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TESTIMONY COMMITTEE ON ECONOMIC DEVELOPMENT AND AGRICULTURE M A R C H 1 0 , 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 : U P D A T E O N T H E O V E R A L L S T A T U S O F 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 A N D I M P L E M E N T A T I O N O F A C T 8 6 8 0 Good afternoon, Senator Hubert Frederick, Chair of the 36th Legislature's Committee on Economic 1 Development and Agriculture, other members of this Committee, other members of the 36th Legislature 2 present, fellow testifiers, and the listening and viewing audience. I am Joanne Moorehead, Executive Director 3 of the Virgin Islands Office of Cannabis Regulation (OCR). Thank you for the opportunity to provide testimony 4 before this body regarding the overall status of operations and administration of the Office of Cannabis 5 Regulation. 6 HISTORY 7 For the benefit of those in the listening audience who are not familiar with the office, the Virgin Islands 8 Office of Cannabis Regulation was first created pursuant to Act No. 8167 of 2019, the Virgin Islands 9 Medicinal Cannabis Patient Care Act which was a direct result of a 2014 referendum whereby 56.5% of the 10 Virgin Islands voting public voted to support “the licensing and regulation of medicinal marijuana, patients, 11 care-givers, cultivators and distribution centers”. In 2023, the 34th Legislature enacted the more 12 comprehensive Virgin Islands Cannabis Use Act (Act No. 8680). The Virgin Islands Cannabis Use Act 13 recognized the need to expand the Cannabis industry in order to provide additional opportunities for 14 employment and business ownership for Virgin Islands residents, alleviate social injustices experienced by 15 persons subjected to the criminal justice system in matters related to the cultivation, sale, and possession of 16 marijuana, recognized cultural and sacramental uses of Cannabis, and will generate much needed tax 17 revenues for the Territory. This Cannabis Use Act further establishes a holistic, regulated system for the 18 cultivation, manufacture, and sale of Cannabis for adult, medicinal, and sacramental use. 19 Governed by the Cannabis Advisory Board, a body of eleven persons appointed by the Governor and 20 approved by the Legislature, the Office of Cannabis Regulation has the executive authority to implement 21 and administer the provisions in Act 8680 including but not limited to promulgating rules and regulations 22 related to the cultivation, manufacture, sale, dispensary, testing, licensing, and use of Cannabis, prescriptive 23 use of Cannabis, and Sacramental Use. To date, the Board is comprised of seven active members, four of 24 whom are ex-officio members pursuant to a round of amendments to Act 8680 enacted in the 35th 25 Legislature. There are two unfilled public seats and two unfilled seats appointed by the Governor. The OCR 26 is working in tandem with the Office of the Governor to identify prospective Board members whose names 27 would then be forwarded to the Legislature for approval. 28 ACCOMPLISHMENTS 29 Under the oversight of the Cannabis Advisory Board (CAB), the Office of Cannabis Regulation, is realizing 30 significant progress towards the fulfillment of many of the mandates found in Act 8680. 31 The OCR Rules and Regulations were adopted and approved in April 2024. Together with Act 8680, the 32 Rules and Regulations clearly outline the duties of the Cannabis Advisory Board, the Executive Director of 33 the Office of Cannabis Regulation, and the OCR Enforcement Division. Additionally, the rules and 34 guidelines pertaining to medical patient and sacramental use and possession limits, including requirements 35 for the registration of medical practitioners, caregivers, medical patients and sacramental users are found 36 within the Rules and Regulations. The entire license application process which governs the application for 37 and issuance of all cannabis-related licenses and permits is also outlined, in detail. 38 Since the adoption of these Rules and Regulations last year, the OCR has begun building the framework by 39 which the legalized Cannabis industry will operate. Anyone in the listening or viewing audience who is 40 interested in any aspect of the Cannabis industry here in the Virgin Islands is strongly encouraged to 41 familiarize themselves with these Rules and Regulations as they provide in great detail all of the 42 requirements for not only individual cards but also all licensing requirements related to dispensaries, 43 cultivation, manufacturing, research and development, and testing. The Rules and Regulations as well as Act 44 8680 can be found on our website, ocr.vi.gov, on the Governance and Regulations page. 45 When this Office last testified before this Committee in September of 2024, we reported that The Registry 46 system initially rolled out on January 17, 2024. The Registry system is an online system where all 47 Practitioners, Patients, Sacramental Organizations, Sacramental Users, and Designated Caregivers can apply 48 for, register, and receive their identification cards and certifications. All five of these online application 49 systems are now live. What that means for our Virgin Islands residents is that medical patients and/or their 50 designated caregivers, sacramental organizations and users, and medical practitioners can apply for their 51 digital identification cards right now via The Registry portal on the OCR’s website. To date, we have four 52 certified Practitioners on St. Croix and three in the St. Thomas/St. John district. We have thirteen registered 53 medical patients across the territory, with one application pending, and we have had three non-resident 54 medical patient cards registered. Compared to when we were last before