Home Economy PBN summit: Past missteps, current limbo still hampering legal cannabis sector

PBN summit: Past missteps, current limbo still hampering legal cannabis sector

Updated at 3:41 p.m.

By

Christopher Allen

-

03/06/2025

MICHELLE A. REDDISH, left, administrator for the R.I. Cannabis Commission, speaks at Providence Business News' The Business of Cannabis Summit at the Providence Marriott on Thursday. Also on the panel is, from left, Benjamin L. Rackliffe, partner of Pannone Lopes Devereaux & O’Gara LLC; Sasha Gorski, co-owner of Talaria LLC; and Ronald Crosson II, executive director of Urban Ventures Inc. and chairman and social equity officer of the R.I. Cannabis Advisory Board. PBN Editor Michael Mello, standing, moderates. / PBN PHOTO/MIKE SKORSKI

PROVIDENCE – In some ways, challenges facing Rhode Island’s legal cannabis industry were born from decisions made years ago. The panel discussion during Providence Business News’ 2025 Business of Cannabis Summit held at the Providence Marriott on Thursday morning showed why the nascent market has, at the very least, matured into a traditional retail sector,

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PROVIDENCE – In some ways, challenges facing Rhode Island’s legal cannabis industry were born from decisions made years ago. The panel discussion during Providence Business News’ 2025 Business of Cannabis Summit held at the Providence Marriott on Thursday morning showed why the nascent market has, at the very least, matured into a traditional retail sector, now with multiple competing interests. But market mismatches between cultivators and retailers, redundant licensing tiers across categories, whether so-called compassion centers should be allowed to grow and sell their own products, previous delays in setting up the state's regulatory body, or allowing retailers to advertise have all prevented the industry from reaching its full potential, panelists said. This is not to mention out-of-state competition; potential market consolidation; the social equity carveout – in which six of the remaining available recreational cannabis licenses must be given to social equity applicants, or those who were adversely impacted by the federal government's war on drugs; questions over whether individual municipalities will even allow retail sales within their limits; or the revenue and state tax dollars being lost to the underground market. After the Cannabis Control Commission approved a draft of the final regulations on adult recreational cannabis use on Jan. 8 – using a hybrid licensing model with applicants vetted before entering a random lottery – all agreed that the goal is to now issue the remaining 24 recreational licenses allowable under the Rhode Island Cannabis Act. With only seven licensed dispensaries and more than 60 cultivators, whether unwittingly or by design, the state has created an “unbalanced market,” said panelist Sasha Gorski, co-owner of cultivator Talaria LLC. Gorski said this is the reason that average prices in Rhode Island have fallen sharply in recent years from $15 a gram to less than $5 today. While a protectionist posture by the state may be needed to keep prices from falling off a cliff, the most important thing is getting new dispensaries up and running. “The best way to help this industry survive is to get those stores open as soon as possible,” she said. “We need more outlets to sell our product to.” Meanwhile, state agencies are now working diligently to move the industry along, said panelist Michelle A. Reddish, the state’s first cannabis administrator, who said there's a priority to issue licenses to the six social equity applicants. With close to 200 pages of regulations and more than 380 public comments received to date on the draft regulations approved by the commission in early January, Reddish said more time is needed before sending the final rules to the R.I. Office of the Secretary of State. Following approval of the draft regulations on Jan. 8, the regulations were posted to the R.I. secretary of state's website and the public was given 30 days to comment on them. While there is a statutorily mandated 180-day deadline after the close of the comment period for the Cannabis Control Commission to file the final regulations with the secretary of state, Reddish said, “We have no intention of taking 180 days to get through this process.” There will likely be no major changes to the current draft rules but there could be “minor tweaks," Reddish said, adding, “We are being judicious.” Reddish said adult use and medical retail sales are projected to reach $101.6 million and $21 million, respectively, this fiscal year. And the office expects recreational sales to almost double by fiscal year 2027 to $206 million. But Gorski said “those marks have not been hit” for current cultivators, who have seen monthly sales stagnate or decline. Panelist Benjamin L. Rackliffe, partner of Pannone Lopes Devereaux & O’Gara LLC, said the state still needs some more "runway" before it begins issuing new retail licenses, but he acknowledged that taking several years after medical legalization to solidify a recreational market has come at a price. “The reality is we were better positioned in 2017 than Massachusetts to go full adult use,” he said. “We had the grow infrastructure in place with the cultivators to meet the adult use demand right off the bat. And Massachusetts did not.” However, some decisions now baked into law may help the state avoid some of the pitfalls seen across the border, such as Rhode Island's two-year moratorium on new cultivator licenses, which Rackliffe said helped the cultivators “get to where, frankly, they probably should have been almost a decade ago. "We really need to prop up the cultivators," he said. "They have invested a lot of money, and they have been waiting a long time." Panelist Ronald Crosson II, executive director of Urban Ventures Inc. and chairman and social equity officer of the R.I. Cannabis Advisory Board, said it makes sense to take time to avoid mistakes made by other states, such as when Massachusetts rolled out its social equity program before the financing and regulatory compliance infrastructure was in place for minority-owned licensees to be successful. There is no purpose in “opening the door into failure,” he said. “And saying, 'Come on in...' but everything is still stacked against you.” Rackliffe agreed. “If we are going to be late to the party, we may as well be the best dressed," he said. (UPDATE adds information explaining social equity applicants in paragraph 4, recasts paragraph 11, adds paragraph 12 with information about public comment and the filing deadline, plus minor changes throughout.) Christopher Allen is a PBN staff writer. You may contact him at Allen@PBN.com.