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TESTIMONY COMMITTEE ON BUDGET, APPROPRIATIONS AND FINANCE J U L Y 2 3 , 2 0 2 5 3 6 T H L E G I S L A T U R E O F T H E V I R G I N I S L A N D S P R E S E N T E D B Y : J O A N N E M O O R E H E A D E X E C U T I V E D I R E C T O R VIRGIN ISLANDS OFFICE OF CANNABIS REGULATION R E : B U D G E T P R E S E N T A T I O N F O R T H E O P E R A T I O N S O F T H E V I R G I N I S L A N D S O F F I C E O F C A N N A B I S R E G U L A T I O N 1 Good morning, Senator Novelle E. Francis, Jr., Chair of the 36th Legislature's Committee on Budget, 1 Appropriations and Finance, Senator Marvin A. Blyden, Vice Chair, other members of this Committee, other 2 members of the 36th Legislature present, fellow testifiers, and the listening and viewing audience. I am 3 Joanne Moorehead, Executive Director of the Virgin Islands Office of Cannabis Regulation (OCR), a 4 subsidiary division of the Department of Licensing and Consumer Affairs (DLCA). I am grateful for the 5 invitation to join my DLCA team today, represented by Commissioner H. Nathalie Hodge, Assistant 6 Commissioner Horace Graham, Jr., and their team. Thank you for the opportunity to provide this testimony 7 before this body to discuss the funding, accomplishments, and goals for the Office of Cannabis Regulation for 8 Fiscal Years 2025 and 2026. 9 I am pleased to present this testimony in support of our Fiscal Year 2026 budget request. This request reflects 10 not only our continued commitment to transparency, accountability, and public health and safety, but also the 11 tangible strides we have made in implementing a regulatory framework for the Virgin Islands’ emerging 12 cannabis industry. 13 HISTORY 14 The Virgin Islands Office of Cannabis Regulation was first created pursuant to Act No. 8167, the Virgin 15 Islands Medicinal Cannabis Patient Care Act which was a direct result of a 2014 referendum whereby 56.5% 16 of the Virgin Islands voting public voted to support “the licensing and regulation of medicinal marijuana, 17 patients, care-givers, cultivators and distribution centers”. Approximately one year after the passage of Act 18 8167, the 34th Legislature enacted the more comprehensive Virgin Islands Cannabis Use Act (Act No. 19 8680). The Virgin Islands Cannabis Use Act recognized the need to expand the Cannabis industry in order to 20 provide additional opportunities for employment and business ownership for Virgin Islands residents, 21 alleviate social injustices experienced by persons subjected to the criminal justice system in matters related 22 to the cultivation, sale, and possession of marijuana, recognized cultural and sacramental uses of Cannabis, 23 2 and will generate much needed tax revenues for the Territory. This Cannabis Use Act further establishes a 24 holistic, regulated system for the cultivation, manufacture, and sale of Cannabis for adult, medicinal, and 25 sacramental use. 26 Governed by the Cannabis Advisory Board, a body of eleven persons who are either appointed by the 27 Governor and approved by the Legislature or serve in an ex-officio capacity, the Office of Cannabis 28 Regulation has the executive authority to implement and administer the provisions in Act 8680 including but 29 not limited to promulgating rules and regulations related to the cultivation, manufacture, sale, dispensary, 30 testing, licensing, and use of Cannabis, prescriptive use of Cannabis, and Sacramental Use. I joined this 31 Office on May 20, 2024 shortly after the adoption of rules and regulations which were approved on May 4, 32 2024. 33 ACCOMPLISHMENTS 34 Over the past fiscal year, the OCR has diligently used the appropriations from both the General Fund and the 35 Tourism Advertising Revolving Fund (TARF) to establish a professional regulatory body capable of 36 overseeing licensing, enforcement, and stakeholder engagement. With your support, we have moved from 37 concept to execution—staffing our agency, outfitting our offices, conducting inspections, educating the 38 public, and facilitating the lawful application process. 39 The Office of Cannabis Regulation has seen great growth since its last appearance before this Committee in 40 July of 2024. The most significant of which is that the Office has grown from a staff of one to a staff 41 complement of six, including myself, one Office Administrative staff member, and four enforcement staff 42 members – two in each district. 43 As previously testified, the Registry system, an online system where all Practitioners, Patients, Sacramental 44 Organizations, Sacramental Users, and Designated Caregivers can apply for, register, and receive their 45 3 identification cards has been live for one year now. To date, we have four (4) certified Practitioners on both 46 St. Thomas and St. Croix; a total of 32 registered medical patients across the territory with five (5) pending 47 applications; and three (3) sacramental organizations that are in the process of becoming registered 48 representing approximately 60 individual sacramental users. We have also reached the point of the year 49 where we are starting to process the first set of patient registration renewals. 