this Committee in September, that 55 represents a 75% increase in practitioner registrations and a 600% increase in patient registrations in the last 56 five months. The OCR expects that the numbers will continue to steadily increase as we draw even closer to 57 seeing open doors on fully licensed Cannabis businesses in the USVI. 58 The question of when Cannabis Business Licenses will become available is the most frequently asked of the 59 OCR office. Act 8680 makes very clear the intention of this body to ensure that the license application 60 process for Cannabis Business Licenses be a fair, impartial, merit-based process. The OCR takes that 61 mandate very seriously. The ultimate goal of the OCR is to be able to fold the business license application 62 process into the existing portal that we use, known now as The Registry. However, being able to integrate 63 that licensing software application in the manner required will be at an additional annual cost and take 64 approximately one year based on projections from our software vendor. So as not to stymie the forward 65 momentum in the OCR and giving careful thought to contractually obligating the OCR and the Government 66 of the Virgin Islands to another annual expenditure at this time, for the first round of licensing, we have 67 devised and are finalizing the implementation of a system that allows us to create an intermediary solution 68 that will uphold the integrity of the process and open the application process. The most important part of 69 developing this system is ensuring the integrity of the merit-based process and ensuring that the information 70 required for submittal in application packages is treated securely and with sensitivity. 71 The roll-out of Cannabis Business Licenses will begin with cultivation licenses and micro-cultivation 72 permits at or about the same time as we issue a request for proposals for certified laboratory testing facilities 73 as mandated in the VI Cannabis Use Act. The requests for proposals for the laboratory testing facilities will 74 be managed, as is the protocol, by The Department of Property and Procurement. Parties interested in 75 responding to the request will have to be registered as vendors in The GVI Buy system which can be 76 accessed through that Department of Property and Procurement’s website. 77 Another key relationship being managed to facilitate licensing is the contract with Metrc, the vendor for our 78 seed-to-sale tracking system. In January of this year, the contract with Metrc was executed. Metrc is the 79 most experienced provider of Cannabis regulatory technology systems in the United States being utilized by 80 28 other governmental agencies, serving more than 500,000 individual clients. They are even familiar with 81 the unique needs of US territories, having worked with the government of Guam since 2021. In the last six 82 weeks, the OCR has already had a two-day intensive kick-off meeting with Metrc and begun our weekly 83 meeting cadence to continue the project implementation plan and fit-gap analysis. The OCR is eager to 84 continue working with the Metrc team to identify the best solutions for implementing the Metrc system on 85 the regulatory side and assist our licensees when the time comes for the implementation of the system on the 86 consumer side. 87 In addition to focusing on the business licensing process, the Office of Cannabis Regulation has also been 88 assiduously seeking and fostering collaboration with other Government partner agencies. The breadth of the 89 Cannabis industry is wide and varied and will involve many GVI agencies such as the Department of 90 Licensing and Consumer Affairs, the Office of the Lieutenant Governor, the Department of Finance, the 91 Department of Property and Procurement, the Virgin Islands Police Department, the Department of Health, 92 the Division of Personnel, the Department of Justice, the Virgin Islands Bureau of Internal Revenue, and the 93 Department of Planning and Natural Resources, to name just a few. Ensuring that the entire GVI team is 94 working cohesively will aid in a smooth roll-out of this new program. As we prepare for this multi-faceted 95 roll out, we are having robust conversations and establishing “taskforce” type teams with several agencies to 96 identify the need for new policies or changes to existing policies and to memorialize the relationships with 97 MOAs where necessary. 98 OCR STAFFING 99 As with every other agency in the GVI, funding and staffing of the OCR remain critical to maintaining our 100 momentum. Thanks to the hard work and assistance of the DLCA business administration team and Division 101 of Personnel, the OCR has officially onboarded its Enforcement Unit, now bringing the number of total 102 personnel in the office to six, three members in each district. The Enforcement Unit is comprised of a staff 103 of four (4), including two supervisory positions. We are in the process of an intensive education and training 104 period for the Enforcement Unit that is expected to continue for several months but in the first two weeks 105 has already included forty hours of OCR-specific training plus site inspections and re-certification 106 qualifications and in-service trainings to maintain POST status. Even while they are learning, members of 107 the Enforcement Unit are also actively engaged in conversations with other local enforcement agency 108 partners to solidify and memorialize working relationships and roles. The OCR will also be leading training 109 sessions and providing opportunities throughout the territory, or abroad when available, for other law 110 enforcement agencies in the coming months. I am confident that the OCR Enforcement Unit, with the 111 additional training they will be receiving in the coming months, will not only serve as knowledgeable 112 subject matter experts for their enforcement colleagues throughout the territory but they will also enhance 113 the strength and capacity of the overall enforcement arena in the Virgin Islands. 