July 11, 2019

Licenses for Six New Vertically Integrated Medical Cannabis Dispensaries Expected in January 2020


A state budget proposal in Rhode Island would expand the number of dispensaries in the state, while also allowing the new businesses to grow and manufacture their own product. According to the Providence Journal, a budget plan released by state legislators would increase the number of dispensaries in Rhode Island’s medical cannabis program from three to nine. Under the proposal, the six new dispensaries would be permitted to establish fully vertically integrated operations, including cultivation and product manufacturing, as the three existing dispensaries have done already.

The Journal’s report notes that standalone cultivators that began to be licensed by the state in 2017 are dissatisfied with the plan, as giving all dispensaries the ability to self-supply will lower demand for their production and could essentially shut them out of the market. The Journal notes that there are almost 50 independent cultivation operations up and running in Rhode Island.

The budget proposal would also double annual license fees for dispensaries from $250,000 to $500,000. The Journal report states that applications for new dispensaries would be accepted beginning in September, with licenses issued in January, should the budget plan be approved in its current form.

While existing cultivators are reportedly unhappy with the prospect of allowing new dispensaries to self-supply, new storefronts opening early next year would likely need time to establish cultivation operations. In that period, wholesale demand from existing cultivators could increase as storefronts look to stock their shelves and generate revenue initially.