50 In addition, the OCR has begun the cannabis business license application process. In March of 2025, the first 51 cannabis business license and permit applications were made available on the OCR website for cannabis 52 cultivation licenses and micro-cultivation permits. The deadline for the first set of applications was June 27, 53 2025. We received a total of 26 applications – 14 on St. Croix, 10 on St. Thomas, and 2 on St. John. All of 54 those applications are pending background verifications and merit-based evaluations. Awarding of licenses 55 per the law is supposed to happen within 90 days and we anticipate being able to meet that timeframe. Also, 56 in the first week of July cannabis dispensary license applications became available and will remain open 57 until at least September 30. We are seeing a lot of interest in those licenses and expect that we should see 58 similar numbers or slightly fewer than the cultivation applications. Within the coming months, we will also 59 have available cannabis manufacturing license applications as well as research and development license 60 applications and permits for third party vendors, events, and more. 61 UTILIZATION OF APPROPRIATED FUNDS – FY 2025 62 During the FY 2025 budget hearings, this body urged the OCR to begin drawing from the $1,000,000 63 appropriated under Act 8680 from the TARF. In response, we acted swiftly and strategically. As of June 64 2025, we have expended $616,480.78 of those funds, with an additional $100,000 encumbered under the 65 first-year contract with METRC for the seed-to-sale inventory tracking system. 66 4 A substantial portion of the funds—$243,180.00—was 67 allocated to the purchase of four law enforcement 68 vehicles, two for the St. Thomas/St. John district and 69 two for the St. Croix district. At present, two vehicles 70 (one per district) have been received and are actively 71 assigned to enforcement personnel. The remaining two 72 were custom ordered to meet law enforcement 73 specifications and are expected to be delivered in 74 September. 75 We also invested $34,826.80 in furnishing both district offices. The St. Thomas office is now fully outfitted 76 and operational, housing the enforcement unit. While the St. Croix office furniture has been delivered, 77 installation is pending due to ongoing maintenance needs in the shared DLCA space. We are deeply grateful 78 to the Department of Licensing and Consumer Affairs for accommodating OCR operations within their 79 facilities until the identified office space becomes fully available. 80 In support of our digital infrastructure and operational readiness, the OCR allocated $26,691.00 toward IT 81 hardware and $248,666.66 toward our contractual obligations with Tyler Technologies for the Medical and 82 Sacramental Use Registry Portal, which will integrate directly with METRC to streamline application 83 management and compliance tracking. 84 With the onboarding of staff, the OCR prioritized training and national regulatory engagement, spending 85 over $32,000 on professional development and inter-agency coordination. This includes travel, per diem, 86 registration, and lodging for participation in industry events such as the Cannabis Regulators Association’s 87 (CANNRA) Annual Conference, California Narcotics Officers Association’s (CNOA) 2025 Cannabis 88 5 Enforcement Summit, and MJBizCon – the largest cannabis trade expo in the US, as well as targeted 89 enforcement training for staff. We are thankful to the State of California’s Department of Cannabis Control 90 who not only provided the OCR’s team – inclusive of two officers from the Virgin Islands Police 91 Department – with scholarships to attend the CNOA summit but also provided over a week of specialized 92 cannabis enforcement to the OCR’s agents at no cost to the agency outside of travel and accommodations. 93 These specialized trainings and engagements have been vital in helping the OCR remain aligned with 94 national regulatory standards and best practices. 95 General Fund appropriations totaling $790,327 supported 96 salaries, fringe benefits, and critical enforcement 97 resources. As of June 2025, we have utilized 98 approximately 52%—or $409,450.06—with full 99 expenditure anticipated by year-end. These funds were 100 used to acquire essential gear for the Enforcement Unit, 101 including firearms, portable radios, and field gear such as uniforms, and test kits capable of detecting both 102 high and low THC concentrations in cannabis and hemp products. These field test kits will soon be deployed 103 during inspections and compliance checks. 104 In alignment with our mandate to protect public health and to ensure that products being sold in the territory 105 meet all legal and regulatory standards, the OCR is also actively working with the Department of Property 106 and Procurement to procure two advanced cannabis analyzers. These analyzers will provide enhanced 107 testing capabilities across a variety of cannabis and hemp-based products, including dried flower, 108 concentrates, tinctures, and edibles—ensuring the integrity and safety of products being distributed in the 109 legal market. Parallel to this effort and as previously mentioned before this body, we have provided the 110 Department of Health's Public Laboratory with cannabis-specific lab testing equipment at a cost of 111 6 $207,000, to further enhance the territory’s testing capacity. 112 To strengthen regulatory alignment with national standards, General Fund appropriations have also 113 supported OCR staff attendance at high-level professional development and enforcement trainings, including 114 participation in the 2025 CANNRA Annual Stakeholders Meeting and other cannabis policy and law 115 enforcement events across the country. These sessions have proven instrumental in guiding rulemaking, 116 public health standards, and interagency coordination. 