Vermont Admin. Code Agency 25 | Vermont Code of Rules, Agency 25 — Cannabis Control Board

Subagency 000 GENERAL

Chapter 001 RULE 1: LICENSING OF CANNABIS ESTABLISHMENTS

25-001 Code Vt. R. 25-000-001-X RULE 1: LICENSING OF CANNABIS ESTABLISHMENTS

Rule 1: Licensing of Cannabis Establishments Not every applicable prohibition, restriction, and requirement is contained in this rule. All Cannabis Establishments must abide by the prohibitions, restrictions, and requirements of Chapter 33, Title 7 of the Vermont Statutes. Cannabis Establishments must also abide by all other applicable laws, including but not limited to worker's compensation laws and tax laws.

Section 1.1 General Provisions.

1.1.1 Authority

The Cannabis Control Board adopts this rule pursuant to 7 V.S.A. §§ 881, 883, 884, 901, 902, 903, Section 8 of Act 164 (2020), and other applicable law.

1.1.2 Scope and Purpose

The Board is charged with implementing and regulating a legal market for Cannabis in Vermont. This rule regulates the licensing of Cannabis Establishments.

1.1.3 Definitions

All definitions in 7 V.S.A. § 861 shall apply to this rule. The following definitions shall also apply:

(a) "Commercial bank" has the same meaning as defined in 8 V.S.A. § 11101(15).

(b) "Entity" means any person, as defined in 7 V.S.A. § 861(23), that is not a natural person.

(d) "Greenhouse" means a structure or a thermally isolated area of a building that maintains a specialized sunlit environment exclusively for, and essential to, the cultivation or maintenance of Cannabis plants and that is in use for a period of 180 days or more each calendar year.

(e) "Home occupancy business" means a business operated on the premises of an individual's home or property where the individual is domiciled.

(f) "Indoor cultivation" means growing Cannabis using artificial lighting.

(g) "Interest holder" has the same meaning as defined in 11A V.S.A. § 11.01(11).

(h) "Inventory Tracking System" means a method implemented by the Board for tracing all Cannabis and Cannabis Products grown, manufactured, and sold in Vermont.

(i) "Licensee" means a person who has been issued a license pursuant to this rule. A licensee does not include a person who has been issued a prequalification approval.

(j) "Outdoor cultivation" means growing Cannabis in a manner that does not use artificial lighting, provided that outdoor cultivators may use the minimum amount of artificial lighting necessary to keep photoperiod plants in a vegetative state. Artificial lighting for outdoor cultivation must not extend beyond May 1st in a calendar year or past when the specific cultivar can sustain vegetative growth under natural sunlight, whichever comes first.

(k) "Physical site of operations" means:

i. A cultivator's grow site,

ii. A wholesaler's product storage facility,

iii. A manufacturer's site of manufacture,

iv. A retailer's store location, or

v. A testing laboratory's testing facility.

(l) "Prequalification approval" means a certification issued by the Board, in accordance with this rule, prior to a person's approval as a licensee. A prequalification approval does not permit the recipient to operate a Cannabis Establishment.

(m) "Social equity applicant" means either a "social equity individual applicant" or a "social equity business applicant" as those terms are defined in this rule.

(n) "Social equity individual applicant" means an individual who is a resident of Vermont and who meets one or more of the following criteria:

i they are a socially disadvantaged individual, as defined below,

ii they have been incarcerated in a jail or prison facility subsequent to sentencing for a cannabis-related offense, or

iii they have a family member who has been incarcerated in a jail or prison facility subsequent to sentencing for a cannabis-related offense.

1 For the purposes of this definition, "family member" shall mean the following: a spouse, domestic partner (as defined in 17 V.S.A. § 2414(e)(1)), child, step-child who resided with the family member when the child was a minor, minor in their guardianship, legal guardian, parent, sibling, grandparent, or grandchild.

(o) "Social equity business applicant" means:

i A corporation, partnership, or other business entity that meets the federal standards for Disadvantaged Business Enterprises (DBEs) as set forth in 49 C.F.R. §§ 26.69 and 26.71, except as provided in subdivision (1) of this subsection 1.1.3(o)(i), even if the entity has not applied for any federal DBE programs. In determining whether a business applicant meets the federal standards for DBEs, the Board will consider only participants in the business who meet the definition of socially disadvantaged individual as defined by section 1.1.3(p)(i) of this rule and who are residents of Vermont.

1 The requirements of subparts 49 C.F.R. § 26.69(b)(1), (2), and (3) shall not apply to this subsection (o). The majority-interest requirement of 49 C.F.R. § 26.69(b) itself shall apply.

ii A corporation, partnership, or other business entity that is at least 51% owned by a social equity individual applicant as defined in subsection 1.1.3(n)(ii) and (iii) of this rule.

(p) "Socially disadvantaged individual" is an individual who meets at least one of the following criteria:

i They meet the criteria for social disadvantage as set forth in the following federal regulations regarding DBEs: 49 C.F.R. § 26.67(a)(1) and (b)(2)-(3) to the extent permitted in subdivision 1.1.3(p)(i)(1) of this section, whether or not they have applied for any DBE programs, provided that no person shall be excluded from this definition because of their citizenship or immigration status.

1 For the purposes of this rule, the rebuttable presumption in 49 C.F.R. § 26.67(a)(1) shall be applied only to Black Americans and Hispanic Americans.

ii They are (1) from a community that has historically been disproportionately impacted by cannabis prohibition and (2) able to demonstrate to the Board that they were personally harmed by the disproportionate impact. In assessing this personal harm, the Board may consider factors such as educational impacts, lost employment opportunities, or housing insecurity.

1 For the purposes of this subsection, "community" includes, but is not limited to, a person who resided for the majority of their youth prior to turning 18 in a household that was eligible for Federal Distribution Program on Indian Reservations (FDPIR) benefits or that received Supplemental Nutrition Assistance Program (SNAP) benefits, or currently resides in a household that is eligible for FDPIR or that receives SNAP benefits. For the purposes of this subsection, community does not mean professional or civic associations, social organizations, clubs, advocacy organizations, or hobbyist groups. A prior association with cannabis is not, by itself, sufficient to constitute a community.

1.1.4 Applicability

This rule applies to:

(a) Persons who engage in the transfer or sale of Cannabis or Cannabis Products, including transfers or sales related to cultivating, manufacturing, wholesaling, or retailing Cannabis or Cannabis Products, except that this rule does not apply to activities regulated by Chapters 35 and 37 of Title 7 of the Vermont statutes and by Rule 3 of the Board's rules. This rule also applies to those who provide laboratory testing services to persons who engage in the transfer or sale of Cannabis or Cannabis Products.

(b) Persons who engage in the transfer or sale of synthetic cannabinoids and potentially intoxicating hemp-derived cannabinoids, including delta-8 and delta-10 tetrahydrocannabinol.

1.1.5 Time

(a) In computing any time period, measured in days, that is established or allowed by this rule or by order of the Board or Chair:

(1) the day of the act or event that triggers the period shall be excluded;

(2) every day, including intermediate Saturdays, Sundays, and legal holidays shall be counted;

(3) the last day of the period shall be counted, but if the last day is a Saturday, Sunday, or legal holiday, the period continues to run until the end of the next day that is not a Saturday, Sunday, or legal holiday.

(b) A "legal holiday" means:

(1) any day declared a holiday by the President or Congress of the United States; and

(2) any day declared a holiday by the State of Vermont.

1.1.6 Severability

If any portion of this rule is found to be invalid, the remaining portion of the rule shall remain in force and effect.

Section 1.2 License Application Format and Fees.

1.2.1 Form

Applicants are required to submit an application in a format determined by the Board. The Board will make the application form readily accessible to the public.

1.2.2 Fees

Applicants will be required to pay fees, or demonstrate that they qualify for a fee waiver or reduction, in accordance with a fee schedule and waiver or reduction policy that the Board will make readily accessible to the public. The fee waiver or reduction policy will include a schedule of waivers and reductions for social equity applicants.

Section 1.3 License Tiers.

The Board establishes the following tiers for cultivation, retail, and manufacturing licenses, provided that if statute is not in agreement with this section, statute will dictate the tiers and supersede this section. If statute supersedes this section, the Board will construct its application process according to statute and will provide guidance readily available to the general public plainly describing the statutorily mandated tiers.

1.3.1 Cultivation License Tiers

(a) Outdoor Cultivation:

Tier	Max Sq Ft of Total Plant Canopy
1	1,000
2	2,500
3	5,000
4	10,000
5	20,000
6	37,500

ii. For tiers 1-6 of the outdoor cultivation tiers in this subsection (a), the Board will presume that each plant occupies no more than 8 square feet of space. For this reason, cultivators will be presumed to be compliant with the plant canopy limits if they comply with the following plant count limits:

Tier 1: 125
Tier 2: 312
Tier 3: 625
Tier 4: 1250
Tier 5: 2,500
Tier 6: 4,687

Growing more than the maximum plant count for the cultivator's tier will not be a violation of the plant canopy limit if the cultivator can show the plants occupy no more than the maximum square footage permitted for their tier.

iii. Applicants will be required to state on their application if they will measure their plant canopy by square footage or by plant count equivalent.

iv. Plants do not need to be contiguous, but they must be planted within the same school property account number (SPAN) or within two abutting SPANs. A SPAN will be considered abutting if it shares a boundary with a SPAN, or if it is adjacent to a SPAN and is separated only by a river, stream, or public highway.

(b) Indoor Cultivation:

Tier	Max Sq Ft of Total Plant Canopy
1	1,000
2	2,500
3	5,000
4	10,000
5	15,000
6	25,000

(c)

i. Mixed Cultivation:

Tier	Nature of Business
1	May cultivate up to 1,000 sq ft of plant canopy indoors and up to 125 plants outdoors at the same premises
2	May cultivate up to 2,500 sq ft of plant canopy indoors and up to 312 plants outdoors at the same premises
3	May cultivate up to 1,000 sq ft of plant canopy indoors and up to 625 plants outdoors at the same premises
4	May cultivate up to 1,000 sq ft of plant canopy indoors and up to 1250 plants outdoors at the same premises
5	May cultivate up to 1,000 sq ft of plant canopy indoors and up to 2,500 plants outdoors at the same premises

ii. Plants in the outdoor portion of a mixed cultivator's crop do not need to be contiguous, but they must be planted within the same school property account number (SPAN) or within two abutting SPANs. A SPAN will be considered abutting if it shares a boundary with a SPAN, or if it is adjacent to a SPAN and is separated only by a river, stream, or public highway.

1.3.2 Retail License Tiers

Retail - Storefront: This tier is a stand-alone retail location that sells Cannabis and Cannabis Products to consumers.

1.3.3 Manufacturing License Tiers

No manufacturer may violate a prohibition on manufacturing processes contained in 18 V.S.A. § 4230h.

(a) Tier 3 Manufacturer: A tier 3 manufacturer may purchase, process, manufacture, transfer, and sell Cannabis as well as finished and in-process Cannabis Products to other Licensees but not directly to consumers. A tier 3 manufacturer may produce Cannabis Products using all lawful methods of extraction; provided, however, that any extraction method reserved for Tier 3 manufacturers must occur in a building under the jurisdiction of the Division of Fire Safety.

(b) Tier 2 Manufacturer: A tier 2 manufacturer may purchase, process, manufacture, transfer, and sell Cannabis as well as finished and in-process Cannabis Products to other Licensees but not directly to consumers. A tier 2 manufacturer may produce Cannabis Products using the following methods but may not utilize flammable solvent chemical extraction, flammable solvent chemical synthesis, or supercritical CO2 extraction:

i. Water-Based Extraction: extraction using only water, ice, or other freezing substrate or process as approved by the Board.

ii. Food-Based Extraction: extraction using propylene glycol, glycerin, butter, coconut or olive oil, other typical cooking fats, or alcohol as approved by the Board.

iii. Heat/Pressure-Based Extraction: extraction using heat and/or pressure as approved by the Board.

(c) Tier 1 Manufacturer: A tier 1 manufacturer may purchase, process, manufacture, transfer, and sell Cannabis as well as finished and in-process Cannabis Products to other Licensees but not directly to consumers. A tier 1 manufacturer may produce Cannabis Products using the same methods as a tier 2 manufacturer, but not a tier 3 manufacturer. A tier 1 manufacturer must be a home occupancy business with no more than one employee, and under $ 50,000 in gross revenue each year.

1.3.4 Changing Tiers

A licensee may change to a different tier within their license type upon renewal of their license pursuant to Section 1.1 5 of this rule, provided that they meet all other renewal requirements. Upon renewal the licensee must pay the fees associated with the tier they seek to enter.

Section 1.4 License Application Requirements for All License Types.

The requirements in this section apply to all license types authorized under 7 V.S.A. § 901.

1.4.1 Operating plans

Applicants must present an operating plan, which shall include all requirements of 7 V.S.A. § 881(a)(1)(B)(i) and, to the extent they are not required by that provision, the following elements:

(a) The proposed Cannabis Establishment's legal name and any registered alternate name under which it may conduct business.

(b) The name of the individual who will serve as primary point of contact with the Board and an email address where the individual can be contacted.

(d) Documentation that the applicant is an entity registered to do business in Vermont;

(e) A federal tax identification number and social security numbers for each principal of the proposed Cannabis Establishment and each natural person who controls the proposed Cannabis Establishment.

(f) A list of the principals of the proposed Cannabis Establishment.

(g) A list of all persons having control of the proposed Cannabis Establishment.

(h) Whenever a person having control of a Cannabis Establishment is an entity, the applicant must provide:

i. a list of the principals of any entities having control of the Cannabis Establishment; and

ii. a list of natural persons who control any entities having control of the Cannabis Establishment.

Lists provided pursuant to this subsection 1.4.1(h) shall include without limitation natural persons who have control by way of beneficial ownership or record ownership. Intervening entities do not relieve an applicant of the obligation of disclosure under this provision.

(i) Documentation and description, including the persons involved, of any contractual, management, or other agreement that explicitly or implicitly conveys control over the Cannabis Establishment.

(j) For each person identified in (f) through (i) of this subsection, disclose whether that person would be required to be identified pursuant to (f) through (i) of any other license application.

(k) Documentation disclosing whether any person named in sections (f) through (i) of this subsection is a controlling interest holder in a past or present Cannabis-related business in another jurisdiction.

1.4.2 Record Checks

An applicant, principal of an applicant, and person who controls an applicant, who is a natural person, shall be 21 years of age or older and shall consent to the release of his or her criminal and administrative records.

Each applicant, principal of an applicant, and person who controls an applicant, who is a natural person, shall submit the following:

(a) the individual's full legal name and any aliases;

(b) the individual's address;

(d) a photocopy of the individual's driver's license or other government-issued identification card;

(e) a full set of fingerprints in a form and manner as determined by the Board;

(f) any other authorization or disclosure deemed necessary by the Board for the purpose of conducting a background check;

(g) a description of any criminal action against an applicant, principal, or person who controls an applicant in any jurisdiction that resulted in a conviction, guilty plea, plea of nolo contendere or admission to sufficient facts;

(h) a description of any civil action that was commenced or resolved in the preceding 10 years in any jurisdiction in which the applicant, principal, or person who controls an applicant is or was a named party;

(i) a description of any administrative action taken against the applicant, principal, or person who controls an applicant in any jurisdiction;

(j) a description of any disciplinary action against a license, registration, or certification held by the applicant, principal, or person having control of an applicant, such as a suspension or revocation, including, but not limited to, a license to prescribe or distribute controlled substances; and

(k) a description of any license denial, and the reasons for denial, in any jurisdiction.

The Board at its discretion may request any of the information described in subsections (g) through (k) of this section 1.4.2 for any natural person an applicant discloses pursuant to section 1.4.1(h) of this rule.

1.4.3 Financiers

(a) Applicants must disclose documentation detailing the sources and amounts of capital resources available to the applicant from any person that will be contributing capital resources to the applicant for the purposes of establishing or operating the proposed Cannabis Establishment.

(b) In addition to the disclosure requirements for applicants, principals, and persons who control an applicant in section 1.4.1 of this rule, financiers of applicants who do not fall into one of those categories must be 21 years of age and may be subject to the following requirements at the Board's discretion, provided that this subsection shall not apply to commercial banks:

i. A requirement to disclose information to the Board or the Department of Financial Regulation;

ii. a requirement to conduct a background check for natural persons who are financiers or who control financiers;

iii. a requirement to disclose principals and natural persons who control a financier to the same extent required by section 1.4.1(h) of this rule; and

iv. requirements to ensure that a financier complies with any applicable State and federal laws governing financial institutions, licensed lenders, and other financial service providers.

1.4.4 Compliance and Management Plans

All applicants must:

(a) submit a contingency and continuity plan that addresses the dispersal or disposal of inventory in the event of an abrupt closure;

(b) submit a timeline for beginning operations of the Cannabis Establishment;

(d) attest that they will comply with required inspections or permits from other state and local agencies (for example, certificates of occupancy).

Applicants who intend to hire, or who have hired, employees must provide:

(e) an overview of positions and staffing levels;

(f) an overview of general roles and responsibilities of staff;

(g) an overview of the management structure; and

(h) employee hiring and training plan, including safety training.

1.4.5 Insurance, Taxation, and Banking Requirements

Each applicant shall submit the following:

(a) documentation of insurance coverage as required by Board Rule 2.2.2;

(b) documentation of bond or escrow for cessation of operation of a Cannabis Establishment costs in an amount to be determined by Board guidance;

(d) confirmation of current Vermont tax compliance, or confirmation of a plan with the Department of Taxes to come into compliance, provided that this does not apply to tax liability from income related to Cannabis businesses;

(e) school property account number at the physical site of operations;

(f) authorization to release information to other state agencies, or to banking entities with whom the applicant seeks to bank; and

(g) sufficient documentation, as determined by the Board, of one of the following:

i. a deposit account with a financial institution; or

ii. evidence of an attempt to open such an account along with a cash management plan.

1.4.6 Location Information

Applicants must provide both:

(a) A business address as well as precise location information for the physical site of operations for the proposed Cannabis Establishment. A business address does not have to correspond with the physical site of operations. The location information for the physical site of operations must be in the form of GPS coordinates. GPS coordinates must be provided in Decimal Degrees (DD) format.

(b) Proof that the applicant has a right to occupy the physical site of operations, through proof of ownership, a lease, or other document demonstrating a right to occupy and use the property, or proof that such a right will exist prior to the start of Cannabis Establishment operations.

1.4.7 Security

All applicants must submit a plan to comply with security requirements relevant to any license or licenses they seek to obtain, as required by Board Rule 2.

1.4.8 Information Sharing with State Agencies

By applying, an applicant consents to the Board sharing applicant information with other Vermont state agencies, including, but not limited to, the Department of Financial Regulation, the Department of Labor, and the Department of Taxes. Information deemed confidential by 7 V.S.A. § 901(h) will remain confidential even if it is in the possession of another state agency.

1.4.9 Plans Related to Positive Impact Criteria

(a) To the extent required in subsection (b), applicants must include plans related to the criteria listed in subsections (c) and (d). Failure to do so will not result in disqualification of their application but will pause their license approval process until they provide the relevant plan information. To the extent required by this section and section 1.15.3 of this rule, reports related to these criteria will be required for license renewal.

(b) Applicants that are not testing laboratories must show plans for completion of the criteria in subsection (c) and (d) to the following extent:

i. Corporations, partnerships, or other business entities that are not sole proprietorships, and any applicants with plans to hire 2 to 10 employees must show plans to satisfy at least one criteria from subsection (c) and at least one criteria from subsection (d).

ii. All applicants that plan to hire more than 10 employees must show plans to satisfy at least 3 criteria from subsections (c) and at least three criteria from subsection (d).

(c) To the extent required by subsection (b) of this section, applicants must propose plans to recruit, hire, and implement a development ladder for minorities, women, or individuals who have historically been disproportionately impacted by cannabis prohibition using the following options:

i. Inclusive hiring and contracting plans.

ii. A plan for providing a livable wage.

iii. Adopting and supporting incubator or accelerator programs that seek to assist businesses that meet the definition of a social equity applicant or are minority or women-owned, including but not limited to providing:

grants or access to capital;
workforce re-entry training or programming;
cultivation, manufacturing, or retail space;
management training or other forms of industry-specific technical training; or
mentorship from experts;

iv. A contribution or contributions to the Cannabis Business Development Fund established by 7 V.S.A. § 987.

