixed use tier 1. Submission number 256. Tier 1 mixed use. Submission number 565. Tier 1 mixed use. Submission number 158 for tier one mixed use, submission number 114 for outdoor tier one, submission 81 for outdoor tier one, submission 227 for outdoor tier one, and that is all we have for today. So we've got nine mixed use cultivators, six outdoor cultivators, and two indoor for approval today. All right. So is there a motion to approve these? Yeah, I move that the board accept each of the recommendations for free qualification approval as presented to us by staff in this meeting. All right, is there a second? Second. All in favor? Hi. Hi. Hi. Great. All right. Yeah, I think that's it. So I close my agenda by accident, but I think all we have left is public comment. I think you're right. Just pull it up quickly. Don't check. Here's something. I'll keep it straight if you are. Okay. I think that's right. Okay. So we'll open up to public comment. We'll do it the way that we traditionally have, which is folks that have joined via the link, raise your virtual hand, then we'll move to people that joined by the phone. And again, if you ask us questions, we can't necessarily respond directly during public comment period. We do collect questions and we try and update our FAQ document to reflect those questions that we receive. And you can always reach out to the board directly if you have a question. But for now, we'll open and it looks like start with Dave Silverin. Good morning, everyone. Two quick things. One is you mentioned the waivers on my list of waive provisions. I do see 1.4.4A as being waived for tier one cultivators and I just wanted to see whether that's worth clarifying. And I wanted to just briefly raise a potential issue that I saw in the Senate Judiciary Amendment. I know you've been struggling with the FBI background check stuff. And I imagine that the language there is related to that and trying to get it to be more conforming to the FBI requirements. But I think what I see there is now every shareholder in an LLC is going to be deemed a principal even if they're a very small, silent, non-controlling shareholder. And that would require them to get fingerprinted because every shareholder in an LLC is called a member and that's what the language now says in that Senate proposal. If we're going to be going down a path of using a third-party provider and you're going to require every LLC shareholder to be fingerprinted, I worry that that might get pretty expensive and kind of unnecessary since the statute doesn't otherwise really require you to do that full background check on every shareholder really only on shareholders who control and people who have a significant managerial role in the company. So just kind of laying that out for you is an area of potential concern. Thank you very much. Thanks, Dave. And yeah, you're right about 1.4.4A. That is waived for tier one cultivators. Anyone else that would like to make a public comment that joined via the link, the video link, just raise your virtual hands. And if you join via phone and like to make a public comment, you can hit star six to unmute yourself. We have Jason Gulisano. Hey, good afternoon. Thanks for today's meeting. It's pretty informative even though I missed half of it and I got lost online. I just had one question about maybe an example of a contingency plan for a tier one or a tier one manufacturer. As far as a contingency plan, if it's a quick shutdown or an unfortunate circumstances, you have to close down. That was just one thing when filling out the application would maybe be helpful. And as far as really agreeing with tier one manufacturing being such a small operation, it probably would make sense. And I appreciate you guys speaking about all these things online. And have a good day. Thanks. Thanks, Jason. Again, just feel free to raise your virtual hand or hit star six to unmute yourself. Ben Fisher is next. Hey, thanks everybody for everything as always. I am just a little curious as to the prioritization of these pre-qualification applications. I understand that tier one and small cultivators have a priority, but does that mean that a say a tier two or three cultivator that has a finished application before somebody else on a tier one are tier one applications that have been submitted after larger tier applications? Are they being prioritized? I understand if its application submitted on the same day, but I'm not 100% sure it seems fair to the higher tier applicants that they'll just keep getting pushed back in line every time a smaller tier puts in an application. Thank you. Thanks, Ben. Any other public comments either from folks on the phone or folks that joined via the link? Okay. I'll close the public comment window then and I think the contingency plan, hello? Hello. Yes, sorry, I didn't push the wrong button. I missed just before you closed off. Thanks again. Here's my question. It's a question, not really a comment. What is the escrow amount required as an insurance alternative for tier one cultivator? Okay. Thanks for the comment. I think you can find that in 2.2.2. Okay. Read the rules. Thank you. Yeah, no problem. All right. Any last public comments before we close? All right. Well, thank you for the kind of questions and comments today. We will kind of, we do take them into account. I can just say very briefly that the contingency plan, what we're really looking for is how are you going to deal with kind of securing your inventory, securing any sort of cannabis or anything that you need, anything that we need as a board to make sure that that product doesn't end up on the illicit market, that you can wind down your company in a way that ensures kind of just general compliance with the federal government and just public health and public safety here in Vermont. So that's the kind of purpose of a cessation plan. Other than that, I don't see anything else on our agenda. Julie or Kyle or Brandon or David, is there anything else you want to raise before we adjourn? No, I'm good. All right. Well, then I will adjourn this meeting. We'll be back next week on Monday. I really appreciate everyone joining today and for kind of bearing with us, and we'll see you all next week.