By Paula Savchenko, Esq.
Nicknamed “America’s Paradise,” the United States Virgin Islands (US VI) is famous for its beautiful oasis, along with its rich culture and celebrated history. In the very near future, the US VI will soon be expanding its economy to a new industry as the Virgin Islands Department of Licensing and Consumer Affairs’ Office of Cannabis Regulation (OCR) will be implementing the commercial regulatory framework under the Virgin Islands Cannabis Use Act (Act 8680).
Prioritization of US VI Residents
To improve economic opportunities for its people, the US VI’s cannabis regulatory framework prioritizes its residents by requiring all license applicants to have at least 50.1% majority ownership tied to Virgin Islands residents. A “resident” is defined as “any natural person who currently resides in the Territory for ten of the last fifteen years prior to applying…” Specifically for micro-cultivation permits, they will only be issued to current residents of the US VI who have resided in the Territory for at least three years and have no less than seven cumulative years of residency at the time of application. The emphasis on local ownership intends to ensure the financial benefits of the cannabis industry remain in the hands of its residents, fostering community growth and sustainability.
Social Equity
As many US VI residents have been impacted by prior prohibitions on the cultivation, possession, and sale of cannabis, the Territory’s new program has carved out a bonus category for those who qualify as a social equity applicant. An additional 150 points will be granted to applicants who meet one of the following criteria: (i) majority ownership held by individuals or groups who have previous arrests or convictions of non-violent cannabis offenses OR whose parents or legal guardians have prior arrests or convictions of non-violent cannabis offenses; (ii) majority ownership held by an individual or group who are members of a certified religious group impacted by law enforcement for sacramental use of cannabis; (iii) female-owned entities; or (iv) service-disabled veteran entities.
Application Basics
Under section 778 of the Act, interested applicants can apply for the following license types: (i) Cultivation; (ii) Manufacturing; (iii) Dispensary; (iv) Research & Development; and (v) Testing Facility. Further, there will be additional permits such as Micro-Cultivation and Onsite Cannabis Consumption. In accordance with the Territory’s law, Cultivation and Dispensary licenses have a limited number available; however, the OCR can limit other types of licenses based on the market’s supply and demand. Section 787 of the Act sets forth that Cultivation and Dispensary licenses will be limited in the following manner: St. Thomas Island and St. Croix will be limited to fifteen Cultivation licenses and seven Dispensary licenses, whereas St. John Island will be limited to five Cultivation licenses and three Dispensary licenses.
Starting as soon as November 4, the OCR will begin accepting applications for licenses; however, the OCR will be conducting application periods in staggered windows as demonstrated in their estimated timeline. As such, the Dispensary application window is set to open on December 20, 2024; the Manufacturing application window is set to open on January 7, 2025; and the Cultivation application window is set to open on May 2, 2025. Each application window will remain open for approximately 46 days and those interested will have to pay a hefty application fee ranging from $10,000 to $50,000.
Unlike the approach many new cannabis programs have taken on, the OCR intends to conduct a merit-based, competitive application process. Each section of the application ranges from 50 to 150 points, with an additional 150 points available to social equity applicants. Generally, all interested applicants will need to identify property that is not located within less than 250 ft. of a school, house of worship, nor the perimeter of any cruise-bearing dock or pier in the Territory. Moreover, applicants will need to compile various comprehensive operations plans to demonstrate their ability to successfully operate a cannabis business in accordance with the OCR’s regulations, including, but not limited to, a business plan, facility plan, employee training plan, security and recordkeeping plan, and emergency plan.
Conclusion
With Governor Albert Bryan’s approval of the Territory’s cannabis industry, the US VI is poised to see expansive economic growth and job development. By prioritizing local residents and social equity applicants, the program aims to promote economic opportunities within the Territory and address historical injustices. Due to the regulatory requirements surrounding the application process, it is paramount for those interested to begin working with industry experts to compile their comprehensive plans.
Short Bio:
Paula Savchenko, Esq. is the founder of Cannacore Group, a multi-state cannabis and psychedelic licensing firm, and PS Law Group, a regulated substances law firm. As an attorney and consultant, she primarily works in the cannabis and psychedelic industries, working with clients on multi-state expansion initiatives. For more information, please visit www.cannacoregrp.com and https://www.pslawgrp.com.