(d) To the extent required by subsection (b) of this section, applicants must propose plans to incorporate principles of environmental resiliency or sustainability, including energy efficiency, using the following options:

i. Sustainable agricultural practices.

ii. Sourcing energy from renewables.

iii. Exceeding minimum waste standards, as provided by Board Rule 2.2.8, or exceeding minimum efficiency standards as provided by Board Rule 2.5, if applicable.

iv. Contribute to anti-pollution efforts, which could include but is not limited to the use of carbon off-sets.

1.4.10 Statement of Truthfulness and Accuracy

All applicants shall attest to the truthfulness and accuracy of the information contained in their application.

Section 1.5 License Application Requirements for Cultivators.

The requirements in this section apply to applications for a cultivator license.

1.5.1 Location Information

In addition to the information required in subsection 1.4.5 of this rule, an applicant must provide:

(a) A diagram or a site plan of the physical site of operation that is clearly legible and includes:

i. north arrow;

ii. standard scale;

iii. size of property in acres (for outdoor cultivator) or total square feet (for indoor cultivator);

iv. total plant canopy dimensions;

v. for outdoor cultivators, use of land and structures that share the property;

vi. for indoor cultivators, a diagram of how non-cultivation parts of the facility will be utilized.

(b) A map showing the boundaries of the planned growing area, provided that this requirement applies only to outdoor cultivator Tiers 2-6.

1.5.2 Water and Wastewater Requirements

General water supply and municipal wastewater requirements:

(a) Cultivators on a municipal water supply must submit a letter from the water utility certifying the utility's capacity to provide a sufficient quantity of water to the applicant at the physical site of operation.

(b) Cultivators using municipal wastewater, or other offsite wastewater system, must submit a letter certifying the wastewater system's capacity to accept the quantity and anticipated strength of wastewater from the physical site of operation.

Tier 5 and 6 Cultivator applicants must:

(c) state the following if their water use and wastewater generation are covered by the Wastewater System and Potable Water Supply Rule, as adopted by the Department of Environmental Conservation:

i. where they are planning on withdrawing water;

ii. by what means will they withdraw and, if necessary, store the water prior to use;

iii. when on-site water is also used for potable/sanitary purposes for workers;

iv. how many people may be on-site in a given day;

(d) specify the volume and strength of the wastewater that the facility anticipates generating, using design flows from the Wastewater System and Water Supply Rule where appropriate and specify how it will be treated and disposed;

(e) state whether the Cannabis Establishment needs to comply with the Indirect Discharge Rules and Underground Injection Control Rules as adopted by the Department of Environmental Conservation; and

(f) describe the anticipated means of collecting, storing, treating, and discharging wastewater.

1.5.3 Indoor Cultivators

Indoor cultivation Cannabis Establishments must identify whether their water supply and wastewater systems must comply with any applicable portion of the Department of Environmental Conservation's Drinking Water and Groundwater Protection Division rules.

Section 1.6 License Application Requirements for Manufacturers.

The requirements in this section apply to applications for a manufacturing license.

Manufacturers must indicate whether they are planning to utilize solvent-based extraction.

Section 1.7 License Application Requirements for Retailers.

The requirements in this section apply to applications for a retail license.

Retailers must indicate whether any intended sale items will contain CBD, hemp, or a hemp-derived compound, or is a consumable item that is not intoxicating.

Section 1.8 License Application Requirements for Testing Laboratories.

The requirements in this section apply to applications for a testing laboratory license.

Applications for testing laboratories may be reviewed for qualification by the Board or a Board designee.

At its discretion, the Board may waive or reduce licensing requirements, including fees, for a laboratory that has a current certification under the Cannabis Quality Control Program established by the Vermont Agency of Agriculture, Food and Markets under 6 V.S.A. § 567.

A testing laboratory applicant must submit:

(a) current laboratory accreditation certificates, or proof of certification under the Cannabis Quality Control Program established by the Vermont Agency of Agriculture, Food and Markets under 6 V.S.A. § 567;

(b) laboratory quality assurance manual or procedures which document the lab quality control system, and an outline of the quality management system;

(d) a master list of all analytical and non-analytical (i.e., safety and training) standard operating procedures indicating the latest revision and review dates and current effective dates;

(e) documentation of educational and technical credentials for all key technical and management personnel;

(f) current organization chart, including reporting relationships;

(g) example Certificates of Analysis (CoA) to be issued by the laboratory for each test area, containing all information required in a CoA;

(h) the latest proficiency results for Cannabis testing or similar matrix (i.e., food, solids,) for all test areas in which it states it is certified, if available;

(i) proof of analytical proficiency.

Section 1.9 License Application Requirements for Integrated Licensees.

The requirements in this section apply to applications for an integrated license.

An integrated license applicant must meet all requirements in sections 1.4 - 1.8 of this rule, and must also submit:

(a) A plan to provide reduced cost or free Cannabis to patients with documented, verified financial hardship who are utilizing the dispensary operation;

(b) a list of products purchased by registered patients in the preceding 12 months;

(d) attestation of good standing with respect to their medical Cannabis dispensary license in accordance with 7 V.S.A. § 903(a) (1). For the purposes of this subsection (f), good standing shall mean the dispensary is in compliance with Chapter 86 of Title 18 of the Vermont Statutes, and with all associated rules.

Section 1.10 License Application Acceptance Periods.

(a) The Board will accept license applications in accordance with legislatively mandated time periods.

(b) Other than legislatively mandated time periods, the Board may open or close acceptance periods for applications at its discretion, provided that the Board will give public notice no less than 30 days prior to opening and 30 days prior to closing an application acceptance period.

(c) The Board may set separate application acceptance periods for each of the license types and may set separate application acceptance periods for each tier within tiered license types.

(d) Other than legislatively mandated application acceptance periods, the Board may open application periods at their discretion, subject to the following limitations:

i. the Board shall accept applications for license types, other than cultivation license types, for no less than 30 days each calendar year; and

ii. the Board shall accept applications for Tiers 1 and 2 of both indoor and outdoor cultivation license types for no less than 30 days each calendar year. The 30-day window for this subdivision 1.10(d)(ii) must open no later than February 1 of each calendar year.

(e) Nothing in this section 1.10 shall be interpreted to impact the license renewal process governed by section 1.15 of this rule.

Section 1.11 Criminal Records and License Qualification Determinations.

1.11.1 Effect of Criminal Records on Application

Except as provided in 1.11.2, no criminal offense committed by an applicant, the principal of an applicant, or a person who owns or controls an applicant, will have a negative effect on their application or disqualify them from obtaining a license.

1.11.2 Presumptive Disqualification

Convictions for offenses in the following categories presumptively disqualify an applicant, the principal of an applicant, or a person who controls an applicant from gaining a license to operate a Cannabis Establishment, provided that a person may overcome the presumption as specified in section 1.11.3:

(a) A listed crime as defined in subsection 13 V.S.A. §5301(7) or the equivalent in another jurisdiction;

(b) A conviction for an offense in 13 V.S.A. chapter 64 or the equivalent in another jurisdiction;

(d) convictions that demonstrate an ongoing involvement with organized criminal enterprises, including violent gangs and drug cartels;

(e) trafficking of a regulated substance other than Cannabis. For the purposes of this subsection (c), trafficking will mean a violation of 18 V.S.A. §§ 4231(c), 4233(c), 4233a(b), 4234a(c), or a non-violent drug distribution offense in another jurisdiction that carries a maximum penalty of 30 years of incarceration or greater;

(f) dispensing cannabis to a person under 21 years of age in violation of 18 V.S.A. § 4230f, or the equivalent offense in another jurisdiction;

(g) misdemeanor convictions that occurred within the 2 years preceding the application; except for non-violent offenses; or

(h) felony convictions that occurred within the 5 years preceding the application, except for non-violent offenses.

1.11.3 Overcoming Presumptive Disqualification

The Board may deem an individual qualified to obtain a license even if they were convicted of an offense enumerated in section 1.11.2. In making this decision, the Board shall consider the following factors:

(a) The nature and seriousness of the crime or offense;

(b) The circumstances under which the crime or offense occurred;

(d) The age of the person when the crime or offense was committed;

(e) Whether the individual committed subsequent offenses;

(f) Any social conditions that may have contributed to the commission of the crime or offense;

(g) The nature and responsibility of the position that the person with a conviction would hold, has held, or currently holds; and

(h) Any evidence of rehabilitation.

License applications will allow applicants to provide additional information related to these factors, if relevant.

Section 1.12 Issuance of Licenses.

(a) The Board shall issue licenses to applicants who meet all requirements for their licenses contained in this rule and all requirements for their licenses contained in Chapter 33 of Title 7 of the Vermont Statutes.

(b) Notwithstanding subsection (a) of this section 1.12, the Board retains the right to deny a license to an applicant that the Board finds would threaten public health or safety if the applicant were to obtain a license. Such a decision shall be supported by written findings.

(c) Applicants who falsely attest to the truthfulness and accuracy of the information in their application will be deemed unqualified for a license. If an applicant applies for a license again subsequent to such a denial, the Board may request additional information from the applicant, at the Board's discretion, to assess the truthfulness and accuracy of the subsequent application.

(d) A licensee, the principal of a licensee, or person who controls a licensee, whose license has been revoked pursuant to Board Rule 4, may not obtain a license until at least 1 year has passed since the revocation took effect.

(e) A grant or denial of a license under this section 1.12 shall constitute a final decision of the Board for the purposes of appeals pursuant to 7 V.S.A. § 847.

Section 1.13 Prequalification Approval,

1.13.1 Purpose of Prequalification Approval

The Board at its discretion may choose to issue prequalification approvals, in accordance with this section, for the purposes of smoothing the application process for applicants as well as assisting the Board in anticipating the structure of the market.

1.13.2 Limits of Prequalification Approval

A prequalification approval does not permit the recipient to operate a Cannabis Establishment. An applicant does not become a licensed Cannabis Establishment, and is not permitted to operate, until the Board issues the applicant a license subsequent to the submission of the applicant's complete and successful application in accordance with this rule.

1.13.3 Forms and Fees for Prequalification Approval

(a) Those applying for prequalification approval are required to submit an application in a format determined by the Board. The Board will make the application form readily accessible to the public.

(b) Applicants will be required to pay fees, or show they qualify for a fee waiver or reduction, in accordance with a fee schedule and waiver or reduction policy that the Board will be make readily accessible to the public. The fee waiver or reduction policy will include a schedule of waivers and reduction for social equity applicants.

1.13.4 Prequalification Approval Application Acceptance Periods

The Board may choose to accept prequalification approval applications at its discretion. It will provide public notice of its intention to accept prequalification approval applications no less than 30 days prior to opening the acceptance period. It will provide public notice of its intention to close a prequalification approval application acceptance period no less than 30 days prior to closure.

1.13.5 Prequalification Approval Application and Issuance

(a) Prequalification approval applications shall consist of the materials required by sections 1.4.1 and 1.4.2 of this rule.

(b) The Board shall certify a prequalification approval for any prequalification approval application that meets the requirements of sub sections 1.4.1 and 1.4.2 of this rule and is not in violation of 7 V.S.A. § 901(d)(3).

1.13.6 Converting a Prequalification Approval to a Full License Application

Prequalification approvals shall remain valid for 365 days from the date of issuance. They may be rescinded by the Board if the Board learns that information provided in the prequalification approval application was not truthful or accurate. Persons with a prequalification approval must do the following to convert their prequalification approval into a full license application:

(a) update all information submitted in accordance with section 1.13.5 of this rule; and

(b) provide all other applicant information required by this rule.

Section 1.14 Priority of Board Considerations for License Applications.

(a) The Board shall consider applications under a priority system that is laid out in a policy readily available to the public.

(b) The policy shall give top priority to social equity applicants when considering applications.

Section 1.15 License Renewal Procedures.

1.15.1 License Renewal Timeframes

(a) Licenses are valid for the time period provided in 7 V.S.A. § 901, except as provided in section 1.17 of this rule.

(b) The Board will send notice for license renewals no less than 120 days prior to the expiration of a license.

(d) A licensee must apply for renewal no less than 30 days prior to the license's expiration date, provided that:

i. if a licensee fails to meet this deadline, they may submit a renewal application accompanied by a written explanation for the untimely filing, and

ii. the Board may accept such a renewal application and, if necessary, continue the licensee's existing license until such time as the renewal process is completed.

(e) If a licensee files a timely renewal application but does not receive a response from the Board prior to the expiration date for their license their license shall continue to be valid until such time as the Board provides a response, at which time their license will be renewed if the application is granted or terminated if it is not.

(f) A licensee who does not submit a license renewal application prior to the expiration of their license is no longer a licensee upon the date their license expires. Such a person may no longer operate the Cannabis Establishment.

1.15.2 License Renewal Form and Fees

(a) Licensees must apply for renewal in a format determined by the Board. The Board will make the application form readily accessible to the public.

1.15.3 License Renewal Information Requirements

Licensees must submit the following information with their renewal applications, if applicable:

(a) efficiency to the extent required by Board Rule 2.5.6;

(b) a description of changes or adjustments to an outdoor cultivation site, if any, providing the same type of location information as required by sections 1.4.5 and 1.5.1 of this rule;

(d) information regarding progress on the licensee's required goals as required by section 1.4.9 of this rule.

Nothing in this section should be interpreted to supersede or alter a licensee's continuing duty to disclose as provided by Board Rule 2.11.

1.15.4 Conditions For Renewal

The Board shall renew the license of a licensee that meets the following requirements:

(a) Remains in compliance with this rule, with all other relevant Board Rules, and with the provisions of Chapter 33 of Title 7 of the Vermont Statutes, provided that Notices of Violation will be dealt with in accordance with subsection (d) of this section 1.15.4;

(b) has paid any fee required by 1.15.2;

(d) is in good standing with the Board. For the purposes of this section, good standing is defined as having no unpaid or otherwise unsatisfied final Notice of Violation against the licensee issued pursuant to Board Rule 4, provided that:

a Notice of Violation will not be considered final for the purposes of this section until all appeals have been exhausted or waived, and
A licensee who is complying with a Board-approved plan to remediate harm stemming from a violation will be considered in good standing.

A licensee whose license has been suspended or revoked pursuant to Board Rule 4 will not be considered a licensee for the purposes of this section. License reinstatement in those circumstances, if available, is governed by Board Rule 4.

Section 1.16 Cannabis Establishment Identification Cards.

1.16.1 Identification Cards for Owners and Principals

(a) For the purposes of this section, an "owner" means a natural person who controls, or shares control of, a Cannabis Establishment.

(b) All owners and principals will be issued Cannabis Establishment identification cards upon the issuance of a license to operate a Cannabis Establishment.

1.16.2 Forms and Fees for Cannabis Establishment Identification Cards

(a) Those applying for identification cards are required to submit an application in a format determined by the Board. The Board will make the application form readily accessible to the public.

1.16.3 Application Requirements for Cannabis Establishment Identification Cards

To apply for a Cannabis Establishment identification card the following information must be submitted:

(a) the individual's full legal name and any aliases;

(b) the individual's address;

(d) a photocopy of the individual's driver's license or other government-issued identification card;

(e) a full set of fingerprints in a form and manner as determined by the Board;

(f) any other authorization or disclosure deemed necessary by the Board for the purpose of conducting a background check;

(g) a listing of criminal convictions, including any pending offenses;

(h) information listed in section 1.11.3 of this rule, if applicable;

(i) if the applicant holds or has held a similar card in another jurisdiction, the name of the issuing authority, and the approximate dates held; and

(j) if a similar card is or has been held in another jurisdiction, whether that card was revoked and the reason for revocation.

1.16.4 Qualification for Cannabis Establishment Identification Cards

Individuals who submit a complete application for an identification card will be issued a card after a background check is complete, except that:

(a) No individual under 21 years of age will be issued an identification card; and

(b) the Board may deny an individual an identification card if an applicant has a record of any of the following:

i. a presumptively disqualifying criminal offense as defined in 1.11.2, provided that the Board will also consider mitigating factors as defined in 1.11.3;

ii. diversion of Cannabis from a past Cannabis Establishment employer in the regulated market in Vermont or another state;

iii. failure to disclose required information on their application;

iv. revocation of a similar identification card from Vermont or another jurisdiction in the last 2 years, or more than twice;

v. fraudulent use of the identification card in Vermont or other jurisdictions including, but not limited to, tampering, falsifying, altering, modifying, duplicating, or allowing another person to use, tamper, falsify, alter, modify, or duplicate the card;

vi. failure to notify the Board of a lost, stolen, or destroyed card; and

vii. failure to notify the Board of convictions pending at the time of application or convictions that occur after the card is issued.

(c) The Board will retain discretion to issue identification cards to individuals who have a record of behavior as outlined in subsection (b) if they demonstrate evidence of rehabilitation or show mitigating social factors surrounding the behavior. Identification card applications will allow for individuals to provide such evidence or explanation, if relevant.

1.16.5 Temporary Work Permit

(a) Upon receipt of an application for an identification card and prior to the completion of a background check the Board will issue a temporary work permit allowing the individual to work at a Cannabis Establishment if the applicant is over 21 years old and discloses no record of behavior related to 1.16.4(b) of this rule, except that the Board retains discretion to deny a temporary license to any applicant if the Board has knowledge of such a record.

(b) The Board may withdraw a temporary permit if they gain knowledge of behavior related to 1.16.4(b) after issuing a permit.

(c) If an application for an identification card discloses behavior related to 1.16.4(b) of this rule, the Board retains discretion to issue a temporary work permit if the Board determines it can do so consistent with public health and safety.

(d) A temporary permit will expire after 4 months, or upon the issuance or denial of an identification card, whichever comes first. If a temporary permit expires before the Board decides whether to issue or deny an identification card, the Board shall issue a new temporary permit card.

1.16.6 Ongoing Duty to Disclose

The holder of an identification card has an ongoing duty to fully and transparently disclose any information relevant to the criteria in section 1.16.4 of this rule.

1.16.7 Identification Card Renewal

(a) All holders of identification cards will undergo a background check by the Board prior to renewal.

(b) Requests to renew identification cards will be considered pursuant to the standard in section 1.16.4 of this rule.

(c) Identification cards will expire in accordance with the timeline provided by 884. Identification cards will have an expiration date printed on them.

(d) Requests to renew identification cards will adhere to the following timeline:

i. A card holder must apply for renewal no less than 30 days prior to the card's expiration date, provided that:

if a card holder fails to meet this deadline, they may submit a renewal application accompanied by a written explanation for the untimely filing, and
the Board may accept such a renewal application and, if necessary, continue the card holder's existing card until such time as the renewal process is completed.

ii. If a card holder files a timely renewal application but does not receive a response from the Board prior to the expiration date for their card the card shall continue to be valid until such time as the Board provides a response, at which time their card will be renewed if the application is granted or terminated if it is not.

iii. A card holder who does not submit a license renewal application prior to the expiration of their card is no longer a card holder upon the date their card expires. Such a person may no longer work at a Cannabis Establishment.

(e) Upon the final expiration of an identification card the holder of the card must return it to the Board or must destroy it.

Section 1.17 Change of License Control or Change of License Location Requires a License Renewal Application.

(a) Either of the following changes to a license requires a licensee to submit a license renewal application in accordance with the terms of this section and section 1.15 of this rule:

i. When an interest holder who has control of a licensee will be changed, including by adding a person who will be an interest holder and will have control, removing a person who is an interest holder and has control, or transferring control from one person who is an interest holder to another person who is an interest holder. This provision does not apply in the event of the death of an interest holder who has control of a licensee. In such instances the licensee shall notify the Board of the death at the time the license is to be renewed pursuant to 901 section 1.1 5.1 of this rule.

ii. When a licensee wishes to change the physical site of operations for their license.

(b) A licensee may not consummate a change of control before the Board approves their license renewal application.

(c) A licensee may not move to a new physical site of operations before the Board approves their license renewal application.

(d) A license renewal application submitted pursuant to this section 1.17 may be submitted at any time, including during the time a licensee's regular renewal application would be submitted pursuant to section 1.15.1 of this rule. For renewal application submitted during the regular renewal timeframe, licensees may submit one renewal application that satisfies section 1.15 and this section 1.17.

(e) The renewal must have all application information updated to reflect the proposed changes of control or change of location. These updates must include, but are not limited to, updates of the information required in sections 1.4.1, 1.4.2, and 1.4.6 of this rule.

(f) A licensee who fails to renew their license prior to consummating a change of control or moving to a new location will be considered a licensee who failed to renew their license before it expired, as provided in section 1.15.1(f) of this rule.

(g) The fees required by section 1.15.2 of this rule will apply to renewal applications submitted pursuant to this section, provided that the Board will retain discretion to waive or reduce fees for such renewals.

