When Will Rhode Island Recreational Dispensaries Open?
When The Rhode Island Cannabis Act was signed into law in May 2022 and the state became the 19th to legalize the possession, home-growing, and recreational use of cannabis, many wondered when new dispensaries would start opening.
Under the law, the sale of small amounts of marijuana for recreational purposes is allowed, meaning that you can buy cannabis legally from licensed stores. It is also legal to possess up to one ounce of cannabis in public.
But here we are in 2024 and where are all the dispensaries? The promised “boom” of dispensaries across the state that many people are talking about has so far failed to materialize.
So, what can we expect in 2024?
Where can you currently buy cannabis legally in RI?
Adults over the age of 21 in Rhode Island can possess up to one ounce of cannabis on their person and up to ten ounces in their homes. You can also legally grow up to three mature and three immature cannabis plants in your home (a total of six plants).
Remember, you cannot smoke or vape cannabis in public places that prohibit smoking or vaping tobacco. Local municipalities may have also banned the activity in additional places under their control so check the rules before smoking or vaping.
From December 2022, adults have been able to purchase cannabis from one of five dispensaries that already existed for the sale of medical cannabis in Rhode Island. These were effectively “repurposed” to allow recreational sales of cannabis to adults as well as medical purchases.
Another two dispensaries have since received cannabis business licenses, making a total of seven dispensaries open for business in Rhode Island as of January 2024.
Retail cannabis licenses in Rhode Island
The Rhode Island Cannabis Act also outlined proposals for many additional licensed dispensaries across the state—specifically so that up to four stores could operate in each of six regions in the state.
Rhode Island’s cannabis law sets a cap of 24 retail licenses. One store in each region must be a worker-owned co-op and one must be owned by a social equity applicant.
The cannabis retail license application process for new dispensaries has been underway for some time. The application process is overseen by the Cannabis Control Commission in Rhode Island, which is the body responsible for regulating the industry in the state.
Licensing fees are costly in Rhode Island, with retail operations paying $125,000 to the Department of Business Regulation (DBR) to sell adult-use recreational cannabis PLUS an annual licensing fee of $500,000.
What does the Cannabis Control Commission say about new dispensaries in RI?
The makeup of the state’s Cannabis Control Commission was confirmed in mid-2023. Since then, there has been a lot of chatter in Rhode Island about when more adult-use cannabis stores would be coming online.
The Commission is headed by Kimberly Ahern and one of the most pressing concerns is the opening of the promised new dispensaries. A glut of cannabis is available because cultivators have been preparing inventory for new stores to come online sooner rather than later—and the situation is not helped by the oversaturated market in neighboring Massachusetts.
Ahern said back in the middle of last year that new stores will open in 2024 but the licensing process won’t start until regulations on how that process will proceed are finalized. She added that she wanted to collect feedback from stakeholders, including those who have been impacted by prohibition.
Ahern believes that a lottery-type selection system, such as the one used to pick the most recent dispensary licensees, might not be the best way to proceed with the new dispensaries.
How is the cannabis industry doing in Rhode Island?
Legal sales of recreational cannabis reached their first anniversary in December 2023.
State records show that sales are currently ticking along at around $7 to $7.5 million per month at the seven dispensaries across the state, increasing month over month since Dec 2022. The estimated sales figure for fiscal year 2024 is $76 million.
Over the past 12 months, the sales of medical cannabis have steadily fallen. This is in line with the experience of other states that have legalized recreational cannabis. The combined monthly total for recreational and medical cannabis is around $9-10 million.
Hopes for more cannabis dispensaries in 2024
It’s a case of “watch this space” for news about when Rhode Island’s promised dispensaries will open. There is hope—but no guarantee—that this will be sometime during 2024.
As the Cannabis Control Commission beds down and tackles its considerable workload, perhaps RI residents can look forward to a dispensary opening nearby soon.
For informed legal advice about cannabis businesses in Rhode Island, call 866-329-0729 for a consultation at Cannabis Law Solutions.
How will our cannabis and psychedelic business services help you
Cannabis & psychedelics business entity formation
Whether you are looking to form a limited liability company (LLC) or a corporation, our experienced business lawyers can discuss the pros and cons of both and help you incorporate your business with the optimal structure to achieve your goals.
Cannabis & psychedelics business licenses
If you want to run a cannabis or psychedelics business, you will need a valid business license issued by your state authority as well as local permits. Eligibility criteria are likely to be stringent and we can help you navigate the often-complex license application process.
Cannabis & psychedelics corporate documentation
Whether you need to prepare for a license application, transfer of business ownership, change of corporate structure, transfer business location or another business process, we can help you identify and draft the documentation you need to operate legally in your state.
Cannabis & psychedelics administrative law
State authorities watch licensed and unlicensed cannabis and psychedelics businesses closely. If you violate regulations, you could face an administrative penalty. Our attorneys can provide representation or help you prepare for an administrative hearing, settlement conference or appeal.
Cannabis & psychedelics disputes and litigation
Whether you have a dispute with another business, a legal issue with one of your partners or a licensing or administrative issue, you may need legal assistance to help resolve it. We are adept at alternative dispute resolution methods as well as civil litigation.
Cannabis & psychedelics regulatory compliance
As the cannabis and psychedelics industries emerge in states around the U.S., they are more heavily regulated than most other industries. We can help your business navigate the red tape and plan to stay on the right side of the regulatory authorities in whichever state you are based.
