(a) Ownership; Minimum Requirements for Cannabis License:(1) An applicant for a Cannabis License must be composed of owners, principals, or members, each of whom is 21 years of age or older and meets the suitability requirements set forth in this chapter.(2) Only owners may control or hold a partnership interest, limited or general, a joint venture interest, or ownership of a share or shares in a Licensee.(3) An applicant for a license that is a Business Entity must be organized under title 13 or title 26 of the Virgin Islands Code.(4) A license may not be held by a person comprised of individuals, any of whom has been convicted of a Disqualifying Felony Offense.(5) An applicant for a license must demonstrate that they possess available funds in their control and financial capital as required by the OCR, which includes evidence in the form of bank statements, irrevocable lines of credit, or the equivalent showing that the applicant has sufficient resources to operate.(6) A licensee shall submit to the OCR for approval all Financial Interests and each holder of a Financial Interest must be approved by the OCR before such Financial Interest holder may accept any portion of the licensee’s revenue, or exercise any of the privileges of the Financial Interest.(7) Residency Requirement. All partnerships, employee cooperatives, associations, nonprofit corporations, corporations, and limited liability companies applying for ownership of a license must be formed under the laws of the Virgin Islands with its principal place of business in the Virgin Islands. Majority Owners must be residents of the Virgin Islands, as defined in § 776(ww). If a licensee does not have a Majority Owner, then at least 51% of the entity holding the license, on a fully diluted basis, must be owned by residents of the Virgin Islands as defined in § 776(ww).
(1) An applicant for a Cannabis License must be composed of owners, principals, or members, each of whom is 21 years of age or older and meets the suitability requirements set forth in this chapter.
(2) Only owners may control or hold a partnership interest, limited or general, a joint venture interest, or ownership of a share or shares in a Licensee.
(3) An applicant for a license that is a Business Entity must be organized under title 13 or title 26 of the Virgin Islands Code.
(4) A license may not be held by a person comprised of individuals, any of whom has been convicted of a Disqualifying Felony Offense.
(5) An applicant for a license must demonstrate that they possess available funds in their control and financial capital as required by the OCR, which includes evidence in the form of bank statements, irrevocable lines of credit, or the equivalent showing that the applicant has sufficient resources to operate.
(6) A licensee shall submit to the OCR for approval all Financial Interests and each holder of a Financial Interest must be approved by the OCR before such Financial Interest holder may accept any portion of the licensee’s revenue, or exercise any of the privileges of the Financial Interest.
(7) Residency Requirement. All partnerships, employee cooperatives, associations, nonprofit corporations, corporations, and limited liability companies applying for ownership of a license must be formed under the laws of the Virgin Islands with its principal place of business in the Virgin Islands. Majority Owners must be residents of the Virgin Islands, as defined in § 776(ww). If a licensee does not have a Majority Owner, then at least 51% of the entity holding the license, on a fully diluted basis, must be owned by residents of the Virgin Islands as defined in § 776(ww).
(b) Control. No person other than an owner has the authority to exercise control over a licensee. It is unlawful and a violation of public safety for any person who is not an owner to have control over the management or day-to-day operations of the licensee. Authority given to a Manager approved by the OCR to manage day-to-day operations of the licensee under the direction of the owners is not considered control for the purposes of this chapter. Whether a person exercises control is determined by whether the person takes or is authorized to take the following actions:(1) Exercises final decision-making authority over operations of the business;(2) Directs the day-to-day operation of the business, except that Managers may direct the day-to-day operations subject to oversight by owners pursuant to a lawful employment contract;(3) Is liable for the taxes and fees or other obligations of the licensee;(4) Acknowledges liability for the Licensee’s taxes and fees;(5) Has authority to disburse funds of the business other than the receipt of regularly replaced items of stock;(6) Makes final policy decisions relative to the operations of the business; or(7) Has voting rights or the right to obtain voting rights in the Licensee.
(1) Exercises final decision-making authority over operations of the business;
(2) Directs the day-to-day operation of the business, except that Managers may direct the day-to-day operations subject to oversight by owners pursuant to a lawful employment contract;
(3) Is liable for the taxes and fees or other obligations of the licensee;
(4) Acknowledges liability for the Licensee’s taxes and fees;
(5) Has authority to disburse funds of the business other than the receipt of regularly replaced items of stock;
(6) Makes final policy decisions relative to the operations of the business; or
(7) Has voting rights or the right to obtain voting rights in the Licensee.