(h) A change of control that results in a social equity licensee no longer meeting the qualifications to be a social equity applicant could trigger a requirement that the new licensee repay fee waivers from prior years, in accordance with the fee waiver or reduction policy that the Board will make readily accessible to the public.

(i) Upon Board approval of a license renewal application submitted pursuant to this section the time period for which a license remains valid, as provided by 7 V.S.A. § 901, will start again.

(j) If the Board does not approve a license renewal application submitted pursuant to this section, the licensee may not proceed with the proposed change in control or the proposed move. The licensee's existing license will remain in effect until such time as renewal would otherwise have been required by 7 V.S.A. §901.

(k) A licensee who has been granted a license to change location pursuant to this section shall not be considered to be in violation of the license location restrictions of 7 V.S.A. § 901 during the move from one location to another, provided that:

i. the move may not last longer than 60 days from the grant of the new license, and

ii. the Board retains discretion to find the licensee in violation of Board rules if, in the Board's judgment, the licensee is utilizing this provision to effectively subvert the location limitations of 7 V.S.A. § 901 by operating their Cannabis Establishment out of both locations.

Section 1.18 Waiver Provisions for Tier 1 Cultivators.

Tier 1 indoor cultivators, tier 1 outdoor cultivators, and tier 1 mixed cultivators are not required to comply with the requirements of the following subsections of this rule:

(a) 1.4.2(g), provided that licensees must provide such a description upon renewal for any criminal action that may have occurred in the prior year;

(b) 1.4.2(h), provided that licensees must provide such a description upon renewal for any civil action that may have been commenced or resolved in the prior year;

(d) 1.4.4(b);

(e) 1.4.4(c);

(f) 1.4.4(e), provided that licensees must provide the overview upon renewal;

(g) 1.4.4(f), provided that licensees must provide the overview upon renewal;

(h) 1.4.4(g), provided that licensees must provide the overview upon renewal;

(i) 1.4.4(h), provided that licensees must provide the plan upon renewal;

(j) 1.4.5(b);

(k) 1.5.2(a), if the cultivation establishment will be a home occupancy business; and

(l) 1.5.2(b), if the cultivation establishment will be a home occupancy business.

Section 1.19 Applicant's Ongoing Duty to Disclose.

An applicant has an ongoing duty to fully and transparently update their application while it is pending if there are changes to any information submitted in their application.

Section 1.2 0 Confidentiality.

Application materials will be kept confidential by the Board to the extent required by 7 V.S.A. § 901 a.

History

EFFECTIVE DATE:
March 29, 2022 Secretary of State Rule Log #22-008
AMENDED:
10/21/2023 Secretary of State Rule Log #23-030
STATUTORY AUTHORITY: 7 V.S.A. § 843(b)(1)

Chapter 002 RULE 2: REGULATION OF CANNABIS ESTABLISHMENTS

25-002 Code Vt. R. 25-000-002-X Rule 2: Regulation of Cannabis Establishments

Rule 2: Regulation of Cannabis Establishments Not every applicable prohibition, restriction, and requirement is contained in this rule. All Cannabis Establishments must abide by the prohibitions, restrictions, and requirements of Chapter 33, Title 7 of the Vermont Statutes. Cannabis Establishments must also abide by all other applicable laws, including but not limited to worker's compensation laws and tax laws.

Section 2.1 General Provisions.

2.1.1 Authority

The Cannabis Control Board adopts this rule pursuant to 7 V.S.A. §§ 865, 866, 881, 883, 884, 904, 907, and other applicable law.

2.1.2 Scope and Purpose

The Board is charged with implementing and regulating a legal market for Cannabis in Vermont. This rule regulates Cannabis Establishments and governs synthetic and hemp-derived cannabinoids.

2.1.3 Definitions

All definitions in 7 V.S.A. § 861 shall apply to this rule. The following definitions shall also apply:

(a) "Adulterated" means that a product:

i. consists in whole or in part of any filthy, putrid, or decomposed substance;

ii. has been grown, produced, prepared, packed, or held under conditions whereby it may have been contaminated or otherwise rendered injurious to health;

iii. has been packed or held in a container composed, in whole or in part, of any poisonous or deleterious substance which may render the contents injurious to health;

iv. falls outside of action levels or established tolerances specified in Board testing guidance;

v. does not have the strength, quality, purity, ingredients, or composition represented or expected or consistent with its labeling; or

vi. contains any additive or substance that may increase the potency, toxicity, carcinogenicity, or addictive potential of the product, or that otherwise may present an enhanced risk to human health.

(b) "Board designee" means a person designated by the Board to act as its agent for the purpose of executing the Board's responsibilities. This may be an employee of the Board, another government agency, or a contractor.

(c) "Clone" means a plant section from a cannabis plant not yet root-bound, which is capable of developing into a new plant.

(d) "Distillate" means a concentrate where a segment of cannabinoids from an initial extraction are segregated through heating and cooling, with all impurities removed.

(e) "Full spectrum" means a cannabis concentrate product or infused product that is:

i. derived from a cannabis concentrate;

ii. contains cannabinoids, aromatics, essential vitamins and minerals, fatty acids, protein, flavonoids, and terpenes; and

iii. has not been reformulated or has not had cannabinoid isolates or distillates added to it.

(f) "Greenhouse" means a structure or a thermally isolated area of a building that maintains a specialized sunlit environment exclusively for, and essential to, the cultivation or maintenance of Cannabis plants and that is in use for a period of 180 days or more each calendar year.

(g) "Harvest lot" means cannabis grown in the same manner. To meet the criteria for a single harvest lot, the given lot of cannabis would need to be on the same flowering, fertilizer, and pesticide application schedule. A single harvest lot may contain one or multiple cultivars of cannabis.

(h) "Home occupancy business" means a business operated on the premises of an individual's home or property where the individual is domiciled.

(i) "Indoor cultivation" means growing Cannabis using artificial lighting.

(j) "Interest holder" has the same meaning as defined in 11A V.S.A. § 11.01(11).

(k) "Inventory Tracking System" means a method implemented by the Board for tracing all Cannabis and Cannabis Products grown, manufactured, and sold in Vermont.

(l) "Isolate" means a cannabis concentrate that is more than 98 percent comprised of a single cannabinoid compound created by a chemical process.

(m) "Licensee" means a person who has been issued a license pursuant to Board Rule 1. A licensee does not include a person who has been issued a prequalification approval.

(n) "Outdoor cultivation" means growing Cannabis in a manner that does not use artificial lighting, provided that outdoor cultivators may use the minimum amount of artificial lighting necessary to keep photoperiod plants in a vegetative state. Artificial lighting for outdoor cultivation must not extend beyond May 1st in a calendar or past when the specific cultivar can sustain vegetative growth under natural sunlight, whichever comes first.

(o) "Pesticide" shall have the same meaning as "economic poison" as defined in 6 V.S.A. § 911(5).

(p) "Physical site of operations" means:

i. a cultivator's grow site;

ii. a wholesaler's product storage facility;

iii. a manufacturer's site of manufacture;

iv. a retailer's store location; or

v. a testing laboratory's testing facility.

(q) "Plastic" means a synthetic material made from linking monomers through a chemical reaction to create a polymer chain that can be molded or extruded at high heat into various solid forms that retain their defined shapes during their life cycle and after disposal, including material derived from either petroleum or a biologically based polymer, such as corn or other plant sources.

(r) "Process lot" means whole or partial harvest lots that follow different paths toward market or diverted into waste. For example, a single harvest lot would be broken into two process lots if half was sold fresh frozen to a manufacturer, and half was dried, cured, and sold as bulk flower to a retailer.

(s) "Tincture" means a solvent, such as alcohol or glycerin, infused with cannabis. A tincture may include additional plant material. Tinctures may be sold in any volume but the total milligrams of tetrahydrocannabinol per container must not exceed 1,200mg.

Any time this rule references a retail Cannabis Establishment or otherwise references retail stores, such references shall include the retail portion of an integrated licensee unless the text of the rule plainly states that it does not.

2.1.4 Applicability

This rule applies to any entity that has been licensed pursuant to Rule 1 of the Board's rules.

2.1.5 Time

(a) In computing any time period, measured in days, that is established or allowed by this rule or by order of the Board or Chair:

(1) the day of the act or event that triggers the period shall be excluded;

(2) every day, including intermediate Saturdays, Sundays, and legal holidays shall be counted;

(b) A "legal holiday" means:

(1) any day declared a holiday by the President or Congress of the United States; and

(2) any day declared a holiday by the State of Vermont.

2.1.6 Severability

If any portion of this rule is found to be invalid, the remaining portion of the rule shall remain in force and effect.

Section 2.2 Generally Applicable Regulations.

The requirements in this section are generally applicable to participants in the regulated market for Cannabis and Cannabis Products.

2.2.1 Business Records

Cannabis Establishments are required to maintain the following records in such a way that they can be readily accessed from the physical site of operations and made available for inspection by the Board, upon request:

(a) employee list;

(b) information related to facility security;

(d) inventory records;

(e) insurance records;

(f) visitor log, to the extent required by this rule;

(g) all records retained for tax purposes;

(h) waste log;

(i) surveillance logs, if applicable;

(j) testing records, including all Certificates of Analysis;

(k) sampling unit records;

(l) standard operating procedures manuals; and

(m) corrective action plan and preventive action records, if applicable.

2.2.2 Insurance

(a) A Cannabis Establishment shall obtain and maintain commercially reasonable levels of insurance, as may be further defined in published Board guidance developed in consultation with the Department of Financial Regulation.

(b) A Cannabis Establishment that documents an inability to obtain commercially reasonable levels of insurance coverage as required by subsection (a) of this section must place in escrow a sum in one of the following amounts:

i. For retailers, wholesalers, integrated licensees, testing laboratories, tier 1 manufacturers, and tier 4, 5, and 6 cultivators of any type, a sum of no less than $ 250,000 to be expended for coverage of liabilities.

ii. For tier 2 and 3 manufacturers and tier 2 and 3 cultivators of any type, a sum of no less than $ 50,000 to be expended for coverage of liabilities.

iii. For tier 1 cultivators of any type a sum of no less than $ 10,000 to be expended for coverage of liabilities.

(c) The escrow account required in subsection (b) of this section must be replenished within ten business days of any expenditure.

(d) The escrow account required by subsection (b) of this section must be held by a third party to the satisfaction of the Board.

(e) The escrow account required by subsection (b) of this section, and the escrow account required by Rule 1.4.5(b), may be disbursed only in accordance with guidance issued by the Board.

(f) Cannabis Establishments must be prepared to demonstrate compliance with this subsection at any time, with records maintained in such a way that they can be readily accessed from the physical site of operations upon the request of the Board or Board designee.

2.2.3 Continuing Disclosure and Background Check Requirements

At the Board's discretion, the entities or persons named in Rule 1.4.2 or 1.4.3 may be required to resubmit any information described in those sections if the Board has reason to believe that information has changed since the time of a license application or license renewal. They may be subject to the same background checks and financial disclosures provided for in those sections. The information may be shared with other state agencies, as provided for by Rule 1.4.8.

2.2.4 Health, Safety, and Sanitation

Cannabis Establishments shall:

(a) develop safe and sanitary handling procedures for all products;

(b) develop recall procedures appropriate to ensure that adulterated or dangerous product can be called back from the point of cultivation or manufacturing through efficient communication with downstream trading partners;

(d) ensure that employees follow procedures;

(e) not produce any product that contains any meat or meat products;

(f) not produce any dairy product as defined in 6 V.S.A. § 2672;

(g) not produce any product that requires time and temperature control for safety;

(h) provide documentation of product pH and water activity (a w) if requested by the Board;

(i) provide documentation of process authority review for products where the Board has requested documentation that there are no biological concerns with product manufacturing process;

(j) immediately report to the Board breaches in health, safety, and sanitary procedures that pose a risk to consumer safety;

(k) comply with applicable health, safety, and sanitation rules, including, the Vermont Occupational and Safety and Health Administration Rules, applicable fire safety rules, applicable building standards and occupancy rules, and the Good Manufacturing Practices for Food Rule, as adopted by the Vermont Department of Health; and

(l) if co-located in a residence or building outside the jurisdiction of the Division of Fire Safety, have in the area of regulated activity at least two operating smoke detectors, or a number of operating smoke detectors at least equal in number to operating security cameras, whichever is greater.

2.2.5 Employment and Training

(a) Licensee Training: In accordance with 7 V.S.A. 865(a), the agents of those who control a Cannabis Establishment shall complete an enforcement seminar once every three years. For the purposes of this section, an agent refers to anyone who is an employee of the establishment, who works at the establishment, or who plays a significant operational role within the licensee, including members of the licensee's board of directors or similar governing body.

(b) General Employee Training: within 60 days of hire and annually after that, employees of Cannabis Establishments must complete trainings regarding the following topics, except that employees of retail establishments may not sell Cannabis or Cannabis Products to consumers without first completing trainings regarding the first 5 topics of the following list:

i. the Cannabis Establishment's operating, security, health, safety, and sanitary procedures;

ii. compliance, enforcement, inspection, incident reporting, and record-keeping;

iii. acceptable forms of identification for staff and visitors, if permitted by this rule;

iv. inventory control and appropriate tracking systems;

v. cash handling;

vi. human trafficking and domestic violence awareness;

vii. diversity, equity, and inclusion;

viii. racism and bias; and

ix. sexual harassment and discrimination.

(c) Retail Employee Training: customer-facing employees of retail Cannabis Establishments must complete trainings regarding the following topics, and may not sell Cannabis or Cannabis Products to consumers until they do so:

i. the health effects of Cannabis and Cannabis Products;

ii. preventing the sale of Cannabis to minors; and

iii. signs of overconsumption and signs of mental health or substance abuse disorder.

2.2.6 Tracking of Cannabis and Cannabis Products

(a) Cannabis Establishments shall comply with the Inventory Tracking System in a manner determined by the Board and shall cooperate with any third-party vendors the Board utilizes for the purpose of implementing the system. The Inventory Tracking System policy shall be readily available to the public and will not change without at least 90 days of notice.

(b) Cannabis Establishments shall be responsible for costs associated with compliance with, and adoption of, the Inventory Tracking System.

(c) All Cannabis and Cannabis Products must be tracked using the Inventory Tracking System from the time the Cannabis is grown by a cultivator until it is sold to a consumer by a retailer. A Cannabis Establishment must reconcile all on-premises and in-transit Cannabis or Cannabis Product inventories each month and must complete the reconciliation within 15 days of the end of each month.

(d) Cannabis Establishments must have the ability to reconcile transported and on-hand Cannabis and Cannabis Product inventory with the Inventory Tracking System and the associated transaction history and transportation order receipts.

(e) If Cannabis or Cannabis Product is not ultimately sold to a consumer, it must be disposed of in the manner prescribed by section 2.2.8 of this rule and the disposal must be entered into the Inventory Tracking System.

(f) Cannabis Establishments and the individuals using the Inventory Tracking System are responsible for the accuracy of all information entered into the Inventory Tracking System. Any misstatements or omissions may be considered a license violation affecting public safety.

2.2.7 Transportation of Cannabis and Cannabis Products

Cannabis and Cannabis Products may be transported by the following individuals in the following ways:

(a) Only individuals who have a Cannabis Establishment identification card issued pursuant to Rule 1.6 are permitted to transport Cannabis or Cannabis Products between Cannabis Establishments. Individuals transporting Cannabis or Cannabis Products must carry their identification card at all times while transporting Cannabis or Cannabis Products.

(b) Transportation must take place in a vehicle, except that transportation in a vehicle is not required if the licensee is transporting Cannabis or Cannabis Product from one licensed premises to another within the same or a contiguous property, or any transport where the destination Cannabis Establishment can be seen by the unaided eye from the originating Cannabis Establishment.

i. they must not be visible from outside the vehicle;

ii. the driver must not be able to access them from the driver's seat; and

iii. the vehicle must be unmarked.

(d) Vehicles used for transportation must be registered and current in their registration, inspection, and insurance. Vehicles must have a valid registration with a state's Department of Motor Vehicles, or equivalent agency.

Cannabis Establishments must conduct transports as follows:

(e) Cannabis Establishments may transport Cannabis and Cannabis Products only between Cannabis Establishments.

(f) The transporting Cannabis Establishment must enter all Cannabis and Cannabis Products to be transported into the Inventory Tracking System.

(g) Prior to departure from a Cannabis Establishment, the establishment must generate a transport manifest that contains the following:

i. departure date, location, and approximate time of departure;

ii. name and location of the destination Cannabis Establishment(s);

iii. name and identification card number of those transporting the Cannabis or Cannabis Product;

iv. product name and quantities (by weight and unit) of each product to be delivered to the specific Cannabis Establishment(s);

v. estimated time of arrival at each Cannabis Establishment;

vi. transport vehicle's make, model, and license plate number; and

vii. a signature line and time notation to be signed by an employee of the Cannabis Establishment who receives the transported product.

(h) Cannabis Establishments must transmit transport manifests to receiving Cannabis Establishments before departure.

(i) While transporting Cannabis or Cannabis Products, individuals must log the times of arrival at, and departure from, any stops, whether planned or unplanned. Logs must be maintained contemporaneously and must give a reason for stops that are not at Cannabis Establishments.

(j) To the extent possible, individuals transporting Cannabis or Cannabis Products must stay with their vehicles while transporting Cannabis or Cannabis Products. Where Cannabis Licensed Agents have the option to stay with their vehicle, they must choose that option. Except for the entry and exit of those transporting the Cannabis or Cannabis Product, vehicles must be locked and secured.

(k) No transport of Cannabis or Cannabis Products shall cross state borders.

Cannabis Establishments must receive transports as follows:

(l) Cannabis Establishments receiving Cannabis or Cannabis Product from a transport must log the time of receipt.

(m) Upon receipt of a transport, the receiving Cannabis Establishment shall ensure that the products received are as described in the transport manifest and shall adjust its records and the Inventory Tracking System to reflect the receipt of inventory within 24 hours of when it is received. If there are discrepancies, the receiving Cannabis Establishments must specify them.

Transports must meet these additional conditions:

(n) Storage and transportation shall be under conditions that will protect Cannabis and Cannabis Products from loss and theft, as well as against physical, chemical, and microbial contamination and against deterioration of product.

(o) If a Cannabis Establishment is transporting over 20 pounds of Cannabis on a dry weight basis, the Cannabis must be transported in a secure, locked storage compartment within the transportation vehicle.

(p) Cannabis Establishments shall report to the Board any vehicle accidents, diversions, losses, or other reportable incidents that occur during transport, within not more than 24 hours of such accidents, diversions, losses, or other reportable incidents.

(q) In the event Cannabis has failed required testing, has been contaminated, or otherwise presents a risk of crosscontamination to other Cannabis, such Cannabis may only be transported if it is physically segregated and contained in a sealed package that prevents cross-contamination.

2.2.8 Waste Disposal

(a) All applicable federal, state, and local statutes, regulations, and ordinances apply to waste disposal from Cannabis Establishments. This includes, but is not limited to, all regulations pertinent to chemical, dangerous, and hazardous waste, such as those that may be generated during product manufacturing processes, as well as all pesticides and other agricultural chemicals.

(b) Cannabis or Cannabis Products must be rendered unusable and unrecognizable before disposal. The acceptable methods for rendering Cannabis and Cannabis Product unusable and unrecognizable will be enumerated by the Board in a policy that will be readily available to the public.

(c) Organic material that has either no tetrahydrocannabinol content or a tetrahydrocannabinol content under 0.3%, doesn't need to be rendered unusable or unrecognizable. It can be composted onsite or disposed of in a manner otherwise consistent with applicable law and regulation.

(d) Disposal of Cannabis and Cannabis Products must be tracked with the Inventory Tracking System, as provided for by section 2.2.6 of this rule.

2.2.9 Packaging

(a) The following requirements apply to all Cannabis and Cannabis Product packaging as it is transferred between Cannabis Establishments. Such packaging must:

i. meet the requirements of section 2.2.10(b) of this rule;

ii. clearly identify package contents;

iii. be free from false or misleading statements; and

iv. not use objects, such as toys, inflatables, movie characters, cartoon characters, child-friendly depictions of food or other consumables, or include any other display, depiction, or image designed in any manner likely to be appealing to minors or anyone under 21 years of age.

(b) Packaging that is intended for consumer purchase at a retail location shall be reusable and shall not be plastic. In addition, such packaging shall meet further requirements to the extent provided for in sections 2.3.5, 2.6.3, 2.7.3, and 2.8.4 of this rule.

2.2.10 Warning Labels

The Board will make copies of the labels below readily available for use by Cannabis Establishments.

