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USVI to Open New Market for Recreational Cannabis

Publications | February 21, 2023

On January 18, 2023, the Governor of the U.S. Virgin Islands signed the Virgin Islands Cannabis Use Act (Act No. 8680) into law.

The Cannabis Use Act legalizes the recreational use of cannabis for all individuals over 21 years old in the Virgin Islands, a U.S. territory in the Lesser Antilles of the Caribbean. The Cannabis Use Act also creates a licensing system for the cultivation, manufacture, and distribution of cannabis to be administered by the Office of Cannabis Regulation within the Virgin Islands Department of Licensing and Consumer Affairs. 

The Office of Cannabis Regulation is charged with promulgating rules and regulations related to the “cultivation, dispensary, testing, licensing, and use of Cannabis” within 180 days of enactment of the Cannabis Use Act. It is also responsible for issuing a limited number of licenses for the commercial cultivation, manufacture, distribution, and sale of cannabis within the Virgin Islands. Such licenses will be restricted to individuals that are “residents of the Virgin Islands” and business entities that are incorporated and headquartered in the Virgin Islands. The website of the Office of Cannabis Regulation currently advises that it is not yet accepting applications for licensing of medicinal and recreational cannabis dispensaries.

The Virgin Islands joins 21 states, the District of Columbia, Guam, and the Northern Mariana Islands in legalizing the recreational sale and use of cannabis. Kutak Rock has attorneys licensed to practice in the Virgin Islands and almost every state that has legalized cannabis, and maintains offices in many of those states. Kutak Rock’s National Cannabis Practice Group understands the complexities and challenges involved in representing startup companies or less established businesses. The team has the knowledge, understanding, and experience necessary to navigate clients through the myriad of challenges presented by state laws and local government rules and regulations, specifically the conflicts between federal, state, and local law.

Among these attorneys is Kutak Rock partner Dwyer Arce. Dwyer currently serves as President of the Virgin Islands Bar Association, Chair of the Virgin Islands Bar Foundation, and as State Chair for the Virgin Islands in the American Bar Association Council of Appellate Lawyers. Before joining Kutak Rock, Dwyer served as a law clerk for the Supreme Court of the Virgin Islands. He is an authority on matters of Virgin Islands law and the legal issues arising from the relationship between the federal government and America’s overseas territories.

Another member of the National Cannabis Practice Group is Kutak Rock partner Gil B. Rosenthal. Gil has worked with investors and operators of cannabis-related enterprises, providing corporate, tax and M&A advice. Since 2013, Gil Rosenthal has used his broad experience to advise clients in the cannabis industry nationally on regulatory issues, intellectual property, tax, employment, and other general corporate issues. His clients include medical and retail cultivators and distributors and manufacturers. Because of his tax and international trade background, Gil has been able to provide a unique perspective to cross-border transactions in the cannabis industry. Gil was recently recognized as one of the top global cannabis lawyers by the Cannabis Lawyers Directory for 2022/2023.

If you have any questions regarding the Virgin Islands Cannabis Use Act, please contact a member of Kutak Rock’s National Cannabis Practice Group.

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