PROVIDENCE – As the R.I. Cannabis Control Commission takes the next several months to draw up the state’s crucial first set of regulations on adult recreational cannabis use and issue the remaining 24 recreational licenses, commission Chairwoman Kimberly Ahern assured industry members on Thursday that the three-member panel won’t be acting alone.
The commission is not only seeking guidance from the recently formed Cannabis Advisory Board but will also draw from connections to individual stakeholders in the local cannabis sector, said Ahern, the keynote speaker at Providence Business News’ 2023 Business of Cannabis Summit at the Providence Marriott on Thursday morning.
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“For our cultivators, for our testing labs or compassion centers, I know that for many the past several months have been a struggle,” Ahern said. “I promise you that I will always keep in mind the many conversations I’ve had over my first few months before making any substantive decisions.”
Along with Ahern’s remarks, the event included two panel discussions with a variety of industry experts, business executives and community leaders. These panels focused on building the state’s cannabis industry as well as key opportunities and challenges facing business owners.
Over the 10 months since the legalization of recreational cannabis in Rhode Island, sales have continued to grow, said Ahern, citing monthly data released from the R.I. Office of Cannabis Regulation. The most recent statistics show that adult-use sales are up 74% year over year.
Rep. Scott A. Slater, D-Providence, one of the summit’s panelists, also said that this year’s sales are now on track with the fiscal 2024 projections. According to the R.I. Department of Revenue, current estimates show adult use sales of cannabis will be approximately $76 million, with more than $15 million in total state and local tax revenue, including $7.6 million from a 10% excise tax and $5.3 million from the state’s 7% sales tax.
Despite the promising numbers, the state’s slow regulatory rollout contributed to weaker than expected sales during fiscal 2023, said Slater, with sales at $34.4 million compared with the original estimate of $41.3 million.
Other panelists agreed that Rhode Island’s 60 cultivators have struggled with an oversupply while waiting for the commission to issue the remaining retail licenses, some of which will be reserved for social-equity applicants and worker-owned cooperatives.
But Spencer Blier, CEO and founder of cannabis cultivator Mammoth Inc., noted there are benefits to state’s limiting licensing policies as careful allocation of licenses could help Rhode Island escape the decline in sales Massachusetts cultivators are currently facing.
“The best way to avoid that kind of price crash we’ve seen happening in Massachusetts is to make sure … there is some serious thought put into spacing these [licenses] out so that the retail stores aren’t price battling with each other, and the cultivators aren’t suffering the prices going lower and lower,” Blier said.
While there are currently advertising restrictions on Rhode Island cultivators, panelists agreed this will likely change. Armand T. Lusi, principal of Evergreen Gardens LLC and a member of the Cannabis Advisory Board, emphasized that providing cultivators with advertising opportunities will be a priority in line with the commission’s commitment to social equity.
“Cultivators have been disproportionately impacted; for example, 60 cultivators pay $1.27 million in license fees and we can’t advertise,” said Lusi, who is also president of the Rhode Island Cultivator Industry Association. “My focus is going to be purely on the cultivator because we provide more product than the dispensaries.”
While members of the Cannabis Advisory Board were announced weeks ago, panelists indicated there will be more positions to fill, including an administrator of the cannabis office, which is a position nominated by the governor. Also, once the regulations are issued the commission will then replace the Office of Cannabis Regulation as the primary government entity for Rhode Island’s cannabis regulations.
The panels also included Kristyn M. Glennon, first vice president and Bank Secrecy Act/Anti-Money Laundering officer of BayCoast Bank; Benjamin Rackliffe, partner with Pannone Lopes Devereaux and O’Gara LLC; Drew Richards, director of Marcum LLP; Kelly Wishart, chief operating officer of Coastline EAP/RISAS; Ronald Crosson, executive director of Urban Ventures Inc. and chairman and social equity officer for the R.I. Cannabis Advisory Board; and Stuart Procter, co-owner and laboratory director of PureVita Labs LLC.
(Update: SUBS penultimate paragraph to correct that position of administrator is nominated by the governor.)