117 Additionally, because public outreach and education are critical and essential components of the rollout of 118 Act 8680, the OCR has worked tirelessly to create solid partnerships with key partner GVI agencies such as 119 VIPD, VIDE, DOH, and the Office of the Governor in order to launch a comprehensive campaign to raise 120 awareness on safe, legal, and responsible cannabis use as well as launch targeted campaigns to reduce 121 cannabis use among our most vulnerable populations. In addition to those targeted campaigns, the OCR is 122 also working with a local vendor to develop a territory-wide safe cannabis use public education campaign, 123 with $39,500 already committed toward this initiative. 124 Our strategic use of funds has enabled the Office of Cannabis Regulation to transition from foundational 125 startup to an active regulatory agency—with operational enforcement, inter-island coordination, and 126 stakeholder engagement well underway. 127 FY 2026 BUDGET REQUEST 128 For Fiscal Year 2026, the Office of Cannabis Regulation is respectfully requesting a total of $1,639,917, 129 comprised of $1,439,917 from the General Fund and $200,000 from the Tourism Advertising Revolving 130 Fund. While this represents a modest increase from FY 2025, it reflects a strategic reallocation—heavily 131 weighted toward the General Fund—to sustain our expanded staffing and operational needs. 132 7 We are requesting $685,000 in personnel services to 133 maintain our current workforce and add three critical 134 positions: a Deputy Director of Cannabis Regulation and 135 Administration, and two Compliance Auditors. These roles 136 are essential to ensuring licensee accountability, enforcing 137 tax compliance with the Bureau of Internal Revenue, and 138 continuing to reduce OCR’s reliance on external agencies 139 and consultants. 140 Fringe benefits are budgeted at $285,550, which include retirement, Medicare, health insurance, and 141 workers’ compensation. This ensures compliance with employment mandates while also promoting staff 142 retention and continuity. 143 The OCR also seeks $287,167 for supplies, including $248,666.66 for continued use of the Tyler 144 Technologies Registry Portal. This robust platform is fully integratable with our seed-to-sale tracking system 145 and will be central to our ongoing licensing, monitoring, and compliance efforts. The remaining funds will 146 support essential field supplies and uniforms for staff safety and professional representation. 147 We are allocating $182,200 for other services, which include $30,000 for staff training, $20,000 for 148 professional consulting, $77,200 for travel, inter-island coordination, and national regulatory engagement, 149 and $50,000 for advertising and public education. Membership in national cannabis regulatory associations 150 and continued outreach efforts are critical to ensuring the OCR remains on par with evolving national 151 standards and transparent public communication. 152 From the Tourism Advertising Revolving Fund, the OCR proposes to utilize $200,000 to support the 153 METRC contract and purchase two additional vehicles for compliance operations. This request 154 8 complements the remaining $250,000 balance from Act 8680, which will be used to procure two more 155 cannabis analyzers and supplemental field testing kits—tools essential to distinguishing legal cannabis from 156 hemp-derived products often misrepresented under the 2018 Farm Bill. 157 REVENUE GENERATION 158 It is important to note that the OCR has also begun to 159 generate its own revenue. From October 2024 through 160 June 2025, the Office collected $103,725.00 in 161 revenue—$100,500 of which came from cultivation 162 permit and license application fees. The remaining 163 portion came from registration fees related to medical 164 and sacramental use. The dramatic uptick in revenue in 165 June, following the launch of cultivation applications, 166 underscores the industry’s economic promise and the OCR’s potential for financial sustainability. We expect 167 this trend to continue as we move forward with the application process for the remaining cannabis business 168 licenses including dispensaries, manufacturing, and research and development. 169 CONCLUSION 170 The proposed FY 2026 budget for the Office of Cannabis Regulation is not just a request—it is a roadmap 171 for progress. It supports the Office’s transition from setup to sustainability and reflects our commitment to 172 transparency, public health, economic development, and stakeholder trust. We have demonstrated that we 173 can implement effectively, spend responsibly, and remain aligned with best practices and legal obligations. 174 With continued support from this honorable body, the OCR is positioned to deliver a cannabis industry that 175 is not only compliant and beneficial to the residents and visitors of the Virgin Islands but, most importantly, 176 safe for everyone within our territory’s shores – whether medical or sacramental consumers, resident and 177 9 visiting recreational consumers alike – while also respecting the rights and protecting the safety of those 178 who choose not to consume. 179 We respectfully request your full support of our FY 2026 budget to continue building the infrastructure, 180 tools, and trust required to fulfill our mandate. I thank you kindly for this opportunity today to share with 181 your Committee the plans and goals for the Office of Cannabis Regulation and stand ready to field any 182 questions you may have regarding our budget. 183