(a) All marketing, advertising, branding, packaging, and promotion must include the following warning exactly as it is below:

Cannabis has not been analyzed or approved by the Food and Drug Administration (FDA). For use by individuals 21 years of age and older or registered qualifying patient only. KEEP THIS PRODUCT AWAY FROM CHILDREN AND PETS. DO NOT USE IF PREGNANT OR BREASTFEEDING. Possession or use of cannabis may carry significant legal penalties in some jurisdictions and under federal law. It may not be transported outside of the state of Vermont. The effects of edible cannabis may be delayed by two hours or more. Cannabis may be habit forming and can impair concentration, coordination, and judgment. Persons 25 years and younger may be more likely to experience harm to the developing brain.

It is against the law to drive or operate machinery when under the influence of this product. National Poison Control Center 1-800-222-1222.

(b) All product packaging must use the following warning symbols:

Click to view image

(c) All product packaging must include the following statement, including capitalization, in at least 10-point Times New Roman, Helvetica or Ariel and bolded font:

KEEP OUT OF REACH OF CHILDREN

(d) All product packaging for products that contain multiple servings must contain the following statement, including capitalization, in at least 10-point Times New Roman, Helvetica or Ariel and bolded font:

INCLUDES MULTIPLE SERVINGS

2.2.11 Advertising

In addition to those contained in 7 V.S.A. § 864 and section 2.2.10(a) of this rule, the following prohibitions and requirements apply to advertising Cannabis or Cannabis Products:

(a) Cannabis Establishments are prohibited from using objects, such as toys, inflatables, movie characters, cartoon characters, child-friendly depictions of food or other consumables, or include any other display, depiction, or image designed in any manner likely to be appealing to minors or anyone under 21 years of age. This includes, but is not limited to, brand logo development and any advertising used for the purposes of marketing the licensee's dispensary and/or products.

(b) Cannabis Establishments are prohibited from advertising or promoting in a manner that is false, untrue, or misleading.

(c) Cannabis Establishments are prohibited from including in its advertising any statement concerning a brand or product that is inconsistent with any statement on the labeling thereof.

(d) Websites for Cannabis Establishments must have age-gating.

(e) Social media accounts for Cannabis Establishments may only promote products using links to their age-gated websites. Any images or other text regarding products is otherwise prohibited.

2.2.12 Audience Composition Presumptions for Advertising

When considering whether a proposed advertisement meets the requirements of 7 V.S.A. § 864 and of this rule, the Board will make the following presumptions:

(a) That more than 15% of the audience will be under 21 years of age, unless the prospective advertiser can show by a preponderance of the evidence that less than 15% of the audience is reasonably expected to be under 21 years of age. Evidence must include reliable, verifiable, and current audience composition data.

(b) That the audience for any outdoor advertisement is the general public, and those under 21 years of age will have the same prevalence in that audience as they do in the general public, unless a prospective advertiser can demonstrate that an outdoor space will not be accessed by the general public and that those who can access it meet the audience metric of 7 V.S.A. § 864(c).

(c) Except for signage as defined in 7 V.S.A. § 861(2)(D), window displays, or items, text, or objects inside a retail Cannabis Establishment that are visible to a person standing outside the establishment, will be considered an outdoor advertisement for the purposes of this rule.

2.2.13 Visitors

(a) Visitors are only permitted to the extent provided for in this rule.

(b) If this rule makes no provision for visitors at a type of Cannabis Establishment then visitors are not permitted at that type of Cannabis Establishment, provided that the following individuals may be admitted to Cannabis Establishments:

i. Contractors, or professional advisors such as lawyers or accountants, if they are accompanied by a Cannabis Establishment principal or employee who has an identification card issued pursuant to Rule 1.16;

ii. Persons entering for an educational purpose if they are accompanied by a Cannabis Establishment principal or employee who has an identification card I 5r44ssued pursuant to Rule 1.16;

iii. Board designees or other state and municipal officials; and

iv. Those making lawful deliveries pursuant to section 2.2.7 of this rule.

(c) A Cannabis Establishment shall not permit a person under 21 years of age to enter a building or enclosure on the premises where Cannabis or Cannabis Product is located. The Cannabis Establishment is responsible for ensuring compliance with age limitations.

(d) For home occupancy businesses, the provisions of this section apply only to the areas where Cannabis or Cannabis Product is kept, which must be secured in accordance with the provisions of this rule.

(e) This section shall not be interpreted to limit the actions of emergency responders in the course of their duties.

(f) This section 2.2.13 does not apply to retail Cannabis Establishments.

2.2.14 Inspections

Cannabis Establishments shall submit to inspections of their physical site of operations and their records upon request of the Board or a Board designee.

2.2.15 Inversion and Diversion from the Legal Market is Prohibited

No Cannabis Establishment may purchase or obtain Cannabis or Cannabis Products from an entity that is not licensed pursuant to Board Rule 1. Except for retail Cannabis Establishments, no Cannabis Establishment may sell or transfer Cannabis or Cannabis Products to any person other than a licensed Cannabis Establishment.

2.2.16 Compliance in Other Jurisdictions

To the extent the controller or principal of a licensee also controls or is a principal of a licensed Cannabis Establishment, or the equivalent of a Cannabis Establishment, in a different jurisdiction, that Cannabis Establishment must remain in compliance with the laws and regulations of its jurisdiction.

2.2.17 Reporting Theft or Loss

(a) Cannabis Establishments must report theft of Cannabis or Cannabis Product to the Board immediately after discovery of the theft and enter the associated loss into the Inventory Tracking System.

(b) Cannabis Establishments must enter any loss of Cannabis or Cannabis Product into the Inventory Tracking System.

2.2.18 Co-Location

Cannabis Establishments may operate at the same location, subject to the following conditions:

(a) The co-located operation is not in violation of any local ordinances or regulations.

(b) Each Cannabis Establishment operating at the same location shall do all the following:

i. Have distinct and identifiable spaces, areas, or plots, with each licensee operating in its own separate space, area, or plot.

ii. Post notice of its license in its distinct area, space, or plot.

iii. Maintain all the business operations, compliance requirements, and record-keeping that a Cannabis Establishment would maintain if it were operating in its own location.

iv. Otherwise comply with the provisions in the relevant statutes and these rules.

(c) Co-located Cultivation Cannabis Establishments must limit their total canopy to the relevant Tier 6 plant canopy limit, provided that the Board retains discretion to waive this limit.

(d) Co-located cultivation Cannabis Establishments must utilize the security measures that would be required if the combined plant canopy of all the co-located cultivators were treated as belonging to a single Cannabis Establishment.

(e) Co-located Cannabis Establishments that include non-cultivation licensees must utilize the security measures that are the most stringent required of any one of the co-located establishments, as provided by this Rule.

(f) No person may operate in a manner that has the effect of subverting 7 V.S.A. § 901(d)(3)(A) or any other licensure requirements contained in 7 V.S.A. chapter 33 or Board Rule 1, and no person shall exercise control over a Cannabis Establishment without the disclosures required in Board Rule 1.4. At its discretion the Board may require additional information from Cannabis Establishments to ensure compliance with this section.

(g) Multiple retail Cannabis Establishments may not operate at the same location, except that retailers may co-locate to the extent one retailer is providing a mentorship or accelerator program for another.

This section does not apply to dispensaries, which are governed by section 2.10.3 of this rule and by Rule 3.

2.2.19 Adulterated Cannabis and Cannabis Product

(a) Licensees must abide by all orders of the Board issued pursuant to 7 V.S.A. § 904(e)(1) and Board Rule 4. All licensees shall make a prompt report to the Board upon discovery of adulterated Cannabis or Cannabis Product, regardless of cause or fault.

(b) If Cannabis or Cannabis Product is adulterated due to the willful or intentional misuse of a pesticide, the Cannabis must be destroyed in accordance with section 2.2.8 of this rule and reported to the Board by:

i. The cultivator, or

ii. A testing laboratory.

(c) If Cannabis or Cannabis Product is adulterated due to atmospheric drift of an adulterant or a similar natural phenomenon, remediation and re-testing may be attempted if specifically authorized by Board guidance and performed in conformity with the specifications of that guidance.

i. Remediation may include refinement into a manufactured product using a licensed manufacturer.

ii. Re-testing must confirm that a product has been rendered safe before remediation is deemed successful.

iii. If an adulteration poses a public health issue subsequent to remediation the Cannabis or Cannabis Product will need to be destroyed in accordance with section 2.2.8 of this rule.

iv. If Cannabis or Cannabis Product is found to contain threshold levels of aspergillus, a label so indicating must travel with the product, and appropriate steps shall be taken to make aware those individuals who may be exposed.

2.2.20 Cannabis Establishment Identification Card Requirement

(a) All persons working at a Cannabis Establishment must have an identification card issued by the Board pursuant to Rule 1.16.

(b) Any person working at a Cannabis Establishment must have their identification card in their possession at all times while working at the Cannabis Establishment.

2.2.21 Product Licensing

Cannabis Establishments must license products in accordance with 7 V.S.A. § 910(2) and policy issued by the Board.

2.2.22 Security Requirements for Licensees not Otherwise Specified

The Board will establish reasonable security requirements through the adoption of a policy for any license type that may be established by the legislature and is not otherwise contemplated by this rule.

2.2.23 One Location Rule

Licensees will be in compliance with the one location requirement of 7 V.S.A. § 901(d)(3)(A) only if the physical site of operations for a Cannabis Establishment is within two abutting SPANs. A SPAN will be considered abutting if it shares a boundary with a SPAN, or if it is adjacent to a SPAN and is separated only by a river, stream, or public highway.

Section 2.3 Regulations Applicable to Cultivators.

The requirements in this section apply to Cannabis Establishments with any cultivator license.

2.3.1 Pesticides

Cultivators shall abide by the rules and guidelines regarding pesticides that are adopted by the Vermont Agency of Agriculture, Food and Markets.

Cannabis Establishments with a cultivator license shall maintain a record of pesticide usage in such a way that it can be readily accessed from the physical site of operations upon the request of the Board or Board designee.

2.3.2 Visitors to Cultivation Sites

(a) Visitors must be escorted at all times by a Cannabis Establishment employee who has an identification card issued pursuant to Rule 1.16.

(b) Visitors may not consume cannabis in any form on site.

(c) Visitors may not purchase cannabis on site, provided that this shall not be interpreted to prohibit sales at retail Cannabis Establishments that are co-located with a cultivation Cannabis Establishment in accordance with all applicable regulations.

(d) A Cannabis Establishment shall not permit a person under 21 years of age to enter a building or enclosure on the premises where cannabis is located. The Cannabis Establishment is responsible for ensuring compliance with age limitations.

(e) Cannabis Establishments must issue identification badges to visitors, provided that this provision does not apply to any tier 1 cultivation licensees. The badge will:

i. have a design approved by the Board;

ii. be visibly displayed while on the physical site of operations; and

iii. be returned upon exit.

(f) Visitors must be logged with time of entry and exit, and the log will be made available to the Board or a Board designee upon request. Logs must be retained for 1 calendar year.

(g) A safety protocol must be established by license holder before allowing visitors.

(h) Subsections (e) through (g) of this section do not apply to the following individuals:

ii. Board designees or other state and municipal officials; and

iii. Those making lawful deliveries pursuant to section 2.2.7 of this rule.

(i) For home occupancy businesses, the provisions of this section 2.3.2 apply only to the areas where Cannabis is kept, which must be secured in accordance with the provisions of this rule.

(j) This section shall not be interpreted to limit the actions of emergency responders in the course of their duties.

2.3.3 Testing

Cultivators must have their products tested in accordance with rules and guidance established in section 2.9 of this rule. Testing for potency of a crop must take place prior to packaging for transfer to another licensee. Other testing will occur in accordance with the relevant regulations and policies. All test results shall be saved for no less than 1 year.

2.3.4 Cultivator Processing

(a) The word "process" in 7 V.S.A. § 904(a) means:

i. packaging or wrapping Cannabis flower in any manner that Cannabis flower may be transported or consumed.

ii. Trimming Cannabis flower, or other activities necessary for preparing Cannabis flower for packaging or transport.

(b) The word "process" in 7 V.S.A. § 904(a) does not mean transforming Cannabis flower into another substance through manufacturing.

2.3.5 Cultivator Packaging

(a) Except as provided in subsection (b) of this section 2.3.5, when a cultivator transfers Cannabis to another licensee packaging must meet the requirements of:

i. Section 2.2.9(a) of this rule; and

ii. 7 V.S.A. § 904(d)(1).

(b) When a cultivator transfers Cannabis to a retail licensee and the Cannabis is intended for consumer purchase as packaged, packaging must:

i. Meet the requirements of section 2.2.9 of this rule;

ii. Meet the requirements of 7 V.S.A. § 904(d)(1);

iii. Meet the requirements of 7 V.S.A. § 907(c); and

iv. Include testing results, which can be conveyed using a website address, QR code, or similar means of providing access to information accessible on a website.

2.3.6 Cultivator Inspections

(a) The Board or Board designee will conduct inspections, which may or may not be noticed in advance, to ensure compliance with these rules and Title 7, Chapter 33 of the Vermont Statutes.

(b) Inspections may include:

i. collecting samples;

ii. taking photographs or video;

iii. talking to employees, principals, or owners;

iv. inspecting records;

v. inspecting equipment or vehicles used for growing, processing, or transporting Cannabis; and

vi. taking any other reasonable measure to evaluate compliance.

(c) Information obtained from inspections at non-cultivator Cannabis Establishments may inform inspections at cultivator licensees.

(d) Cannabis samples obtained during inspections may be used to assess consumer safety issues and may also be used by the Board for genetic testing and research into taxonomic determinations of cannabis cultivars or varieties grown.

2.3.7 Sanitation

To the extent not already required by section 2.2.4 of this rule, cultivators will ensure:

(a) that any illness or bodily injury to an individual at a cultivation site does not become a source of microbial contamination to a Cannabis crop;

(b) that litter and waste are properly removed so they do not become a source of microbial contamination; and

2.3.8 Cultivation and Operations Information

Cultivating licensees shall submit cultivation and operations information to the Board within 60 days of gaining a license. The information shall include the following:

(a) cultivation schedule;

(b) waste management plan; and

2.3.9 Vendor and Employee Samples

(a) Vendor samples must meet the following requirements:

i. Cultivators may provide a sample of flower to a wholesaler, manufacturer, or retailer, provided that such samples may not be consumed on any licensed premises. Samples must be tested in accordance with rules and guidance established in section 2.9 of this rule.

ii. Samples will be limited to the following aggregate amounts in a calendar month: four grams per strain of flower per vendor, and no more than seven strains of flower per vendor.

iii. Vendor samples must be labeled: VENDOR SAMPLE NOT FOR RESALE.

iv. Samples must be designated and identified in the Inventory Tracking System.

(b) Employee Samples must meet the following requirements:

i. Cultivators may provide samples to employees to determine whether to make product available to sell, provided that such samples may not be consumed on any licensed premises.

ii. Samples will be limited to the following aggregate amounts in a calendar month: four grams per strain of flower per employee, and no more than seven strains of flower per employee.

iii. Employee samples must be labeled: QUALITY CONTROL SAMPLE NOT FOR RESALE.

iv. Samples must be designated and identified in the Inventory Tracking System.

i. Cultivators may provide samples to bona fide evaluative contests with the express written authorization of the Board.

ii. Samples will be limited to the following aggregate amounts per evaluative contest: eight grams per strain of flower, and no more than seven strains of flower.

iii. Competition samples must be labeled: COMPETITION SAMPLE NOT FOR RESALE.

iv. Samples must be designated and identified in the Inventory Tracking System.

(d) For cannabis products, Board guidance specifies milligram equivalence based upon product type and serving units.

2.3.10 Cannabis Cultivation for Personal Use

A cultivator may grow Cannabis for their personal use in accordance with 18 V.S.A. § 4230e. A Cannabis plant grown for this purpose must be physically separated from the cultivator's site of commercial operations and unambiguously labeled to enable a Board designee to readily identify and distinguish personal-use crop. No plant grown for personal use may supply Cannabis to the regulated market, and Cannabis grown for personal use must not be entered into the Inventory Tracking System.

Section 2.4 Regulations Applicable to Outdoor and Mixed Cultivators.

The requirements in this section apply to Cannabis Establishments with an outdoor or mixed cultivator license.

2.4.1 Outdoor Security Management Practices

The Board deems the following to be Outdoor Security Management Practices:

(a) fencing;

(b) video surveillance system with unobscured views of area;

(d) motion activated flood-light, which may face away from the plant canopy;

(e) security services, which may include the physical presence of a security guard; and

(f) controlled point of access.

2.4.2 Standards For Outdoor Security Management Practices

(a) Fencing must be sufficient to prevent unauthorized entry to any cultivation areas.

(b) Electronic security measures and security services, if applicable pursuant to section 2.4.3, must be operating for no less than the three-week period preceding a harvest, as well as while drying, curing, or storing a harvested crop.

i. retain footage for a minimum of 30 days;

ii. include date and time stamps on images without significantly obscuring the images;

iii. be capable of producing usable images in the lighting conditions in which it is placed;

iv. be placed in a way that allows for the clear and certain identification of any persons or activities at or in the immediate vicinity of any Cannabis or Cannabis Product, provided that video recordings may be motion-activated; and

v. be exportable and transferrable to standard computing equipment and have a resolution of 720p or greater or the equivalent of such a resolution.

2.4.3 Minimum Outdoor Security Management Practices

Outdoor cultivators and the outdoor portion of a mixed cultivator's crop must implement Outdoor Security Management Practices to the extent required in this section unless they apply to the Board for a variance from the fencing requirement, which the Board will consider on a case-by-case basis.

(a) Tier 1 outdoor cultivators and mixed cultivators must utilize at least 1 of the Outdoor Security Management Practices in section 2.4.1.

(b) Tier 2 outdoor cultivators must utilize at least 2 of the Outdoor Security Management Practices in section 2.4.1 and one of them must be fencing.

(c) Tier 3 outdoor cultivators must utilize at least 3 of the Outdoor Security Management Practices in section 2.4.1 and one of them must be fencing.

(d) Tier 4 outdoor cultivators must utilize at least 4 of the Outdoor Security Management Practices in section 2.4.1 and one of them must be fencing.

(e) Tier 5 outdoor cultivators must utilize at least 5 of the Outdoor Security Management Practices in section 2.4.1 and one of them must be fencing.

(f) Tier 6 outdoor cultivators must utilize all of the Outdoor Security Management Practices in section 2.4.1.

2.4.4 Visibility From a Public Road

If a crop would be visible from a public road, as defined in 24 V.S.A. § 4303(33), a physical barrier of concealment must be created such that the crop is not visible from the public road. Such barriers may include, but are not limited to, fencing, hedges, or building structures.

2.4.5 Additional Requirements

(a) At the Board's discretion, a physical site of operations may be inspected by a Board designee to determine security risks and visibility from a public road either before or after the Board has granted a license. The Board retains the right to require additional Outdoor Security Management Practices or barriers subsequent to such an inspection.

(b) If a Cannabis Establishment experiences more than one incident of theft in a one-year time period, additional Outdoor Security Management Practices may be required at the Board's discretion.

2.4.6 Security for Drying, Curing, and Storage

Security for Cannabis drying, curing, and storage must meet the requirements of section 2.5.1 of this rule.

2.4.7 Allowance for Winter Indoor Storage

Mother plants, Cannabis plant-seeds, and clones in propagation or vegetation phase of development may be kept indoors during winter months when outdoor cultivation is not possible, provided that outdoor cultivation licensees may not cultivate Cannabis indoors.

Section 2.5 Regulations Applicable to Indoor and Mixed Cultivators.

The requirements in this section apply to Cannabis Establishments with an indoor or mixed cultivator license.

2.5.1 Security

Indoor cultivators and the indoor portion of a mixed cultivator's crop must utilize the following security measures:

(a) All perimeter doors and windows must be locked, and only individuals with a Cannabis Establishment identification card, granted in accordance with Board Rule 1.16, may have keys or a key equivalent.

(b) All perimeter doors and windows must have operational security alarms, provided that Tier 1 and mixed cultivators are not required to have security alarms unless the Board requires it, which the Board retains the discretion to do on a case-by-case basis.

(c) Video surveillance with continuous monitoring of any space that contains Cannabis, whether growing or harvested, or Cannabis Products. Video surveillance must meet the standards of section 2.4.2(c) of this rule.

2.5.2 Security for Drying, Curing, and Storage

Security for Cannabis drying, curing, and storage must meet the requirements of section 2.5.1 of this rule.