114 As the work of the OCR continues to increase and the issuance of business licenses comes to fruition, the 115 OCR anticipates the need for additional staffing. The OCR is constantly assessing and re-evaluating its 116 needs as additional work is realized. With the onset of licensed activity on the horizon, there will no doubt 117 be a need to increase the staffing capacity at the Office of Cannabis Regulation to include, at minimum, 118 additional administrative support position(s), a communications officer, a public safety coordinator, a 119 training specialist, and a full enforcement team inclusive of compliance-specific personnel. 120 GOALS 121 One of the biggest factors that will determine the growth rate of the Office of Cannabis Regulation, and the 122 industry in general, will be the actual submitted responses for licensing. As mentioned, individual and 123 sacramental organization identification cards are available now and registration of those individuals is 124 ongoing. Regarding business license application fees, although we have published a fee schedule on our 125 website for all licenses and permits deriving from the OCR, until we open the application process, we cannot 126 reasonably predict whether we will have an overwhelming response, and crucially the payments associated 127 therewith, or if we will see a lukewarm application response, or something in the middle. The information 128 we have now is purely anecdotal and therefore cannot reliably be used to inform decision-making or make 129 projections regarding potential revenue. 130 By the end of March, we will be opening the applications for cultivation licenses and micro-cultivation 131 permits first. And, although those will be the first applications available, we are not ignoring the 132 opportunities and requirements for other licensing. We believe that the processes for additional licenses or 133 certifications can run simultaneously so that we do not further delay the much-anticipated issuance of 134 business licenses. For example, also in the next two months, there will be, as mandated, Requests for 135 Proposals (RFPs) issued for private testing facilities, as well as applications available soon after for third- 136 party vendors, dispensaries, manufacturing, and more. 137 The Office of Cannabis Regulation strongly believes that as we continue moving forward to a fully realized 138 industry, a key component to the success of the roll-out is a robust public education and outreach campaign 139 with the participation of key partner agencies. Not only will it be critical to the success of those individuals 140 and entities who will be licensed either as consumers or business owners but the messaging will also be 141 critical for the public, those who reside here or just visit and those who actively participate in the industry or 142 those who choose not to, to understand clearly what is permissible and what is not. To that end, we are 143 working with key partner agencies such as VIPD, at large, and its Division of Highway Safety, the 144 Department of Health, the Virgin Islands Department of Education, Department of Human Services, and 145 others. 146 The outreach and education campaign will entail messaging that targets all demographics of our population 147 – that is, our youth and our adults, our medical patients and sacramental users, our residents and visitors, our 148 recreational users and our non-users. Although the USVI has decriminalized cannabis, there are still many 149 rules and laws that apply to the growing, consumption, and possession of cannabis and it is critical for all 150 members of our territory to understand. It is imperative to note that this cannot be a short-lived effort, in 151 other words, a campaign that runs for six months and then ends. Those of us old enough to remember when 152 the seat belt laws were enacted or the advent of drinking and driving and no smoking campaigns know that 153 this effort must be a continuous one. 154 While the OCR and the government are committed to doing our jobs to ensure that members of our 155 community can partake in this industry in a manner that is safe, I would like to conclude by exhorting all of 156 our fine residents in the territory, our family circles, and villages to do their part and understand the law as it 157 applies to them and make sure that everyone including our young people, in particular, have the 158 conversations at home and know how to access the information to make responsible decisions regarding the 159 use of cannabis. 160 CONCLUSION 161 With the support of the 36th Legislature and this Committee, I am certain that the Office of Cannabis 162 Regulation will continue to evince tangible progress so that the vision of a thriving Virgin Islands cannabis 163 industry in which our medicinal, sacramental, and recreational users may safely and healthily partake is fully 164 realized. As I conclude, I would like to extend a public thank you to the Cannabis Advisory Board Chair, Dr. 165 Catherine Kean, and the other Board members for their guidance, the Office of the Governor and 166 specifically the Special Advisor to the Governor the Honorable Positive T.A. Nelson, members of this body 167 for their support, the DLCA team led by Commissioner Nathalie Hodge, and my OCR team for their 168 unwavering support of the OCR. 169 I thank you for the opportunity today to share with your Committee the current status of the Office of 170 Cannabis Regulation, I stand ready to field any questions arising. 171