By Marc Brandl
This May, Rhode Island became the 19th member of a growing club of states that have legalized adult recreational sales of cannabis. The opportunity now exists to establish the first retail cannabis dispensaries in the Ocean State.
Rhode Island has a mature medical cannabis market dating back to 2006, with three retail stores known as “Compassion Center”s. The Compassion Centers serve about 20,000 registered patients, with yearly total sales just under $75M in 2021. The three existing medical cannabis Compassion Centers will be able to obtain a hybrid adult-use retail license first and sales are expected to begin in December 2022.
Additionally, 24 new retail licenses will be issued across six geographic areas of the state, with 25% (6) being awarded to social equity applicants, and 25% (6) will be awarded to worker-owned cooperatives, which is the first of its kind. The other twelve retail licenses will be awarded according to rules outlined in the new laws and additional requirements, which will be determined by the newly formed Rhode Island Cannabis Control Commission (RI CCC).
Cannabis manufacturing (‘Processor’) licenses are currently unlimited. Manufactured cannabis products are currently only made by the three medical cannabis Compassion Centers.The RI CCC will release application deadlines and requirements by year’s end.
There are currently 60 active cultivation licenses for the medical market and the new law imposes a two-year moratorium on new cultivation licenses being granted. The short-term opportunity for obtaining a Rhode Island license is for retail and processor applicants.
While Rhode Island may never become a multi-billion dollar cannabis market due to its small population (~1 million residents) there are distinct advantages to entering this newly legalized market:
- Limited license state: Only 27 total retail licenses for the entire state.
- Out of state sales: Rhode Island shares a border with Maryland and Pennsylvania that currently have no adult-use markets.
- Taxes: The legislation calls for a 20% tax rate, split up into the 7% sales tax, a new 10% cannabis tax, and a 3% tax by the municipality where the cannabis is sold. This should make retail prices favorable to other regional state markets.
Interested in a cannabis license? The Rhode Island Cannabis Act requires all applicants to have at a minimum:
- Operating Plan
- Inventory Tracking Plan
- Financial Plan
- Additional requirements to be determined by the RI CCC
Arcview Consulting can help. We’ve worked with a diverse range of cannabis license seekers coast to coast, including those who are seeking to be a part of the growing East Coast market., We will work with you through every step of the application process – crafting the SOPs, developing a business plan and go-to-market strategy, fundraising, valuations and strategic transactions.
Are you an existing operator in another state and looking to expand your geographical footprint? Let Arcview Consulting and our partners do the work for you. Our team is efficient and experienced in delivering results.
Contact us today to discuss your plans for Rhode Island and beyond. Please reach out to our Director of Business Development, Sarah Falvo to schedule a call.