2.5.3 Energy Standards for Buildings

(a) Vermont Commercial Building Energy Standards (CBES) will apply to indoor cultivation facilities in the following areas to the same extent they would for any other commercial building:

i. The building envelope must meet CBES for insulation.

ii. Non-cultivation lighting must meet CBES for new buildings and retrofits.

iii. Ventilation must meet CBES.

iv. HVAC systems must meet CBES for efficiency, except that HVAC equipment used for cultivation does not need economizers and heat recapture.

(b) Greenhouses must meet CBES for HVAC equipment efficiency, except that HVAC equipment used for cultivation does not need economizers and heat recapture.

(c) Fans and clean water pumps at indoor cultivation facilities should, at the date of equipment purchase, comply with the most recent energy efficiency standards adopted by the federal Department of Energy.

2.5.4 Energy Standards for Lighting

Cannabis Establishments shall have one year from the date of licensure to come into compliance with the following requirements:

(a) Lighting for indoor cultivation must have a minimum of 1.9 Photosynthetic Photon Efficacy (PPE).

(b) Lighting for greenhouses:

i. The envelop must have a minimum u-factor of 0.7.

ii. If a greenhouse uses lighting fixtures to supplement the sun, the cultivation lighting must have a minimum of 1.7 PPE, except that if a greenhouse has a total connected lighting load of less than 40 kilowatts it is exempt from lighting requirements.

2.5.5 Energy Standards for Dehumidification

Cannabis Establishments shall have one year from the date of licensure to come into compliance with the following requirements:

One of the following dehumidification systems must be used for indoor cultivation:

(a) Standalone dehumidifiers must meet the following minimum integrated energy factors:

i. Minimum integrated energy factor of 1.77 L/kWh for product case volumes of 8.0 cubic feet or less, or

ii. Minimum integrated energy factor of 2.41 L/kWh for product case volumes greater than 8.0 cubic feet.

(b) Integrated HVAC system with on-site heat recovery designed to fulfill to least 75 percent of the annual energy for dehumidification reheat.

(c) Chilled water system with on-site heat recovery designed to fulfill at least 75 percent of the annual energy for dehumidification reheat.

(d) Solid or liquid desiccant dehumidification system for system designs that require dewpoint of 50? Fahrenheit or less.

2.5.6 Energy Usage Reporting and Reduction Efforts

(a) License holders must report energy efficiency benchmarks annually to the Board as a condition of license renewal.

(b) License holders must annually update and submit to the Board written operating procedures regarding equipment maintenance, calibration and proper operation, for all major energy equipment, including, but not limited to, horticultural lighting, HVAC systems, and dehumidification systems.

(c) License holders must annually assess and report to the Board on opportunities to reduce energy, which should include:

i. identification of potential energy use reduction opportunities (such as natural lighting and energy efficiency measures), and a plan for implementation of such opportunities;

ii. consideration of opportunities for renewable energy generation, including, where applicable, identification of building plans showing where energy generators could be placed on the site, and an explanation of why the identified opportunities were not pursued, if applicable;

iii. strategies to reduce electric demand (such as lighting schedules, active load management, and energy storage); and

iv. engagement with energy efficiency programs offered by Efficiency Vermont, Burlington Electric Department, or Vermont Gas Systems.

Section 2.6 Regulations Applicable to Manufacturers.

The requirements in this section apply to Cannabis Establishments with a manufacturing license.

Manufacturers shall abide by any requirements and limitations contained in 7 V.S.A. § 881(a)(3), 7 V.S.A. §868, and 18 V.S.A. §4230h, in addition to the requirements of this section.

2.6.1 Manufacturer Security

Manufacturers must meet all requirements of section 2.5.1 of this rule.

2.6.2 Testing

Manufacturers must have their products tested in accordance with rules and guidance established in section 2.9 of this rule.

Test results shall be saved for no less than one year.

2.6.3 Manufacturer Packaging

(a) Except as provided in subsection (b) of this section 2.6.3, when a manufacturer transfers Cannabis to another licensee packaging must meet the requirements of section 2.2.9(a) of this rule.

(b) When a manufacturer transfers Cannabis Product to a retail licensee and the Cannabis Product is intended for consumer purchase as packaged, packaging must meet the following requirements:

i. include the manufacturer's license number and process lot number;

ii. All requirements of section 2.2.9 of this rule.

iii. All requirements contained in 7 V.S.A. § 881(a)(3)(A), (B), and (C).

iv. For consumable Cannabis Products packaging must include:

the number of servings in the package and serving size, provided that servings must be easy for a consumer to measure, either by clear and visible marking on the Cannabis Product or physical separation of servings; and
a warning that the impairment effects of the Cannabis Product may be delayed by two hours or more.

v. For non-consumable Cannabis Products packaging must include:

the ingredients used in production, including scents or other additives, and common irritants warnings; and
notice that the product is not for consumption.

vi. Disposable vape pens or other disposable vaping devices are prohibited. Disposable vape pens are all-in-one, precharged vape pens that include a battery and are not rechargeable; do not allow for refilling of e-liquids, oils, extracts, or distillates; or are otherwise unsuited for refill and reuse.

2.6.4 Additives

(a) For Cannabis Products intended for oral ingestion, such as food, drinks, oil-based tinctures, and similar products, manufacturers may use any additive that the Food and Drug Administration has deemed Generally Recognized as Safe, unless the additive is otherwise prohibited or limited by law or rule.

(b) For Cannabis Products intended for inhalation, the Board will maintain a schedule of approved and disapproved ingredients that will be readily available to the public.

(c) The total terpene content of a cannabis product intended for inhalation or vaporized formulation may not exceed 10 percent by weight. All terpenes added to a cannabis product must be naturally occurring in the cannabis plant. Any concentrated terpenes added to a cannabis product shall be disclosed on the label. This rule, 2.6.4(c), may be waived if a manufacturer demonstrates to the Board's satisfaction that excess terpene content is not the result of additives.

(d) Manufacturers shall abide by any prohibition contained in 7 V.S.A. § 868.

2.6.5 Records

Manufacturers shall maintain the following records in such a way that they can be readily accessed from the physical site of operations upon the request of the Board or Board designee:

(a) Records of purchases from any manufacturer or supplier of an ingredient, additive, component, or other substance, compound, or material obtained by the manufacturer.

(b) Records of the name and business address of the manufacturer of any cartridge, battery, atomizer coil, hardware, device, or other component in vaporized products.

(c) A copy of a Certificate of Analysis for each thickening agent, thinning agent, or terpene used in production. These Certificates of Analysis shall be provided to a retailer or wholesaler upon request.

2.6.6 Vendor and Employee Samples

(a) Vendor samples must meet the following requirements:

i. Manufacturers may provide a sample of Cannabis Product to a wholesaler or retailer, provided that such samples may not be consumed on any licensed premises. Samples must be tested in accordance with rules and guidance established in section 2.9 of this rule.

ii. Samples will be limited to the following aggregate amounts in a calendar month: Five grams of concentrate or extract, or 100 servings of edibles per vendor, so long as the tetrahydrocannabinol content of each individual edible sample does not exceed five milligrams per serving and is within any applicable statutory or regulatory potency levels.

iii. Vendor samples must be labeled: VENDOR SAMPLE NOT FOR RESALE.

iv. Samples must be designated and identified in the Inventory Tracking System.

(b) Employee Samples must meet the following requirements:

i. Manufacturers may provide a sample of Cannabis Product to an employee to determine whether to make a product available to sell, provided that such samples may not be consumed on any licensed premises.

ii. Samples will be limited to the following aggregate amounts in a calendar month: five grams of concentrate or extract, or 100 servings of edibles per employee, provided that the tetrahydrocannabinol content of each individual edible sample does not exceed five milligrams per serving and is within any applicable statutory or regulatory potency levels.

iii. Employee samples must be labeled: QUALITY CONTROL SAMPLE NOT FOR RESALE.

iv. Samples must be designated and identified in the Inventory Tracking System.

Section 2.7 Regulations Applicable to Wholesalers.

The requirements in this section apply to Cannabis Establishments with a wholesaler license.

2.7.1 Wholesaler Security

(a) Wholesalers must meet all requirements of section 2.5.1 of this rule.

(b) Manufactured Cannabis Product, but not Cannabis flower, must be kept in a reasonably secure locked space.

2.7.2 Wholesaler Processing

(a) The word "process" in 7 V.S.A. § 905(b) means:

i. Packaging or wrapping Cannabis flower in any manner that Cannabis flower may be transported or consumed.

ii. Trimming Cannabis flower, or other activities necessary for preparing Cannabis flower for packaging or transport.

iii. Packaging Cannabis Products in any manner that Cannabis Products may be packaged.

(b) The word "process" in 7 V.S.A. § 905(b) does not mean transforming Cannabis flower into another substance through manufacturing.

2.7.3 Wholesaler Packaging

(a) Except as provided in subsections (b) and (c) of this section 2.7.3, when a wholesaler transfers Cannabis or Cannabis Product to another licensee packaging must meet the requirements of section 2.2.9(a) of this rule.

(b) When a wholesaler transfers Cannabis to a retail licensee and the Cannabis is intended for consumer purchase as packaged, packaging must meet the requirements of section 2.3.5(b) of this rule.

(c) When a wholesaler transfers Cannabis Products to a retail licensee, and the Cannabis Products are intended for consumer purchase as packaged, packaging must meet the requirements of section 2.6.3(b) of this rule.

Section 2.8 Regulations Applicable to Retailers.

The requirements in this section apply to Cannabis Establishments with a retailer license.

2.8.1 Buffer Zones

Retail Cannabis Establishments shall not be located at a place where the sale of a regulated drug would constitute a violation of 18 V.S.A. § 4237(d).

2.8.2 Retail Security

Retailers must meet all requirements of section 2.5.1 of this rule, along with the following additional requirements:

(a) Alarm systems installed by retailers must be installed by an alarm installation company with expertise in industry standard commercial-grade alarm systems.

(b) Video surveillance must include point-of-sale areas, all entrances, exits, and any area where Cannabis or Cannabis Product is stored or handled.

(d) Video footage must be kept for at least 30 days, and video recording devices must be continuously recording.

(e) Employees shall wear identification badges that clearly identify them as employees while on duty.

(f) Upon request, a retailer shall make available to the Board or Board designee all information related to security alarm systems, monitoring, alarm activity, maps of camera locations and camera coverage, surveillance equipment maintenance log, authorized user list, operation instructions, and any other relevant information.

(g) The number of customers in the retail area at any given time may not be more than can be easily monitored by the employees present in the retail area.

(h) The requirements of 7 V.S.A. § 881(a)(5), to the extent not already covered by this rule.

2.8.3 Age Verification and Customer Personal Information

(a) Immediately upon a visitor entering the retail premises an individual who has been issued an identification card pursuant to Board Rule 1.16 shall inspect the visitor's proof of identification and determine the visitor's age. This age check shall take place in the immediate vicinity of the entrance to the retail premises.

(b) "Acceptable form of identification" shall mean a photo identification issued by a government, and it must be current and valid.

(c) No individual shall be admitted unless the retailer has verified that the acceptable form of identification matches the visitor and that the visitor is 21 years of age or older.

(d) Prior to completing a transaction for the purchase of Cannabis or a Cannabis Product, an individual who has been issued an identification card pursuant to Board Rule 1.16 shall inspect the visitor's proof of identification and determine the visitor's age.

(e) A retailer may not acquire or record visitor personal information other than information typically required by a retail transaction, which can include information to determine the visitor's age.

(f) A retailer may not record or retain any additional personal information from a visitor without the visitor's permission.

(g) Retailers shall refuse to sell to any visitor who is unable to produce valid proof of their age using an acceptable form of identification.

2.8.4 Retailer Packaging

(a) Packaging for all Cannabis and Cannabis Products sold in retail establishments must meet the following requirements:

i. All requirements contained in section 2.2.9 of this rule.

ii. Packaging must have information regarding the test results of the Cannabis or Cannabis Product, provided that packaging may convey such information using a website address, QR code, or similar means of providing access to information available on a website.

(b) For Cannabis, packaging must meet the requirements contained in section 2.3.5(b) and 907(c) of this rule in addition to subsection (a) of this section 2.8.4.

(c) For Cannabis Products, packaging must meet the requirements contained in section 2.6.3(b) of this rule in addition to subsection (a) of this section 2.8.4.

2.8.5 Collection and Reuse of Consumer Packaging Waste

(a) Retail Cannabis Establishments may collect, reuse, and recycle consumer packaging waste. Only retail Cannabis Establishments may collect consumer packaging waste for reuse and recycling. Such Cannabis Establishments may collect consumer packaging waste from consumers or from other licensees.

(b) Any receptacles used for collection of Consumer Packaging Waste shall be located inside the Cannabis Establishment such that they are subject to the same security measures as the rest of the establishment. They shall be reasonably supervised by a licensee to ensure any consumer packaging waste is only removed by a licensee.

(c) Any receptacles used for collection of consumer packaging waste shall be labeled. The label must at least identify the receptacle as "consumer packaging waste." A licensee may choose to include additional information on the receptacle label.

(d) Licensees collecting consumer packaging waste pursuant to this section 2.8.5 must ensure at a minimum that any remaining Cannabis or Cannabis Product in consumer packaging waste is removed and destroyed to the extent practicable. The waste disposal requirements of section 2.2.8 of this rule shall apply.

(e) Once any remaining Cannabis or Cannabis Product has been removed and destroyed pursuant to these rules, a licensee may:

i. Reuse consumer packaging waste if the packaging has been sanitized and disinfected.

ii. Transfer consumer packaging waste to another licensee for reuse or may transfer consumer packaging waste to a person for recycling or reuse.

(f) A Cannabis Establishment that is reusing consumer packaging waste must sanitize and disinfect the packaging.

(g) Child-resistant containers may be reused as child-resistant containers to the extent they continue to meet the requirements of 7 V.S.A. § 861(16).

2.8.6 Standard Operating Procedures

Retailers must maintain standard operating procedures regarding the following subjects in such a way that they can be readily accessed from the physical site of operations upon the request of the Board or Board designee:

(a) security measures;

(b) employee security policies, including personal safety and crime prevention techniques;

(d) plan for storage of inventory;

(e) procedures to ensure accurate recordkeeping, including inventory protocols and compliance with the Inventory Tracking System;

(f) quality control plans;

(g) emergency procedures in case of a fire or other emergency;

(h) how confidential information will be maintained; and

(i) policy for immediate dismissal of an employee who has diverted Cannabis or Cannabis Product or engaged in unsafe practices.

2.8.7 Retailer Samples

Retailers may accept vendor samples as permitted by sections 2.3.9 and 2.6.6 of this rule but are prohibited from offering such samples for sale. Acceptance of such samples must be logged in the Inventory Tracking System.

2.8.8 Employee Samples

(a) Retailers may provide a sample of Cannabis or Cannabis Product to an employee to determine whether to make a product available to sell, provided that such samples may not be consumed on any licensed premises.

(b) Samples will be limited to the following aggregate amounts in a calendar month: five grams of concentrate or extract, or 100 servings of edibles per employee, provided that the tetrahydrocannabinol content of each individual edible sample does not exceed five milligrams per serving and is within any applicable statutory or regulatory potency levels.

(d) Samples must be designated and identified in the Inventory Tracking System.

2.8.9 Display Samples

Retailers may provide samples of Cannabis flower in enclosed containers for viewing or smelling by visitors. Such samples may not be touched by visitors or sold or transferred to visitors and their use and disposal must be tracked in the Inventory Tracking System.

2.8.10 Safety Information Flyer

Retailers shall display a safety information flyer created by the Board at the point of purchase, in accordance with 7 V.S.A. § 907(d). The Board shall make the flyer readily available to the public and to retail establishments for their use. The Board may update the flyer at any time and will provide notice to licensed retail establishments when it makes such an update.

2.8.11 Clones

Retailers may sell clones to the extent permitted in guidance adopted by the Board.

Section 2.9 Regulations Applicable to Testing Laboratories, Cultivators, and Manufacturers.

The requirements in this section apply to Cannabis Establishments with a testing laboratory license, as well as to cultivators and manufacturers who must have their product tested in accordance with the standards in this section.

2.9.1 Testing Requirements

Testing terms, processes, and requirements, including representative sampling requirements, are set out in guidance approved by the Board and published to the Board's website. The Board may, in its sole discretion, require additional testing or establish mandatory reporting thresholds appropriate to protect the public health and safety or to monitor pathogen transmission.

Unless necessary to address a compelling risk to the public health and safety, amendments to Board testing guidance shall be publicly noticed at least 90 days before taking effect.

Laboratories should have capacity to perform, and cultivators and manufacturers must undertake, the following analyses, based upon product form:

(a) General harvest lot parameters

i. All cultivars must be individually tested for potency and pathogens;

ii. Smokable flower must be tested for water activity; and

iii. Up to five simultaneously submitted cultivars may be comingled by the laboratory for pesticide testing.

(b) For mechanically extracted or infused process lots

i. Final potency of extract must be tested, and

ii. Harvest lot pesticide and pathogen COAs must travel with extract.

i. Pesticides;

ii. Residual solvents;

iii. Potency; and

iv. Heavy metals.

(d) For manufactured process lots, COAs from all process lots in the manufacturing process lots must be associated with the manufacturing process lot.

(e) For finished edible products, harvest lot or process lot COAs must travel with products, and the following must be tested:

i. Final product potency; and

ii. Potency consistency/homogeneity (tier and product dependent; consult guidance).

2.9.2 Potency Parameters

(a) Cannabis must have no greater than a 20% variation from the label representation regarding total theoretical THC as defined by subsections (f) and (g) in this section 2.9.2, and other cannabinoids.

(b) Cannabis Product with a label representation of between 0 milligrams to 10 milligrams of total cannabinoid content must have no greater than a 25% variation from the label representation.

(c) Cannabis Product with a label representation of between 10 milligrams to 100 milligrams of total cannabinoid content must have no greater than a 20% variation from the label representation.

(d) Cannabis Product with a label representation of greater than 100 milligrams of total cannabinoid content must have no greater than a 10% variation from the label representation.

(e) Homogeneity must be established by beginning-middle-end testing, to be determined by batch size and performed in conformity with Board guidance.

In assessing potency, laboratories will use the following formulation:

(f) Tetrahydrocannabinolic acid (THCA) is the precursor of delta-9 tetrahydrocannabinol (THC).

(g) The laboratory determination of potency will be determined by total theoretical THC.

(h) Total theoretical THC content is the maximum amount of possible delta-9 THC in a cannabis crop if total conversion from THCA to THC were to occur. The calculated amount of total theoretical THC is determined as follows:

i. the sum of the concentration of delta-9 tetrahydrocannabinol added to the amount of tetrahydrocannabinolic acid after it is multiplied by 0.877 on a dry weight basis and reported to two significant figures.

ii. The following mathematical equation expresses this calculation:

[See formula in original source]

2.9.3 Moisture Parameters

Moisture parameters will be set in accordance with guidance issued by the Board. Potency is always to be determined by dry weight.

2.9.4 Microbiological Parameters

The following human pathogens will be measured, and the limits set, in accordance with guidance issued by the Board.

(a) Shiga, toxin producing escherichia coli (STEC) - Bacteria

(b) Salmonella species - Bacteria

2.9.5 Metal Parameters

The following metals will be measured and the limits set in accordance with guidance issued by the Board.

Arsenic
Cadmium
Lead
Mercury
Chromium
Copper
Nickel

2.9.6 Pesticides

Cultivators shall abide by the rules and guidelines regarding pesticides that are adopted by the Vermont Agency of Agriculture, Food and Markets.

2.9.7 Residual Solvent Parameters

Residual solvents will be measured and the limits set in accordance with guidance issued by the Board.

2.9.8 New Tests

When a laboratory seeks to gain certification for a new test, it must also submit to the Board the method validation summaries for any new test.

2.9.9 Proficiency

A laboratory must maintain analytical proficiency for each test it administers.

2.9.10 Records

In addition to all other relevant disclosure requirements, upon request of the Board or Board designee laboratories shall provide full access to all test records.

2.9.11 Maintenance of Certifications

Laboratories must maintain their certifications and accreditations and notify the Board if any lapse.

2.9.12 Remediation of Adulterated Cannabis

Adulterated Cannabis or Cannabis Product may not be sold or registered, except for product that may be remediated and has been satisfactorily remediated as prescribed by section 2.2.19 of this rule.

2.9.13 Other Parameters or Testing Methods

The Board retains discretion to change or add testing parameters, required pathogens, or other substances to the testing required under this rule.