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Opening a successful and legal marijuana dispensary begins with hiring a knowledgeable cannabis attorney and learning all that you can about this industry and the applicable laws. The next step is to set up a corporate business structure and create a retail business plan, which an attorney can also help you with. You will also need to research potential locations for your business to find out where licensing is legal.
Next, obtain the necessary licensing to operate your cannabis business and ensure that your operational infrastructure follows all laws and regulations. If you are not growing or producing your products yourself, you will need to contract with cultivators and product manufacturers to supply your business.
Before you begin the process of applying for a cannabis license, you need to establish a business from which to apply. The state will not consider an application from an individual; instead, the applicant must be a business entity in good standing with the state.
Your business will begin when you choose a legal entity and file the appropriate paperwork with the Secretary of State. After that, you will file with the IRS and obtain a taxpayer identification number.
You would start with articles of incorporation and include other key corporate provisions in the bylaws that state how your company will be governed. If your business is a partnership or limited liability company, you will need an operating agreement. Depending on your line of business, you may also need other licenses to operate.
In addition, you will also need other corporate documents that the Department of Health will want to see when they are considering your cannabis application. Of importance here, your application would ask you to provide:
Your articles of incorporation
Certificate of good standing
An attorney can help you both choose the appropriate business entity and draft and file any necessary documentation. When you are seeking to enter the cannabis field, it is important to get your business formation process right to make the best possible impression on the Department of Health. Doing so will allow you to devote as much time as possible to your cannabis-related business arrangements.
As a precursor to even being able to apply for state approval of your cannabis business, you must have a properly formed business entity. As a result, the first documentation you must file is the documentation establishing your business.
Next, you will need to obtain a tax identification number by registering with the IRS. In addition, the licensing application also asks you to provide your current state business license registration.
Beyond your general business licenses, you would also need specific permission to operate a cannabis business. This involves a very strict registration process where the state will closely scrutinize your application. You can expect the state to review each of the licenses that they request since it wants to be sure that your business complies with laws before they are granted the right to operate in the cannabis industry.
Compliance means making sure that you follow the myriad of laws that apply to your state’s cannabis businesses. Further, the regulatory landscape is fast-changing as the state gains more experience overseeing the businesses.
What this means for you is that knowledge is one of the most important things that you can have. Not only do you need an expert in the current laws, but you also need to be able to anticipate future changes in the law. This means that each business needs an expert who understands the laws and can advise them as to the best means of following them.
Also, compliance also means that you have sound policies and procedures in place that govern your business. The Department of Health is already looking at your policies when they evaluate your initial application. However, they reserve the right to audit and inspect your business to verify that you are complying with the law. You should always be ready for an inspection by documenting how you are following the regulations.
The best way to show compliance is by keeping your paperwork organized and conducting your own internal audits. The Department is interested primarily in your safety procedures, so you should be ready to show how you are following your own procedures. Further, you should always reevaluate your own policies to see if there are any weaknesses or changes that can be made to strengthen them.
The major thing that the Department of Health is interested in is the safety of both the product and the operation. As a baseline, the state wants to know who all of the owners are and the people who will be working in the operation.
While there are common documents among all the application classes that the Department is seeking, there are also special requirements for each of the categories.
For example, when the Department is evaluating a manufacturing application, it will pay close attention to measures that your business takes to ensure proper hygiene and testing methods. The Department also will pay attention to the manufacturer’s procurement practice and the security of its inventory.
With regard to laboratory submissions, the focus is partially on the testing processes and equipment that the business will use. The Department wants technical, scientific details of the exact tests and the quality control that the laboratory will use for testing. The emphasis is on ensuring product safety.
For courier businesses, the Department will scrutinize the safety and security of the delivery process, including the vehicles and the delivery routes that are used. The emphasis is on the safety of qualified patients, primary caregivers, and courier staff in light of the product being delivered. In addition, since there is interaction with patients, the Department wants to see how the applicant plans on protecting patient privacy.
Cannabis legalization often works in a series of steps. Broadly speaking, cannabis policy reform occurs in the following stages:
Prohibition: Criminal penalties apply for the possession or use of cannabis.
Decriminalization: Low-level criminal penalties are removed for cannabis usage (e.g., personal possession) and criminal penalties may be replaced with civil fines.
Medical legalization: Full medical legalization with commercial licensing and testing may come straight away or in a series of stages.
Legalization: State laws are changed to make any cannabis activity a crime no longer. Cannabis must be removed from the Controlled Substances Act and new rules added for the legal commercial cultivation, distribution, testing, and sales of cannabis.
Oregon and Colorado states have decriminalized the use, sale, and possession of psilocybin, which is the active ingredient in “magic mushrooms” and has been shown to have great value in treating certain medical conditions, like depression, anxiety and life-threatening cancers.
Besides these states, the cities of Oakland and Santa Cruz in California as well as Washington, D.C., Somerville, Cambridge and Northampton (Massachusetts) have all decriminalized psilocybin.
It should be noted that all psychedelics are illegal in the United States under federal law and drugs like MDMA, DMT, ketamine, LSD and psilocybin are Schedule 1 controlled substances. This means they are viewed as having no medical purpose and no legitimate commercial application