(c) Ongoing Suitability Requirements. An applicant for a license has an affirmative duty to notify the OCR in writing of: (i) any Disqualifying Felony Offense under sections 776(hh) and 791(c)(5) against an owner not later than 10 days of the person’s arrest and not later than 10 days of disposition; or (ii) any change in residency disqualifying any owner pursuant to section 786(a)(7), not later than 10 days after the change. Upon determination by the OCR that an owner associated with the licensee is no longer suitable under this chapter, the licensee has 90 days to remove the disqualified person from association with the license unless otherwise extended by the OCR for good cause. Failure to remove the disqualified person in accordance with this section may be grounds for denial, suspension, revocation, or administrative action.
(d) Requirements Applicable to Financial Interest Holders.(1) Approval Required. A licensee shall disclose all Financial Interests at the time of the initial application, change of ownership, change of business structure, renewal, and at any other time requested by the OCR. A licensee may not permit any person to hold a Financial Interest in a license unless and until the person’s Financial Interest has been disclosed to and approved by the OCR. It is unlawful to fail to completely report all Financial Interests in each license. Failure to seek pre-approval of a Financial Interest or Financial Interest Holder may form the basis for denial or administrative action against the licensee. Each Financial Interest in a license and any amendment, transfer, or assignment of a Financial Interest must be approved.(2) Required Agreement. A licensee seeking to apply for a Financial Interest shall submit a copy of the contract between the licensee and the proposed Financial Interest Holder. The agreement between the parties must be approved by the OCR and is void and of no effect until and unless approved by the OCR. The agreement is subject to rules promulgated by the OCR, which must at a minimum:(A) Prevent the transfer or assignment of the Financial Interest, and must contain a provision requiring that any funds exchanged pursuant to the agreement may not be provided until the OCR approves the agreement in writing;(B) Include representations and warranties by the Financial Interest Holder that its investment is passive and has no entitlement or expectation of being able to have any control, participation in, or investment in the licensee except as permitted in the agreement as approved by the OCR;(C) Include representations and warranties by all parties that the agreement and the relationship between the parties is contingent upon approval of the OCR and that the proposed Financial Interest Holder has no entitlement to or expectation of the OCR approving the Financial Interest;(D) Contain an acknowledgment that the agreement and relationship between the parties is contingent upon the approval of the OCR; and(E) Contain an acknowledgment and agreement by both parties that the decision of the OCR to approve or deny the Financial Interest is final and wholly discretionary and any administrative or judicial review of the determination by the OCR will only occur through licensing or enforcement proceedings involving the licensee.(3) Investigation and Disclosures.(A) The OCR shall conduct a financial investigation as well as a criminal background investigation of all Financial Interest Holders to determine whether the Financial Interest Holder is qualified. After licensure, a Financial Interest Holder must continue to disclose the source of funds for all money relating to the Financial Interest in the license. The OCR must approve these funds prior to the funds being used in any manner by the licensee.(B) As a part of its application, a licensee seeking to obtain approval of a Financial Interest shall provide evidence to establish that the person seeking to become a Financial Interest Holder, including all members of any business entity seeking to become a Financial Interest Holder, are lawful residents of the United States, and shall provide documentation satisfactory to the OCR verifying and confirming the funds used for the Financial Interest were lawfully earned or obtained.(C) The OCR may deny an application for a Financial Interest Holder, or any person who may participate in such interest if its investigation of the applicant results in a determination that the holder is not suitable to hold a Financial Interest, is not of good moral character, or has not fully disclosed its sources of funds or interest in the license.(4) Ongoing Suitability Requirement.(A) The Financial Interest Holder and the licensee is subject to an ongoing duty to disclose in writing to the OCR all events which may reasonably disqualify the Financial Interest Holder from having an Interest in a License, no later than 10 days after receiving notice of the event.(B) If at any time the OCR finds any Financial Interest Holder is not qualified, the OCR may require the licensee to terminate its relationship, including but not limited to all financial relations, with the Financial Interest Holder within a specified time by providing written notice to the licensee. Failure to terminate the relationship and financial ties within the specified time may be a basis for administrative action against the licensee.(5) Requirements—Permitted Interest Holders.(A) An application for a Permitted Interest must be initiated by the licensee and must include a sworn affirmation from the applicant and proposed Permitted Interest Holder on forms prescribed by the OCR that the Permitted Interest Holder will not exercise control, or have any right to control, the license, until such time as the Permitted Interest Holder is licensed as an owner.