Section 2.10 Regulations Applicable to Integrated Licensees.

The requirements in this section apply to applications for an integrated license.

2.10.1 All Cannabis Establishment Regulations Applicable

All regulations in sections 2.2 through 2.9 of this rule applies to integrated license holders. When manufacturing, integrated licensees will be permitted to utilize all lawful methods of extraction.

2.10.2 Dispensaries and Medical Cannabis

Except to the extent provisions in this section 2.10 impact dispensary operations, dispensaries and the medical cannabis registry are not regulated by this rule. They are regulated by Board Rule 3 and by Chapters 35 and 37 of Title 7 of the Vermont Statutes.

2.10.3 Co-located Operations

(a) Integrated licensees may commingle Cannabis cultivation for adult-use sales with cultivation for dispensaries.

(b) Prior to transfer to either a dispensary or a retail establishment, the licensee must create and maintain strict separation between Cannabis and Cannabis Product that will be sold through a retailer and Cannabis and Cannabis Product that will be sold through a dispensary to a registered patient. The separation must be documented in the Inventory Tracking System.

(c) Integrated licensees may co-locate operations from different license types in the same location, but co-located operations must maintain all relevant security requirements for each license type and must maintain all Inventory Tracking System requirements.

(d) Dispensaries may be co-located with retail Cannabis Establishments, provided that:

i. integrated licensees must have a system in place to ensure that staff give priority of service, including priority of entrance and sales, to registered dispensary patients before adult use consumers. This shall include curbside sale, if requested, for dispensary patients.

ii. Strict protocols must be in place to ensure that medical products for dispensary patients are not sold to adult-use consumers.

2.10.4 Duty to Maintain Continuity of Services to Medical Patients

(a) Integrated licensees must ensure their dispensary operations maintain continuity of services to medical Cannabis patients.

(b) If an integrated licensee has commingled their cultivation pursuant to 2.10.3(a), continuity of services will include designating sufficient biomass at an integrated licensee's cultivation facility to meet demand for medical Cannabis and Cannabis Products as indicated by dispensary sales data for the preceding 3 months. Such records and calculations will be provided to the Board or a Board designee upon request.

2.10.5 Use of Dispensary Cultivation for Integrated Licensees

Dispensary operations may transfer Cannabis and Cannabis Products to integrated licensees to the extent provided by Section 8 of Act 164 (2020), subject to the conditions in this section.

Beginning on the date retail establishments that are not part of an integrated license may begin sales:

(a) The tiered plant canopy limits in Board Rule 1.3.1 that apply to all cultivator licenses apply to the cultivator portion of an integrated license, except for cultivation dedicated to medical cannabis sold through a dispensary.

(b) Other than cultivation for a dispensary, the cultivator portion of an integrated license will be deemed to be in the largest cultivator tier that the Board has opened for an application acceptance period pursuant to Board Rules 1.3.1 and 1.10 and will be subject to the cultivation limit of that tier. The relevant maximum tier will be within the method of cultivation the integrated licensee has chosen to utilize in accordance with Board Rule 1.3.1.

(c) If an integrated licensee has chosen not to commingle their dispensary and adult use Cannabis cultivation, the dispensary grow will be regulated by Board Rule 3 while the adult use grow will be subject to subsection (b) of this rule 2.10.5.

(d) If an integrated licensee has chosen to commingle their dispensary and adult use Cannabis cultivation pursuant to section 2.10.3 of this rule, the cultivation will be subject to subsection (b) of this rule 2.10.5, with the following exception:

i. The total biomass of Cannabis required to meet the demand for medical Cannabis and Cannabis Products as indicated by dispensary sales data for the preceding 3 months will not be counted towards the total permissible square footage. If the total biomass set aside for medical Cannabis and Cannabis Products is ultimately not needed for that purpose, it may not be transferred to the adult-use market.

(e) The Board at its discretion may require integrated licensees to provide the Board with any records that might demonstrate compliance or noncompliance with this section, including sales and manufacturing data.

Section 2.11 Licensee's Ongoing Duty to Disclose.

A Cannabis Establishment has an ongoing duty to fully and transparently update the information submitted with their licensing application or their last renewal form if they have renewed their license.

2.11.1 Disclosure Insufficient for Changes in Control

If a Cannabis Establishment seeks to change location or alter the interest holders that control it, mere disclosure may be insufficient to meet its obligations under this rule. It must seek a license renewal prior to any change in control, to the extent required by Board Rule 1.17.

Section 2.12 Waiver Provisions for Tier 1 Cultivators.

Tier 1 indoor cultivators, tier 1 outdoor cultivators, and tier 1 mixed cultivators are not required to comply with the requirements of the following subsections of this rule:

(a) 2.2.1(l);

(b) 2.2.4(a);

(d) 2.2.4(c);

(e) 2.2.5(b)(i);

(f) 2.2.5(b)(v);

(g) 2.2.7(j);

(h) 2.3.2(g);

(i) 2.5.3, provided that only home occupancy businesses are exempted from the provisions of this section;

(j) 2.5.6(b); and

(k) 2.5.6(c).

Section 2.13 Universal Application of Licensure Requirements.

No person may operate in a manner that has the effect of subverting 7 V.S.A. § 901(d)(3)(A) or any other licensure requirements contained in 7 V.S.A. chapter 33 or Board Rule 1, and no person shall exercise control over a Cannabis Establishment without the disclosures required in Board Rule 1.4. At its discretion the Board may require additional information from Cannabis Establishments to ensure compliance with this section.

Section 2.14 Municipalities.

Municipalities may regulate Cannabis Establishments to the extent permitted in 7 V.S.A. § 863.

To ensure coordination with the Board, municipalities must:

(a) Notify the Board if they create a local control commission. The Board will not require local approval as a condition of an application pursuant to 7 V.S.A. § 863(c) unless the Board has received notice of the creation of a local control commission from the municipality.

(b) Notify the Board if a local control commission grants or denies a local control license.

(d) Decide on grants or denials of local control licenses within 45 days of receiving an application. A delay of more than 45 days without a decision will constitute a presumptive grant of a local control license. This period may be tolled if the local control commission is communicating with the applicant about conditions the applicant must meet to be approved for a local control license. The Board will retain discretion to determine whether the time-period will be tolled and may request documentation regarding the process from either the municipality or the applicant, or both.

Section 2.15 Confidentiality.

Information about Cannabis Establishments will be kept confidential by the Board to the extent required by 7 V.S.A. § 901a.

Section 2.16 Regulatory Waiver.

The Board, in accordance with the purposes and intent of Title 7 V.S.A. chapter 33 of the Vermont Statutes and this rule, may waive a regulatory requirement regarding the operations of a Cannabis Establishment to the extent such waiver does not conflict with any other state law, if in the Board's determination, such a waiver:

(a) is necessary to achieve the purpose of Vermont law; and

(b) does not create a danger to the public health, safety, or welfare.

Section 2.17 Synthetic and Hemp-derived Cannabinoids.

Pursuant to the Board's authority to regulate synthetic cannabinoids and hemp-derived cannabinoids, including delta-8 and delta-10 tetrahydrocannabinol, the production, manufacture, marketing, transfer, and sale of hemp-derived intoxicating cannabinoids and synthetic cannabinoids are hereby prohibited, except as set out in subsection 2.17.3.

2.17.1 Prohibition

Prohibited cannabinoids include:

(a) All isomers, variants, analogs, and mimetics of delta-9 tetrahydrocannabinol, including delta-8 and delta-10 tetrahydrocannabinol, created by chemical manipulation of any part or derivative of the plant Cannabis sativa L., regardless of the delta-9 tetrahydrocannabinol concentration level of the source plant or plants; and

(b) delta-9 tetrahydrocannabinol that has been chemically or mechanically concentrated or otherwise derived from hemp and then sprayed, infused, or otherwise artificially introduced onto or into any product, including hemp or hemp products, so as to impart intoxicating properties mimicking those of cannabis and cannabis products.

2.17.2 Presumptions

A consumable product that is not cannabis or a cannabis product is presumptively prohibited regardless of the delta-9 tetrahydrocannabinol concentration of any plant from which the product is sourced, if the product, in the form offered to consumers:

(a) contains total tetrahydrocannabinol in a concentration exceeding 0.3 percent on a dry weight basis; or

(b) contains more than 1.5 mg tetrahydrocannabinol per serving, where "serving" is the amount reasonably ingested by a typical consumer in a single instance; or

(c) contains more than 10 mg total tetrahydrocannabinol per package, unless the ratio of cannabidiol to tetrahydrocannabinol is at least 20:1; or

(d) has the dominant market appeal of mimicking the intoxicating effects of tetrahydrocannabinol.

2.17.3 Exceptions

The prohibition in this section shall not apply to:

(a) a product duly evaluated, registered, regulated by the Board, and taxed as a cannabis product;

(b) an otherwise-prohibited cannabinoid-containing product that has been specifically authorized by the Board for sale at a licensed medical dispensary based upon a finding, pursuant to 7 V.S.A. § 971(b)(6), that the product is appropriate for use by a patient; or

(c) manufactured pharmaceutical drugs approved by the United States Food & Drug Administration for therapeutic use upon the prescription of a medical provider, to include Epidiolex, Marinol, Syndros, Cesamet, and Sativex; or

(d) a product that is prohibited by this rule, 2.17, solely because its delta-9 tetrahydrocannabinol content exceeds serving or package limits and not for any other reason, provided the product is produced and transferred exclusively for export by lawful means to a state where the product lawfully may be sold to consumers.

History

EFFECTIVE DATE:
March 29, 2022 Secretary of State Rule Log #22-009
AMENDED:
10/21/2023 Secretary of State Rule Log #23-031
STATUTORY AUTHORITY: 7 V.S.A. § 843(b)(1)

Chapter 003 RULE 3: MEDICAL CANNABIS

25-003 Code Vt. R. 25-000-003-X RULE 3: MEDICAL CANNABIS

Section 3.1 General Provisions.

3.1.1 Authority

The Cannabis Control Board adopts this rule pursuant to 7 V.S.A. §§ 901, 953, 954, 956, 971, 974, 975, 976, 978, and other applicable law.

3.1.2 Scope and Purpose

The Board is charged with implementing and regulating a legal market for Cannabis in Vermont. This rule regulates the Patient and Caregiver Registry, as well cannabis dispensaries.

3.1.3 Definitions

All definitions in 7 V.S.A. §§ 861 and 951 shall apply to this rule. The following definitions shall also apply:

(a) "Board designee" means a person designated by the Board to act as its agent for the purpose of executing the Board's responsibilities. This may be an employee of the Board, another government agency, or a contractor.

(b) "Caregiver" means a resident of Vermont who has been issued a Caregiver registration card by the Board, identifying the person as someone who has agreed to undertake responsibility for managing the well-being of a Patient with respect to the use of Cannabis or Cannabis Products for symptom relief.

(c) "Inventory Tracking System" means a method implemented by the Board for tracing all Cannabis and Cannabis Products grown, manufactured, and sold in Vermont.

(d) "Licensee" means a person who has been issued a license pursuant to Board Rule 1 or this rule. A licensee does not include a person who has been issued a provisional license.

(e) "Patient" means a resident of Vermont who has been issued a Patient registration card by the Board, identifying the person as having a qualifying medical condition pursuant to the provisions of this rule.

(f) "Pesticide" shall have the same meaning as "economic poison" as defined in 6 V.S.A. § 911(5).

(g) "Physical site of operations" means:

i. a cultivator's grow site;

ii. a wholesaler's product storage facility;

iii a manufacturer's site of manufacture;

iv. a retailer s store location; or

v. a testing laboratory's testing facility.

(h) "Resident of Vermont" means a person who is domiciled in Vermont.

3.1.4 Applicability

This rule applies to persons who seek to become Patients or Caregivers, who are Patients or Caregivers, who seek to operate a dispensary, or who operate a dispensary pursuant to 7 V.S.A. chapters 37 and 39.

3.1.5 Time

(a) In computing any time period, measured in days, that is established or allowed by this rule or by order of the Board or Chair:

i. the day of the act or event that triggers the period shall be excluded;

ii. every day, including intermediate Saturdays, Sundays, and legal holidays shall be counted;

iii. the last day of the period shall be counted, but if the last day is a Saturday, Sunday, or legal holiday, the period continues to run until the end of the next day that is not a Saturday, Sunday, or legal holiday.

(b) A "legal holiday" means:

i. any day declared a holiday by the President or Congress of the United States; and

ii. any day declared a holiday by the State of Vermont.

3.1.6 Severability

If any portion of this rule is found to be invalid, the remaining portion of the rule shall remain in force and effect.

Section 3.2 Registration of Patients.

3.2.1 Forms and Fees

Individuals applying to register as a Patient are required to submit an application in a format determined by the Board. The Board will make the application form readily accessible to the public. Applicants may have to pay a fee in accordance with a fee schedule that the Board will make readily accessible to the public.

3.2.2 Patient Application

The Patient application shall require the following information:

(a) Name, address, phone number, email if available, and date of birth;

(b) A valid Vermont driver's license or non-driver identification number if the individual has such documentation. The Board will review alternative documentation demonstrating residency on a case-by-case basis for individuals without such documentation;

(c) Name, address, phone number, email if available, and date of birth of a person the Patient is requesting serve as his or her Caregiver pursuant to section 3.3 of this rule, if applicable;

(d) A Health Care Professional Verification Form, as provided for by section 3.2.3 of this rule;

(e) A recent electronic photograph; and

(f) An attestation that all information provided in the application is truthful, provided that if an individual is under 18 the attestation must be signed by a parent or legal guardian.

3.2.3 Health Care Professional Verification Form

The Board will make Health Care Professional Verification Forms available in a format readily accessible to the public. The Health Care Professional Verification Form must contain the following:

(a) A statement by a health care professional that the Patient has a qualifying medical condition, as defined in 7 V.S.A. § 951(8), including the specific disease or condition which the Patient has;

(b) A signed certification which provides in substantial part: "I certify that I meet the definition of a "health care professional" as defined by 7 V.S.A. § 951(5), that I am a health care professional in good standing in the state of ..... and that the facts that I stated on the form are accurate to the best of my knowledge and belief";

(c) The date upon which the health care professional signed the certification, which shall be no older than 6 months prior to the submission of the application submitted pursuant to section 3.2.2 of this rule;

(d) The health care professional's contact information, certification or license number, professional classification, and issuing state of professional certification or license;

(e) A statement by the Patient that the Patient is undergoing psychotherapy or counseling to the extent required by 7 V.S.A. § 951(8)(B); and

(f) A release of information signed by the Patient applicant authorizing the Board to verify and confirm the accuracy of the information contained within the Health Care Professional Verification Form.

3.2.4 Patient Registration and Issuance of a Registered Patient Identification Card

(a) The Board shall register as Patients all individuals who are residents of Vermont and who submit a complete and truthful application pursuant to section 3.2.2 of this rule.

(b) Patients will be entitled to the privileges accorded to them in 7 V.S.A. chapter 35 and must comply with the requirements of that chapter and this rule.

3.2.5 Renewal of Patient Registration and Patient Identification Card

(a) Patient registrations shall be valid for the time period set by 7 V.S.A. § 955.

(b) Patients must submit a renewal form, which shall be created by the Board and readily available to the public, that:

i. updates any information that was provided in their original application or their previous renewal application to the extent the information has changed; and

ii. contains a new Health Care Professional Verification Form with a certification that is dated less than 6 months prior to the submission of the renewal application, provided that the Health Care Professional Verification Form and electronic photo will only be required every second renewal application;

(c) Patients who do not submit renewal forms prior to the expiration of their registration must apply in accordance with section 3.2.2 of this rule.

(d) Patients who submit renewal forms prior to the expiration of their registration but who do not get a response from the Board prior to the expiration date shall retain their prior registration until such time as the Board grants or denies their renewal.

3.2.6 Patient Renewals for Registrations Pursuant to 18 V.S.A. chapter 86

(a) On the date that this rule takes effect, individuals who have valid Patient registrations pursuant to the rules set forth by the Department of Public Safety under 18 V.S.A. Chapter 86 shall be deemed to have valid Patient registrations under this rule until such time as those registrations would have expired under the Department of Public Safety's rules.

(b) Such Patients may renew their registrations by submitting a renewal form to the Board pursuant to section 3.2.5 of this rule, provided that the information they will be required to update will be limited to the information requested in section 3.2.2 of this rule.

Section 3.3 Registration of Caregivers.

3.3.1 Forms and Fees

Individuals applying to register as a Caregiver are required to submit an application in a format determined by the Board. The Board will make the application form readily accessible to the public. Applicants may have to pay a fee in accordance with a fee schedule that the Board will make readily accessible to the public.

3.3.2 Caregiver Application

The Caregiver application shall require the following information:

(a) Name, address, phone number, email if available, and date of birth;

(b) Name, address, phone number, email if available, and date of birth of a Patient whom the Caregiver will serve;

(c) A valid Vermont driver's license or non-driver identification number if the individual has such documentation. The Board will review alternative documentation demonstrating residency on a case-by-case basis for individuals without such documentation;

(d) any authorization or disclosure deemed necessary by the Board for the purpose of conducting a background check;

(e) A recent electronic photograph of the individual;

(f) An attestation that all information provided in the application is truthful.

3.3.3 Criminal History Records

To become registered Caregivers, individuals must be deemed qualified in accordance with the standards regarding criminal history records in section 1.11 of Board Rule 1, provided that if a spouse, domestic partner (as defined in 17 V.S.A. § 2414(e)(1)), child, legal guardian, parent, sibling, grandparent, or grandchild of a Patient seeks to be their Caregiver the Board may, at its discretion, temporarily register the Caregiver pending the completion of criminal history check.

3.3.4 Caregiver Registration and Issuance of a Registered Caregiver Identification Card

(a) The Board shall register as a Caregiver an individual who meets the following requirements:

i. Is a resident of Vermont;

ii. Is 21 years of age or older;

iii. Submits a complete and truthful application pursuant to section 3.3.2 of this rule; and

iv. Meets the criminal history record qualification standards to the extent required by section 3.3.3 of this rule.

(b) Caregivers will be entitled to the privileges accorded to them in 7 V.S.A. chapter 35 of the Vermont Statutes and must comply with the requirements of that chapter and this rule.

3.3.5 Renewal of Caregiver Registration and Caregiver Identification Card

(a) Caregiver registrations shall be valid for the time period set by 7 V.S.A. § 955.

(b) Caregivers must submit a renewal form, which shall be created by the Board and readily available to the public, that:

i. updates any information that was provided in their original application or their previous renewal application to the extent the information has changed; and

ii. provides for an updated background check.

(b) Caregivers who do not submit renewal forms prior to the expiration of their registration must apply in accordance with section 3.3.2 of this rule.

(c) Caregivers who submit renewal forms prior to the expiration of their registration but who do not get a response from the Board prior to the expiration date shall retain their prior registration until such time as the Board grants or denies their renewal.

3.3.6 Caregiver Renewals for Registrations Pursuant to 18 V.S.A. chapter 86

(a) On the date that this rule takes effect, individuals who have valid Caregiver registrations pursuant to the rules set forth by the Department of Public Safety under 18 V.S.A. Chapter 86 shall be deemed to have valid Caregiver registrations under this rule until such time as those registrations would have expired under the Department of Public Safety's rules.

(b) Such Caregivers may renew their registrations by submitting a renewal form to the Board pursuant to section 3.3.5 of this rule, provided that the information they will be required to update will be limited to the information requested in section 3.3.2 of this rule.

Section 3.4 Licensing of Dispensaries.

3.4.1 Forms and Fees

A person or persons applying for a dispensary license are required to submit an application in a format determined by the Board. The Board will make the application form readily accessible to the public. Applicants may have to pay a fee in accordance with a fee schedule that the Board will make readily accessible to the public.

3.4.2 General Licensing Requirements

(a) The license application and renewal provisions of Board Rule 1 shall apply to any person or persons seeking to obtain or renew a license to operate a dispensary, subject to applicable provisions in section 3.4.3 of this rule.

(c) Sections 1.4 through 1.9 of Board Rule 1 are each applicable to a dispensary application or renewal, except as provided by subsection 3.4.3(d) of this rule.

(d) Dispensary licenses are valid for one year from the date of issue.

When applying Rule 1 to a person or persons applying to operate a dispensary:

(e) "Cannabis Establishment" shall mean a dispensary;

(f) "Applicant" shall mean a dispensary applicant;

(g) "Licensee" shall mean a person or persons who have been licensed to operate a dispensary;

(h) Fees will be understood to reference those required by 7 V.S.A. chapter 37; and

(i) Where Board Rule 1 requires compliance with applicable statutes, such references shall be understood to mean compliance with 7 V.S.A. chapter 37.

