Burlington Cannabis Shop to Close, Citing Saturated Market 

A Burlington cannabis dispensary is preparing to close its doors, saying the costs are too high to run a successful business in such a saturated market.

Grass Queen, a small shop on South Union Street, will close on October 28, according to owner Jahala Dudley. It's one of 13 licensed weed stores in Burlington; two more have submitted applications.

That competition and other costs, including for licensing, make it impossible to stay afloat in what Dudley called the state's "pay-to-play system."

Her announcement comes two years to the day after Vermont's first legal cannabis shops opened. Today 89 licensed retailers are operating, and several more have applied for licenses. Grass Queen would be only the third to close, according to data from the Vermont Cannabis Control Board, which regulates the industry.

The rapid proliferation of stores, and where they are located, prompted the board to vote last week to stop accepting new license applications for cannabis stores. James Pepper, chair of the control board, noted that some municipalities haven't "opted-in" to the market, meaning stores can't open there. That, and a lack of a customer base in more rural areas, has concentrated stores in certain places.
Montpelier, Morrisville and Rutland each have four stores, for instance, with more applications in the queue. Towns including Derby, Waterbury and Brandon each have three.

During its most recent session, the Vermont legislature gave the control board the authority  to create "location or siting requirements that increase the geographic distribution of new cannabis retail establishments based on population and market needs." To do that, the regulators need to pause new retail license applications and come up with rules, according Pepper.

The process could take several months. But, Pepper said, the board is interested in exploring ways to make smaller stores more financially viable in rural areas that don't have nearby access to legal cannabis. For example, he said, the board could potentially create rules that would allow a general store to sell cannabis, for a smaller fee, rather than forcing a retailer to open a standalone shop.


"This truly is a pause while we write our rules," Pepper said in an interview. "Once we get a little bit more geographic distribution, maybe we'll open things back up statewide."

The regulators also voted to stop accepting applications for "Tier 2" growing licenses, which allow people to cultivate up to 2,500 square feet of cannabis canopy.  The decision means every larger tier is now closed and people can only apply for the smallest tier, which allows them to grow up to 1,000 square feet of cannabis canopy.