Model assumptions: Report in progress, presented in agile format for efficiency. 

Rand study cited 80k users in VT a half decade-ish ago. Assume this is more like 90k now. Rate of growth Year-over-year at 1.6x. Number of stewards shared as a range of 5-10% of total statewide levels. By year 4 it is very likely national legalization / class 1 rescheduling will have happened and VT will benefit from early-mover advantages. At that point, all forward growth is based on the expanding market cap of legal sales. This framework and stewardship model allows the Secretary of the State the latitude and powers to adjust and set production caps if necessary*, however this legislative framework is designed initially as an open architecture framework with the goal of incubating Vermont with the world’s greatest cannabis talent and professional relationships for future export markets. This is the simplest path towards achieving that outcome and generating a sustainable economy. 

 

Year 1 Numbers 

90k consumers of Vermont cannabis commodities and affiliated products and services.

4.5k to 9k licensed stewards in VT  = $1,687,500 to $3,375,000 annually and not including taxes on products and services.

 

Year 2 Numbers 

144k consumers of Vermont cannabis commodities and affiliated products and services.

7.2k to 14.4k licensed stewards in VT   = $2,700,000 to $5,400,000 annually and not including taxes on products and services.

 

Year 3 Numbers

231k consumers of Vermont cannabis commodities and affiliated products and services.

11.5k to 23.1k licensed stewards in VT = $4,332,000 to $8,662,500 annually and not including taxes on products and services.

It is not hard to imagine a landscape where a regulated cannabis commodity is both strengthening VT farms and growing in numbers of Vermonters who regularly consume cannabis. A growth rate of 2.56 over three years broadens the market to 231k. As such (and with requirements for licensed firms to hire 1 commissioned stewards for every 3 employees total) this model could generate upwards of $8.7M for Vermont in licensing fees annually by the third year. 

 

Decreased modeling confidences going forward realtive to Federal legislation, but

*NATIONAL LEGALIZATION IS LIKELY PRIOR TO YEAR 4. 

Licensed stewards at this junction may live outside of VT and be exporting product accordingly. 

Optional licensing fee for non-VT residents raised to $550 but not calculated below. Licensing fees relative to section 5428 ($375) are linked to these metrics but can easily cascade if that number changes in committees. 

Year 4 numbers-370k consumers of Vermont cannabis commodities and affiliated products and services.

13.5k to 37k  licensed stewards in VT = $5,062,500 to $13,875,000 annually and not including taxes on products and services.

#Steward and consumption numbers are not only VT residents.

 

With online transactions and direct-to consumer sales a likely reality in a nationally regulated competitive market, the model drops in confidence levels of from 95% to 75% relative to national legislation. Regardless, a flatline in growth would still yield a sustainable program for Vermont. With open borders and export opportunities, Vermont can easily capitalize on a massively expanding industry and consumer market for premium sourcing of product. There is also a unique opportunity to offer residents of existing legal states (and Canada) some next-level hospitality to make worries of crossing borders and getting “busted with a baggy on the road” a thing of the past. This model deescalates the stigma and makes VT a very attractive place for both working, living, and playing. As airports  between legalized states become increasingly networked, VT has the ability to engage travelers on a deep level and offer the meta brand experience required to hit these numbers. 

 

Year 5 numbers-592k consumers of Vermont cannabis commodities and affiliated products and services.

w/  29.6k to 59k licensed stewards in VT = $11,100,000 to $22,125,000 annually and not including taxes on products and services.

**International export markets opened. Note, these steward and consumption numbers are not only VT residents.

Year 6 numbers- 950k consumers of Vermont cannabis commodities and affiliated products and services.

w/  47.5k to 95k licensed stewards in VT = $17,812,500 to $35,625,000 annually and not including taxes on products and services.

**International export markets opened. Note, these steward and consumption numbers are not only VT residents.

At this junction VT legislators may wish to consider altering the ratio of licensed stewards in agricultural, manufacturing and production firms to 1 for every three total employees to 1 in 5 while leaving transportation and handling firms at a higher regulated ratio.

Revenue modeling assumptions based on the most recent VT Cannabis Task Force's findings of a low of $65M to a high of $150M projected for year 1.

Note, all requested budgets from that proposal can be met herein save the $8-$12M Agency of Education funding request. There were no program specifics provided to base any reliable modeling off of. Instead, the proposal develops an information and education component of the Director's work with the Agency of Education and per the goals of public safety, continuing education and a professional implementation of a regulated cannabis economy. Consider however the rise in new enrollments to public schools as reason to consider this model as well. These new enrollment levels will likely reverse the sinking trend line for statewide enrollment levels. 

© 2020 Dihedral Group, LLC 

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