3.4.3 Departures from Board Rule 1 for Dispensary Licensing

(a) Dispensary applicants must submit plans to ensure Patient privacy and confidentiality.

(b) Dispensary applicants must submit plans to educate their employees who interact with Patients about the probable effects of the Cannabis and Cannabis Products available for Patient purchase.

(c) Dispensary applicants must submit plans to provide educational materials to Patients and, if applicable, their Caregivers.

(d) A dispensary applicant may declare on their application that their dispensary operation will not perform one or more of the activities permitted in 7 V.S.A. § 973(a)(1) or (2). To the extent that such a declaration would mean that the dispensary would not be performing the functions of one or more of the license types listed in sections 1.5 through 1.9 of Board Rule 1, the dispensary applicant need not fulfill the application requirements of the relevant section(s), provided that:

i. The Board shall retain discretion to determine whether application requirements must be fulfilled; and

ii. A dispensary applicant that makes such a declaration will not be permitted to perform the activity they declared they would not perform. If they wish to expand their operation to do so subsequent to gaining a license, they may do so only in accordance with a procedure to be set by the Board.

3.4.4 Dispensary Renewals for Licenses Granted Pursuant to 18 V.S.A. chapter 86

(a) On the date that this rule takes effect, dispensaries licensed pursuant to the rules set forth by the Department of Public Safety under 18 V.S.A. Chapter 86 shall be deemed to have valid dispensary licenses under this rule until such time as those licenses would have expired under the Department of Public Safety's rules, or until such time as a dispensary obtains an integrated license pursuant to Board Rule 1, whichever comes first.

(b) Dispensaries licensed pursuant to the rules set forth by the Department of Public Safety under 18 V.S.A. Chapter 86 that do not obtain an integrated license may renew their dispensary licenses by submitting a renewal in a form to be determined by the Board. This initial renewal under the Board's authority will be no more burdensome than necessary for the Board to ensure compliance with 7 V.S.A. chapter 37 and ensure the Board has the information required by Rule 1.4. After the initial renewal under this rule, the standard renewal rules under section 3.4.2 of this rule will apply.

3.4.5 Dispensary Identification Cards

Owners, principals, and employees of dispensaries will be issued Cannabis Establishment identification cards in accordance with Board Rule 1.16. This will constitute compliance with 7 V.S.A. § 976. For the purposes of this rule, a dispensary cardholder will mean an employee of a dispensary who has a current and valid Cannabis Establishment identification card.

Section 3.5 Regulation of Dispensaries.

3.5.1 General Regulatory Requirements

(a) Dispensaries may do everything permitted in 7 V.S.A. §§ 971 and 973 and must abide by the regulations of 7 V.S.A. chapter 37.

(b) Except where Board Rule 2 conflicts with 7 V.S.A. §§ 971 and 973 or the provisions of this section 3. 5, dispensaries shall be regulated in accordance with Board Rule 2.

(c) In accordance with 7 V.S.A. chapter 37, product restrictions in Board Rule 2 and 7 V.S.A. chapter 33 are not applicable to dispensaries.

(d) Each activity in a dispensary's operation, including but not limited to cultivation, manufacturing, and retail sales, will be regulated in accordance with the relevant section of Board Rule 2, subject to the exceptions in this section 3.5.

When applying Board Rule 2 to dispensary operations:

(e) "Cannabis Establishment" shall mean a dispensary;

(f) "Licensee " shall mean a person or persons who have been licensed to operate a dispensary; and

(g) Where Board Rule 2 requires compliance with applicable statutes, such references shall be understood to mean compliance with 7 V.S.A. chapter 37.

3.5.2 Transportation and Delivery

The provisions governing transportation of Cannabis and Cannabis Products contained in Board Rule 2 do not apply to dispensaries. The following rules govern transportation and delivery for dispensaries:

A registered dispensary electing to deliver to registered Patients and Caregivers, or transfer to another dispensary or a testing laboratory, shall:

(a) Transport Cannabis and Cannabis Products in a secure locked container.

(b) Only permit registered cannabis identification card holders in the vehicle.

(d) Ensure that dispensary personnel other than the personnel performing delivery services have knowledge of the delivery schedule.

(e) Depart with only the amount of Cannabis or Cannabis Product scheduled for delivery;

(f) Schedule deliveries to occur only during established operating hours.

(g) Verify the identity of each registered Patient or Caregiver at the time of his or her initial delivery and prior to dispensing Cannabis. Cannabis or Cannabis Product shall be transferred directly into the physical possession of the registered Patient or Caregiver.

(h) Prior to dispensing Cannabis or Cannabis Product to the registered Patient or Caregiver who scheduled a delivery, verify his or her registry identification card is valid.

(i) Ensure delivery vehicles are discreet and do not display advertising, cannabis-related insignia, or features indicative of dispensary operations.

(j) Ensure that all dispensary cardholders performing deliveries have a mode of communication for contacting emergency services personnel.

(k) Develop and implement policies and procedures to ensure employee safety and to provide security sufficient to prevent loss of inventory, theft, and diversion for the dispensing, delivery, and storage of Cannabis or Cannabis Product.

(l) Require all dispensary cardholders to physically possess their registry identification cards when performing delivery services.

(m) Retain documentation containing the following information for each delivery:

i. Registered Patient name and registry identification number. If a registered Caregiver accepts a delivery on behalf of his or her registered Patient the documentation shall additionally include the registered Caregiver's name and registry identification number;

ii. Name(s) and registry identification number(s) of the dispensary cardholder(s) performing delivery;

iii. Date and time of delivery; and

iv. Strain, form, and amount of Cannabis or Cannabis Product delivered. Amount of Cannabis or Cannabis Product shall be in ounce or gram units of weight.

(n) Generate a trip ticket for the transfer or transport of Cannabis or Cannabis Product between registered dispensary locations or to a registered Patient or Caregiver. A trip ticket will be provided to a registered Patient or his or her Caregiver and shall include the registered dispensary's name, product type, strain, weight in ounce or gram units, form, and time and date of transaction. A trip ticket when cannabis is transported by a registered dispensary to another registered dispensary or testing laboratory shall contain the originating and receiving dispensary or testing laboratory name and physical address, the weight and form of Cannabis and Cannabis Product, and relinquishing time and date.

3.5.3 Dispensary Visitors

The provisions governing visitors to Cannabis Establishments contained in Board Rule 2 do not apply to dispensaries. The following rules govern visitors to dispensaries, but not visitors to the cultivation area of a dispensary:

(a) Patients, Caregivers, and holders of cannabis establishment identification cards shall always have their identification cards on-site while at a registered dispensary.

(b) Dispensaries must make accommodation for Patient privacy upon request, including allowing Patients to purchase Cannabis or Cannabis Products inside the dispensary without compromising Patient privacy.

(c) A record shall be maintained of all individuals who purchase Cannabis or Cannabis Products from the dispensary, provided that when an integrated licensee operates a dispensary location that also serves as an adult use retail location, records related to adult use consumers shall not violate the provisions of Rule 2.8.3. The record shall contain first and last legal name of all individuals, time, date, and registry identification number.

(d) A licensed dispensary shall limit access to Patients and Caregivers, except for the situations listed in this subsection (d). In these situations, the record shall contain entity affiliation and purpose of entry and may omit a registry identification number:

i. A contractor or vendor, or the owner of the property on which a dispensary is located, who is performing services related to the operation of a dispensary and who needs access to the registered dispensary may be allowed access for a limited time under the direct accompaniment of a registered dispensary cardholder.

ii. A government employee who, in the performance of his or her job duties requires access to the registered dispensary shall be allowed access for a limited time under the direct accompaniment of a registered dispensary cardholder.

iii. Emergency services personnel, such as firefighters, police officers or other officials, who in the performance of their life safety duties require access to the registered dispensary in an emergency life safety or protection situation may enter a registered dispensary without escort in order to perform his or her job.

iv. A health care professional as defined by 7 V.S.A. § 951(5) may be allowed access under the direct accompaniment of a dispensary cardholder.

The following rules govern visitors to the cultivation or processing area of a dispensary:

(e) Only dispensary cardholders may access a licensed dispensary cultivation or processing location, except in one (or more) of the circumstances set out in subsection 3.5.3(d) of this section.

(f) Licensed dispensaries conducting dispensing appointments in the same facility as cultivation and/or processing shall secure the cultivation and/or processing area(s) from the dispensing area of the facility with a lock or other security device in addition to all other security measures required by these rules.

3.5.4 Dispensary Security

(a) The provisions governing security at Cannabis Establishments contained in Board Rule 2 apply to dispensaries.

(b) Each activity that a dispensary engages in, including but not limited to cultivation, manufacturing, production, and sales, must abide by the relevant security requirements contained in Board Rule 2.

3.5.5 Quantity Limits

(a) In a single transaction, dispensaries may provide no more Cannabis than a patient is permitted to possess in accordance with any limit set by 7 V.S.A. § 952, no more than the equivalent in Cannabis Products, or no more than the permitted limit in a combination of Cannabis and the equivalent in Cannabis Product.

(b) Non-edible, non-psychoactive Cannabis Products including ointments, lotions, balms, and other non-transdermal topical products are exempt from the two-ounce quantity limit on sales.

(c) Equivalencies referenced in subsection (a) of this section 3.5.5 shall be provided by guidelines promulgated by the Board and readily accessible to the public.

3.5.6 Transfer or Sale to Adult Use Market Prohibited

Dispensaries and the dispensary operations of integrated licensees may not sell or transfer Cannabis or Cannabis Product to any person or licensee participating in the adult use market, except that the dispensary operations of integrated licensees may make such transfers to the extent permitted by Rule 2.10.5.

Section 3.6 Integrated Licensees.

(a) If an integrated licensee is operating a dispensary, any portion of the licensee's operations that are servicing both the adult use market and the dispensary will be required to follow all relevant regulations in Board Rule 2, with the following exceptions:

i. At a retail operation both medical regulations and adult use regulations will apply in accordance with Rule 2.10 and this rule; and

ii. In accordance with 7 V.S.A. §§ 971 and 973, integrated licensees that also operate a dispensary may produce and sell Cannabis and Cannabis Product in accordance with those statutes and this rule only to the extent required to serve Patients as part of the licensee's dispensary operation.

(b) Integrated licensees with dispensary retail operations shall make accommodation for Patient privacy at a retail establishment upon request, including allowing Patients to purchase Cannabis or Cannabis Products inside the retail establishment without compromising Patient privacy.

Section 3.7 Deregistration of Patients or Caregivers.

(a) A health care professional who signed the certification on a Health Care Professional Verification Form may withdraw their certification at any time by submitting to the Board a signed statement to that effect. This shall have the effect of canceling a Patient's registration. A Patient who has been deregistered in this manner may submit an application to the Board pursuant to section 3.2.2 of this rule at any time, provided that the Patient must submit a new and timely Health Care Professional Verification Form.

(b) A Patient who stops using the services of a Caregiver may submit a notice to that effect to the Board. If a Caregiver is no longer serving any Patient due to such a cessation of services or due to a Patient's death, the Caregiver's registration shall expire 90 days after the cessation or death.

Section 3.8 Patient's and Caregiver's Ongoing Duty to Disclose.

Patients and Caregivers have an ongoing duty to fully and transparently update the information submitted with their registration application or their last renewal form if they have renewed their registration.

Section 3.9 Dispensary's Ongoing Duty to Disclose.

A dispensary has an ongoing duty to fully and transparently update the information submitted with their licensing application or their last renewal form if they have renewed their license.

3.9.1 Disclosure Insufficient For Changes In Control

If a dispensary seeks to alter the interest holders that control it, mere disclosure is insufficient to meet its obligations under this rule. It must seek a license renewal prior to any change in control, as required by Rule 1.17.

Section 3.10 Confidentiality.

The Board will abide by the confidentiality requirements of 7 V.S.A. § 952(c) and 7 V.S.A. § 973(b).

Section 3.11 Regulatory Waiver.

The Board, in accordance with the purposes and intent of 7 V.S.A. chapter 37 and this rule, may waive a regulatory requirement regarding the operations of a dispensary or the Patient and Caregiver Registry to the extent such waiver does not conflict with any other state law, if in the Board's determination, such a waiver:

(a) is necessary to achieve the purpose of Vermont law; and

(b) does not create a danger to the public health, safety, or welfare.

History

EFFECTIVE DATE:
4/19/2022 Secretary of State Rule Log #22-014
STATUTORY AUTHORITY: 7 V.S.A. § 952(c) and 7 V.S.A. § 973(b)

Chapter 004 RULE 4: COMPLIANCE AND ENFORCEMENT

25-004 Code Vt. R. 25-000-004-X RULE 4: COMPLIANCE AND ENFORCEMENT

Section 4.1 General Provisions.

4.1.1 Authority

The Cannabis Control Board adopts this rule pursuant to 7 V.S.A. §§ 863, 864, 881, 882, 32 V.S.A. §7906, and other applicable law.

4.1.2 Scope and Purpose

The Board is charged with implementing and regulating a legal market for Cannabis in Vermont. This rule provides for enforcing compliance with the Board's rules.

4.1.3 Definitions

All definitions in 7 V.S.A. §§ 861 and 951 shall apply to this rule. The following definitions shall also apply:

(a) "Administrative penalty" means a monetary fine.

(b) "Board designee" means a person designated by the Board to act as its agent for the purpose of executing the Board's responsibilities. This may be an employee of the Board or of another government agency.

I "Caregiver" means a resident of Vermont who has been issued a Caregiver registration card by the Board, identifying the person as someone who has agreed to undertake responsibility for managing the well-being of a Patient with respect to the use of Cannabis or Cannabis Products for symptom relief.

(d) "Corrective action plan" means a required set of actions imposed by the Board upon a Cannabis Establishment or dispensary for the purpose of curing a violation of Board Rules or of 7 V.S.A. chapter 33, 35, 37, or 39.

(e) "Inventory Tracking System" means a method implemented by the Board for tracing all Cannabis and Cannabis Products grown, manufactured, and sold in Vermont.

(f) "Licensee" means a person who has been issued a license pursuant to Board Rule 1 or Board Rule 3. A licensee does not include a person who has been issued a provisional license.

(g) "Notice of Violation" means a document in which the Board informs a licensee or a person engaged in the transfer or sale of Cannabis or Cannabis Product that they are the subject of an enforcement action by the Board and includes such other information as required by this rule.

(h) "Patient" means a resident of Vermont who has been issued a registration card by the Board, identifying the person as having a qualifying medical condition pursuant to the provisions of this rule.

(i) "Pesticide" shall have the same meaning as "economic poison" as defined in 6 V.S.A. § 911(5).

(j) "Physical site of operations" means:

i. a cultivator's grow site,

ii. a wholesaler's product storage facility,

iii. a manufacturer's site of manufacture,

iv. a retailer's store location, or

v. a testing laboratory's testing facility.

4.1.4 Applicability

This rule applies to persons who engage in the sale or transfer of Cannabis or Cannabis Products, including sales or transfers related to cultivating, manufacturing, wholesaling, or retailing Cannabis or Cannabis Products. This rule also applies to those who provide testing services to persons who engage in the sale or transfer of Cannabis or Cannabis Products.

4.1.5 Time

(a) In computing any time period, measured in days, that is established or allowed by this rule or by order of the Board or Chair:

(1) the day of the act or event that triggers the period shall be excluded;

(2) every day, including intermediate Saturdays, Sundays, and legal holidays shall be counted;

(b) A "legal holiday" means:

(1) any day declared a holiday by the President or Congress of the United States; and

(2) any day declared a holiday by the State of Vermont.

Section 4.2 Complaints and Investigations.

4.2.1 Investigations

The Board shall be empowered to conduct investigations of all persons who engage in the sale or transfer of Cannabis or Cannabis Products to ensure compliance with Board rules or of 7 V.S.A. chapter 33, 35, 37, or 39. The Board shall further be empowered to conduct investigations of those who provide testing services to persons who engage in the sale or transfer of Cannabis or Cannabis Products. Such investigations may include undercover investigations. Investigations shall be carried out by Board designees.

4.2.2 Complaints

The Board may accept complaints from any person regarding compliance with these rules, provided that a complaint without further corroboration will not comprise the basis for disciplinary action by the Board. Anyone may file a complaint in a manner determined by the Board and made readily available to the public. Complainants do not have a right to receive updates on disciplinary actions.

Section 4.3 Duty to Cooperate.

4.3.1 General Duty

Licensees and Cannabis Establishment identification card holders shall cooperate with the Board and Board designees who are conducting investigations relevant to the enforcement of the Board's rules and related law.

4.3.2 Cooperation with Inspections

Licensees and Cannabis Establishment identification card holders shall cooperate with the Board and Board designees who are conducting inspections and shall give the Board and Board designees immediate access to facilities and records upon request, including access to their physical site of operations.

Section 4.4 Violations and Penalties.

4.4.1 Violations Generally

Any violation may be subject to an enforcement action by the Board. The Board will assess the penalty and the severity of the penalty as provided in this rule.

4.4.2 Penalties

One or more of the following penalties may be imposed for a violation in accordance with the categories defined in section 4.5 of this rule:

(a) Requirement to produce or comply with a corrective action plan.

(b) Administrative penalty.

(d) Revocation of a license or Cannabis Establishment identification card.

Section 4.5 Categories of Violations and Associated Penalties.

The Board will levy administrative penalties and other penalties in accordance with the following categories, provided that the maximum administrative penalties for violations associated with the operations of tier I cultivators and tier I manufacturers shall be half the amount provided for in the categories.

To the extent a violation is not listed in this section the Board shall have discretion to assign the violation to an appropriate category and issue a penalty accordingly.

4.5.1 Category I Violations and Penalties

Category I violations are of a severity that could make a person ineligible to receive, renew, or maintain a license or Cannabis Establishment identification card and include:

(a) Operating without all required permits, Board approvals, certificates, registrations and/or licenses;

(b) Making an intentionally false statement to the Board or a Board designee;

(d) Failure to abide by a corrective action plan;

(e) Failure to pay taxes to the Department of Taxes;

(f) Knowingly permitting unlawful activity on the premises of a Cannabis Establishment or dispensary, or during transportation of Cannabis or Cannabis Product, that results in death or serious physical injury;

(g) Operating a Cannabis Establishment or dispensary while the license for the Cannabis Establishment or dispensary is suspended or revoked;

(h) Attempting to change control of a licensee without prior approval of the Board in accordance with Rule 1.17;

(i) Transporting Cannabis or Cannabis Product outside of the boundaries of this State;

(j) Making verbal or physical threats to the Board or a Board designee;

(k) Refusing to allow an inspection or obstructing a Board designee from performing his or her official duties;

(l) Purchasing, selling, or transferring Cannabis or Cannabis Product that has not passed the required analysis by an independent testing laboratory;

(m) Labeling Cannabis or Cannabis Products with potency limits that do not match independent laboratory test results;

(n) Purchasing, manufacturing, selling or otherwise utilizing Cannabis or Cannabis Products from a source that is not a licensed Cannabis Establishment or dispensary;

(o) Purchasing, manufacturing, selling or otherwise utilizing Cannabis or Cannabis Products from a Cannabis Establishment or dispensary whose license has been suspended or revoked;

(p) Purchasing or selling Cannabis or Cannabis Product not found in the Inventory Tracking System;

(q) Failure to properly collect taxes;

(r) Transporting or storing Cannabis or Cannabis Product from an unlicensed source or diversion of Cannabis or Cannabis Products; or

(s) Intentionally selling or transferring unauthorized or unlawful Cannabis Products.

Before consideration of the factors described in section 4.7 of this rule, the Board will presume that the following are appropriate penalties for Category I violations. In no event shall a Category I penalty be greater than those permitted in this section.

For a category I violation which is the:

(t) First violation in the immediately preceding 3 years, a corrective action plan, an administrative penalty of not more than $ 20,000, a suspension of a license or Cannabis Establishment identification card for not more than 60 days, and/or revocation of a license or Cannabis Establishment identification card.

(u) Second or subsequent violation in the immediately preceding 3 years, a corrective action plan, a suspension of license or Cannabis Establishment identification card for a length of time to be determined by the Board, and/or revocation of a license or Cannabis Establishment identification card.

4.5.2 Category II Violations and Penalties

Category II violations are violations of a severity that create a threat to public health or safety and include:

(a) Making an unintentional false statement or representation of fact to the Board or Board designee;

(b) Unintentionally destroying or concealing evidence of a violation;

(c) Failing to verify the age of, or selling or otherwise providing Cannabis or Cannabis Products to, a person who is less than 21 years, provided that patients with registry cards may purchase Cannabis or Cannabis Products at dispensary retail operations in accordance with Board Rule 3 and 7 V.S.A. chapters 35 and 37;

(d) Allowing a person under 21 years of age to enter a transport vehicle or a building or enclosure on the premises of a Cannabis Establishment where Cannabis or Cannabis Product is located, provided that Patients with registry cards may enter dispensary retail operations in accordance with Board Rule 3 and 7 V.S.A. chapters 35 and 37;

(e) Permitting employment or otherwise accepting work by a person without a Cannabis Establishment identification card or temporary work permit;

(f) Allowing a person who is less than 21 years of age to work at a Cannabis Establishment or dispensary;

(g) Failure to separate medical Cannabis or Cannabis Product sales from adult use retail sales;

(h) Unlawful transfer of Cannabis or Cannabis Product from a dispensary into the adult use market;

(i) Selling or transferring Cannabis or Cannabis Product in excess of transaction limits;

(j) Failing to maintain required security systems;

(k) Any intentional variance from approved procedures in a testing laboratory;

(l) Failing to notify the Board of theft of Cannabis or Cannabis Products as required by Rule 2.2.17;

(m) Using unauthorized pesticides, soil amendments, fertilizers or other crop production aids;

(n) Transferring, moving, or disturbing Cannabis or Cannabis Product which has been placed on stop sale or quarantined by the Board without Board approval; or

(o) Failing to destroy, selling, or transferring Cannabis or Cannabis Product that has been ordered destroyed by the Board, or that has been adulterated or contaminated without successful remediation;

(p) Selling or transferring unauthorized or unlawful Cannabis Products;

(q) Altering, manipulating, or falsifying a certificate of analysis;

(r) Failing to report lost, stolen, or adulterated cannabis or cannabis products; or

(s) Failing to abide by Cannabis and Cannabis Product testing requirements.

Before consideration of the factors described in section 4.7 of this rule, the Board will presume that the following are appropriate penalties for Category II violations. In no event shall a Category II penalty be greater than those permitted in this section.

For a category II violation which is the:

(t) First violation in the immediately preceding 3 years, a corrective action plan, an administrative penalty of not more than $ 15,000, and/or a suspension for not more than 20 days of a license or Cannabis Establishment identification card.

(u) Second violation in the immediately preceding 3 years, a corrective action plan, an administrative penalty of not more than $ 20,000, and/or a suspension for not more than 30 days of a license or Cannabis Establishment identification card.

(v) Third or subsequent violation in the immediately preceding 3 years, a corrective action plan, a suspension of license or cannabis establishment identification card for a length of time to be determined by the Board, and/or revocation of a license or Cannabis Establishment identification card.

4.5.3 Category III Violations and Penalties

Category III violations are violations of a severity that create a potential threat to public health or safety and include:

(a) Allowing consumption by any person of alcohol, Cannabis, or other intoxicants on the premises of the Cannabis Establishment or dispensary, or in areas adjacent to the premises of the Cannabis Establishment or dispensary that are under the licensee's control, except as authorized by the Board;

(b) Failing to keep any required records, including updating the Inventory Tracking System;

(d) Knowingly permitting any activity on the premises of the Cannabis Establishment or dispensary, or during the transport of Cannabis or Cannabis Products from the premises, that violates Vermont law and that the licensee or an employee has knowledge of;

(e) Selling or transferring unauthorized products or using unauthorized ingredients;

(f) Failing to notify the Board of a modification or expansion of the facilities of the Cannabis Establishment or dispensary;

(g) Violating packaging or labeling requirements, provided that the person or licensee who created the nonconforming label, and any retailer who allows the nonconforming label to be available for sale to a consumer, may both be liable for a violation under this subsection;

(h) Violating advertising laws or regulations;

(i) Storing or delivering Cannabis or Cannabis Products outside the Inventory Tracking System;

(j) Failing to meet requirements for the disposal of Cannabis or Cannabis Product waste;

(k) Violating restrictions on employee and vendor sampling;

(l) Exceeding maximum serving requirements for Cannabis or Cannabis Products;

(m) Failing to comply with requirements for employee hygiene;

(n) Failing to maintain a reasonably sanitary Cannabis Establishment or dispensary in line with industry standards or applicable regulations;

(o) Failing to maintain adequate food safety standards, where relevant;

(p) Selling or failing to dispose of Cannabis, Cannabis Products or food items that are spoiled;

(q) Failing to properly update the licensee's point of contact with the Board;

(r) Failure to maintain quality assurance/quality control program in a testing laboratory; or

(s) Failure to maintain current standard operating procedures, where relevant.

Before consideration of the factors described in section 4.7 of this rule, the Board will presume that the following are appropriate penalties for Category III violations. In no event shall a Category III penalty be greater than those permitted in this section.

For a category III violation which is the:

(t) First violation in the immediately preceding 3 years, a corrective action plan and/or an administrative penalty of not more than $ 10,000.

(u) Second violation in the immediately preceding 3 years, a corrective action plan, an administrative penalty of not more than $ 15,000, and/or a suspension for not more than 10 days of a license or Cannabis Establishment identification card.

(v) Third violation in the immediately preceding 3 years, a corrective action plan, an administrative penalty of not more than $ 20,000 and/or a suspension for not more than 20 days of a license or Cannabis Establishment identification card.

(w) Fourth or subsequent violation in the immediately preceding 3 years, a corrective action plan, an administrative penalty of not more than $ 20,000, a suspension of license or Cannabis Establishment identification card for a length of time to be determined by the Board, and/or a revocation of license or Cannabis Establishment identification card.

4.5.4 Category IV Violations and Penalties

Category IV violations create a climate which is conducive to abuses associated with the sale or production of Cannabis or Cannabis Products and include:

(a) Failing to have in the immediate possession of each Cannabis Establishment or dispensary employee, while on the premises of a Cannabis Establishment or dispensary, a Cannabis Establishment identification card or temporary work permit;

(b) Removing, altering or covering any required notice or sign;

(d) Failure to meet employee training and supervision requirements;

(e) Improper storage of Cannabis, Cannabis Products, or other foods;

(f) Failure to take reasonable steps to address pest infestations;

(g) Lack of compliance with the statutory and regulatory requirements for the operation of a Cannabis Establishment or dispensary in another jurisdiction;

(h) Violating Cannabis and Cannabis Product transportation regulations.

Before consideration of the factors described in section 4.7 of this rule, the Board will presume that the following are appropriate penalties for Category IV violations. In no event shall a Category IV penalty be greater than those permitted in this section.

For a category IV violation which is the:

(i) First violation in the immediately preceding 3 years, a corrective action plan and/or an administrative penalty of not more than $ 5,000.

(j) Second violation in the immediately preceding 3 years, a corrective action plan, an administrative penalty of not more than $ 10,000, and/or a suspension for not more than 10 days of a license or Cannabis Establishment identification card.

(k) Third violation in the immediately preceding 3 years, a corrective action plan, an administrative penalty of not more than $ 15,000, and/or a suspension for not more than 20 days of a license or Cannabis Establishment identification card.

(l) Fourth or subsequent violation in the immediately preceding 3 years, a corrective action plan, an administrative penalty of not more than $ 20,000, and/or a suspension for not more than 30 days of a license or Cannabis Establishment identification card.

4.5.5 Category V Violations and Penalties

Category V violations are inconsistent with the orderly regulation of the sale or production of Cannabis or Cannabis Products and include:

(a) Failing to notify the Board of any change in Cannabis Establishment or dispensary contact information;

(b) Making a payment with a check returned for insufficient funds;

(d) Failure to pay for costs involved in screening or testing related to required testing within 60 days.

Before consideration of the factors described in section 4.7 of this rule, the Board will presume that the following are appropriate penalties for Category V violations. In no event shall a Category V penalty be greater than those permitted in this section.

For a category V violation which is the:

(e) First violation in the immediately preceding 3 years, a corrective action plan and/or an administrative penalty of not more than $ 2,500.

(f) Second violation in the immediately preceding 3 years, a corrective action plan, an administrative penalty of not more than $ 5,000, and/or a suspension for not more than 5 days of a license or Cannabis Establishment identification card.

(g) Third violation in the immediately preceding 3 years, a corrective action plan, an administrative penalty of not more than $ 10,000, and/or a suspension for not more than 10 days of a license or Cannabis Establishment identification card.

(h) Fourth or subsequent violation in the immediately preceding 3 years, a corrective action plan, an administrative penalty of not more than $ 15,000, and/or a suspension for not more than 20 days of a license or Cannabis Establishment identification card.

Section 4.6 Health and Safety Orders.

4.6.1 Health and Safety Orders Generally

The Board may issue one or more of the following health and safety orders for a violation related to public health and safety.

These orders may be issued in addition to Rule 4.4.2 penalties.

(a) Stop-sale order.

(b) Quarantine of Cannabis or Cannabis Product.

(d) Cease and desist order.

4.6.2 Limitations on Health and Safety Orders

The Board may issue health and safety orders only when there is a threat or potential threat to health and safety.

4.6.3 Disposal, Quarantine, and Assignment of Costs

(a) Licensees who are required to destroy Cannabis or Cannabis Product must dispose of it in accordance with applicable regulations in Board Rule 2.

(b) The Cannabis Establishment or dispensary in possession of Cannabis or Cannabis Product that the Board orders destroyed or quarantined is responsible for the destruction or quarantine. The Board shall not be a tribunal for determining any potential assignment of costs among licensees for such destruction or quarantine.

Section 4.7 Mitigating and Aggravating Factors.

The Board may consider mitigating and aggravating factors when considering the severity of a penalty. Factors may include, but are not limited to:

(a) Any prior violations that the person has admitted to or was found to have engaged in.

(b) Whether the violation impacted public health and safety.

(d) Good faith measures by the person to prevent the violation, including but not limited to the following:

i. Proper supervision;

ii. Consistent and documented employee training; and

iii. Standard operating procedures established prior to the Board's investigation that include procedures directly addressing the conduct for which imposition of a penalty is being considered.

(e) Person's history of success or failure with compliance checks or prior corrective action plans.

(f) Corrective action(s) taken by the person related to the current violation or prior violations.

(g) Willfulness and deliberateness of the violation.

(h) Circumstances surrounding the violation.

(i) The size of the licensee or operation.

(j) The revenues of the licensee or operation.

(k) Person self-reporting the violation(s).

(l) Owner or management personnel is the violator or has directed an employee or other individual to violate these rules or the law.

Section 4.8 Issuance of a Notice of Violation.

4.8.1 Notice of Violation

If the Board finds that a person has violated any board rule or related law, the Board may issue a Notice of Violation.

4.8.2 Content of A Notice of Violation

A Notice of Violation shall contain the following:

(a) A concise statement of the nature of the violation.

(b) The factual basis for the violation.

(d) Health and safety orders, if necessary.

(e) Information about how to contest the violation, pay a waiver penalty if applicable, and submit a corrective action plan if applicable.

4.8.3 Waiver Amount

If the Board assesses an administrative penalty, the amount assessed on the Notice of Violation shall be the waiver amount. Paying the waiver amount will constitute acceptance of the Board's administrative penalty.

4.8.4 Sufficiency of Service

(a) The Board may accomplish service of a Notice of Violation in any of the following ways:

i. By delivering the notice using certified mail to a licensee's business address provided in accordance with Board Rule 1.

ii. By delivering the notice using certified mail to the registered agent of a licensee as recorded in the licensee's business registration with the Vermont Secretary of State.

iii. By delivering the notice using certified mail to a Cannabis Establishment identification card holder's address, as provided pursuant to Board Rule 1.16.3.

iv. By hand delivery to:

a Cannabis Establishment identification card holder;
a person who controls a licensee; or
a person acting in violation of Board rules or of 7 V.S.A. chapter 33, 35, 37, or 39.

(b) The Board shall also deliver a Notice of Violation by electronic mail provided pursuant to Board Rule 1, provided that this shall not constitute service unless a licensee chooses to accept service of a Notice of Violation by electronic mail.

Section 4.9 Process for Notices of Violation Without Immediate Effect.

Except as provided in section 4.10 of this rule, penalties imposed by a Notice of Violation will not take effect until the Board has rendered a final decision in accordance with the following process:

(a) Within 15 days after service of a Notice of Violation, a person may contest the violation and/or the penalty to the Board by filing a response in writing. The response must specifically identify each issue and fact in dispute and state the position of the person, the pertinent facts to be determined by the Board, and the reasons supporting the person's position.

(b) A failure to contest the violation within 15 days will constitute an admission of the violation and acceptance of the penalty.

(c) The Board shall consider the person's response and issue a final decision in writing within 15 days after receiving the person's response.

(d) A person who faces suspension or revocation of their license or Cannabis Establishment identification card may request a hearing before the Board. The hearing shall take place within 20 days of the Board receiving the request for a hearing unless the person waives the timeline. Evidence may be introduced at the hearing in accordance with 3 V.S.A. § 810. The Board may issue a final decision on the record at the hearing or may issue a final decision in writing within 15 days after the hearing is complete.

(e) To the extent a person is contesting whether a violation occurred, the Board may not find that a violation occurred unless such a finding is supported by a preponderance of the evidence.

(f) The Board's final decision may uphold its original Notice of Violation, may revise the penalty or penalties to be less severe, or may dismiss the Notice of Violation.

(g) A person who is aggrieved by the Board's final decision may appeal in accordance with 7 V.S.A. 847.

Section 4.10 Process for Notices of Violation with Immediate Effect.

Suspensions, revocations, or health and safety orders imposed by Notices of Violation will have immediate effect if they are accompanied by a written finding that the licensee's violation poses an imminent threat to public health, safety, or welfare.

If an administrative penalty or a requirement to produce a corrective action plan accompanies a penalty imposed with immediate effect, the administrative penalty or corrective action plan will not take effect until the conclusion of the process provided for in this section.

(a) The Board's initial Notice of Violation will plainly state that the penalty takes effect immediately. The Board will confirm the Notice of Violation and penalty within 7 days.

(b) Within 15 days of service of such a violation, a person may contest the violation and/or the penalty to the Board by filing a response in writing. The response must specifically identify each issue and fact in dispute and state the position of the person, the pertinent facts to be determined by the Board, and the reasons supporting the person's position.

(c) A failure to contest the violation within 15 days will constitute an admission of the violation and acceptance of the penalty.

(d) The Board shall consider the person's response and issue a final decision in writing within 10 days after receiving the licensee's response.

(e) A person who faces suspension or revocation of their license or Cannabis Establishment identification card may request a hearing before the Board. The hearing shall take place within 10 days of the Board receiving the request for a hearing unless the licensee waives the timeline. Evidence may be introduced at the hearing in accordance with 3 V.S.A. § 810. The Board may issue a final decision on the record at the hearing or may issue a final decision in writing within 10 days after the hearing is complete.

(f) To the extent a person is contesting whether a violation occurred, the Board may not find that a violation occurred unless such a finding is supported by a preponderance of the evidence.

(g) The Board's final decision may uphold its original Notice of Violation, may revise the penalty or penalties to be less severe, or may dismiss the Notice of Violation.

(h) A person who is aggrieved by the Board's final decision may appeal in accordance with 7 V.S.A. 847.

Section 4.11 Extensions and Consolidations.

(a) The Board may extend a deadline contained in section 4.9 or section 4.10 of this rule only for good cause. The Board must give written notice of the finding of good cause to the person who is the subject of the Notice of Violation prior to the expiration of the relevant deadline.

(b) The Board may consolidate decisions and hearings for multiple persons to the extent that the disputed issues in the Notices of Violations relate to substantially similar facts.

Section 4.12 Health and Safety Notices.

4.12.1 Purpose of a Health and Safety Notice

The Board may find that, even without finding a violation by a person or license holder, the Board must act to protect public health and safety.

4.12.2 Content of a Health and Safety Notice

If the Board finds that Cannabis or a Cannabis Product is or may be unsafe to the public, it may issue a Health and Safety Notice to any Cannabis Establishment and include within it a health and safety order, as provided for in section 4.6 of this rule.

The Health and Safety Notice will contain the following:

(a) The identity of the Cannabis or Cannabis Product at issue and a concise statement of the nature of the threat to public health.

(b) The factual basis for the threat to public health.

(d) Information about how to contest the Health and Safety Notice.

4.12.3 Process for a Health and Safety Notice

All Health and Safety Notices will have immediate effect. Licensees may contest the notice pursuant to the process established by section 4.10 of this rule.

Section 4.13 Administrative Appeals Process.

(a) Appeal to Appellate Officer. A party to a contested case may appeal a final decision of The Cannabis Control Board (Board) to an Appellate Officer by filing with the Executive Director of the Board a written notice of appeal within 30 days of the decision in accordance with 7 V.S.A. § 847. The notice of appeal shall include a statement of questions to be determined by the Appellate Officer. Thereafter, every time a party files a paper, they must send a copy to the other party. The Director shall assign the case to an Appellate Officer. Board staff shall prepare the record of the proceeding or decision and deliver it to the assigned Appellate Officer.

(b) Composition of record on appeal. The record on appeal shall consist of any original documents listed in 3 V.S.A. § 809(e), including exhibits, any transcript of the proceedings, if any, and any other relevant documents submitted by the appellant to the Board. The record shall be produced within 14 days of the notice of appeal unless good cause is shown for a delay.

(c) Transcript of the proceedings. Tape-recordings of any oral proceedings shall be sufficient for a transcript. If a stenographic record of the oral proceedings was made the Board shall file the transcript with the Appellate Officer.

(d) Appellate Prehearing Conference. In any appeal, upon 14 days' notice to the parties, the Appellate Officer may direct the parties to appear for a conference to consider simplification of the issues, possibility of settlement, and such other matters as may aid in disposition of the proceedings by the Appellate Officer.

(e) Briefs; Oral Argument. The appellant must submit a brief within 30 days after the date on the notice that the record is complete. The Board must file any responsive brief within 21 days after the appellant's brief is filed. Briefs shall not exceed 15 double-spaced pages. A case shall be deemed ripe for oral argument when the responsive brief is filed or when the time for filing the responsive brief has expired. Oral argument may be scheduled in advance of the filing of the responsive brief consistent with the requirements of this Rule. Each party will be allowed 15 minutes for oral argument.

(f) Taking Additional Evidence on Appeal. Upon motion and good cause shown, the Appellate Officer may schedule a hearing to take additional evidence on whether irregularities in procedure occurred that are not otherwise of record. The hearing on those irregularities is to be limited to those matters not of record. The Appellate Officer is not authorized to rehear substantive evidence that otherwise was or could have been raised before the hearing authority.

(g) Decision. The Appellate Officer shall issue a written decision within 45 days of final hearing affirming the order of the Board, or reversing and remanding with instructions to the hearing authority on requirements to conform the Board's order to the law.

(h) Further Appeal. An individual aggrieved by a decision of the Appellate Officer may appeal directly to the Supreme Court as authorized by 7 V.S.A. § 847(c) and in accordance with the Vermont Rules of Appellate Procedure.

Section 4.14 Letter of Warning.

The Board may issue a letter of warning to a person instead of a Notice of Violation or other order. Letters of warning will notify a person of a concern with their compliance or operating standards and will be a part of the person's record with the Board. No penalty will be associated with a letter of warning.

Section 4.15 Confidentiality.

The Board abide by the confidentiality requirements of 7 V.S.A. §§ 901a, 952(c), and 973(b).

History

EFFECTIVE DATE:
April 19, 2022 Secretary of State Rule Log #22-015
AMENDED:
10/21/2023 Secretary of State Rule Log #23-032
STATUTORY AUTHORITY: 7 V.S.A. § 843(b)(1), 7 V.S.A. §882

Vermont Code of Rules, Agency 25 — Cannabis Control Board

Subagency 000 GENERAL

Chapter 001 RULE 1: LICENSING OF CANNABIS ESTABLISHMENTS

25-001 Code Vt. R. 25-000-001-X RULE 1: LICENSING OF CANNABIS ESTABLISHMENTS

Chapter 002 RULE 2: REGULATION OF CANNABIS ESTABLISHMENTS

25-002 Code Vt. R. 25-000-002-X Rule 2: Regulation of Cannabis Establishments

Chapter 003 RULE 3: MEDICAL CANNABIS

25-003 Code Vt. R. 25-000-003-X RULE 3: MEDICAL CANNABIS

Chapter 004 RULE 4: COMPLIANCE AND ENFORCEMENT

25-004 Code Vt. R. 25-000-004-X RULE 4: COMPLIANCE AND ENFORCEMENT

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