(B) Conversion from a Permitted Interest to an owner occurs pursuant to rules promulgated by the OCR and the terms of the Permitted Interest Agreement between the Licensee and Permitted Interest Holder, but in no event can the conversion occur until such time as the Permitted Interest Holder meets all qualifications for licensure and ownership pursuant to this chapter and any rules promulgated pursuant to this chapter.(C) The licensee or Permitted Interest Holder may initiate a conversion of a Financial Interest to Owner pursuant to the terms of the Permitted Interest Agreement by application to the OCR.(D) The approval of the Permitted Interest Holder by the OCR is wholly discretionary, and the OCR may, at any time, deny approval of the Permitted Interest or find that the Permitted Interest is no longer qualified. The Permitted Interest shall be terminable immediately upon such determination.(6) Requirements—Reasonable Royalty Holders.(A) An application for a Reasonable Royalty must be initiated by the licensee pursuant to rules promulgated by the OCR and must include a sworn affirmation from the applicant and proposed Reasonable Royalty Holder on forms prescribed by the OCR that the Reasonable Royalty Holder will not exercise control, or have any right to control, the licensee except as otherwise permitted by this chapter or the rules promulgated thereto. Any violation of this subparagraph may be the basis for criminal or administrative action against the applicant for a license or Financial Interest.(B) The approval of the Reasonable Royalty Holder by the OCR is wholly discretionary, and the OCR may, at any time, deny approval of the Reasonable Royalty or find that the Reasonable Royalty Holder is no longer qualified. The Reasonable Royalty shall be terminable immediately upon such determination.
(1) Approval Required. A licensee shall disclose all Financial Interests at the time of the initial application, change of ownership, change of business structure, renewal, and at any other time requested by the OCR. A licensee may not permit any person to hold a Financial Interest in a license unless and until the person’s Financial Interest has been disclosed to and approved by the OCR. It is unlawful to fail to completely report all Financial Interests in each license. Failure to seek pre-approval of a Financial Interest or Financial Interest Holder may form the basis for denial or administrative action against the licensee. Each Financial Interest in a license and any amendment, transfer, or assignment of a Financial Interest must be approved.
(2) Required Agreement. A licensee seeking to apply for a Financial Interest shall submit a copy of the contract between the licensee and the proposed Financial Interest Holder. The agreement between the parties must be approved by the OCR and is void and of no effect until and unless approved by the OCR. The agreement is subject to rules promulgated by the OCR, which must at a minimum:(A) Prevent the transfer or assignment of the Financial Interest, and must contain a provision requiring that any funds exchanged pursuant to the agreement may not be provided until the OCR approves the agreement in writing;(B) Include representations and warranties by the Financial Interest Holder that its investment is passive and has no entitlement or expectation of being able to have any control, participation in, or investment in the licensee except as permitted in the agreement as approved by the OCR;(C) Include representations and warranties by all parties that the agreement and the relationship between the parties is contingent upon approval of the OCR and that the proposed Financial Interest Holder has no entitlement to or expectation of the OCR approving the Financial Interest;(D) Contain an acknowledgment that the agreement and relationship between the parties is contingent upon the approval of the OCR; and(E) Contain an acknowledgment and agreement by both parties that the decision of the OCR to approve or deny the Financial Interest is final and wholly discretionary and any administrative or judicial review of the determination by the OCR will only occur through licensing or enforcement proceedings involving the licensee.
(A) Prevent the transfer or assignment of the Financial Interest, and must contain a provision requiring that any funds exchanged pursuant to the agreement may not be provided until the OCR approves the agreement in writing;
(B) Include representations and warranties by the Financial Interest Holder that its investment is passive and has no entitlement or expectation of being able to have any control, participation in, or investment in the licensee except as permitted in the agreement as approved by the OCR;
(C) Include representations and warranties by all parties that the agreement and the relationship between the parties is contingent upon approval of the OCR and that the proposed Financial Interest Holder has no entitlement to or expectation of the OCR approving the Financial Interest;
(D) Contain an acknowledgment that the agreement and relationship between the parties is contingent upon the approval of the OCR; and
(E) Contain an acknowledgment and agreement by both parties that the decision of the OCR to approve or deny the Financial Interest is final and wholly discretionary and any administrative or judicial review of the determination by the OCR will only occur through licensing or enforcement proceedings involving the licensee.
(3) Investigation and Disclosures.(A) The OCR shall conduct a financial investigation as well as a criminal background investigation of all Financial Interest Holders to determine whether the Financial Interest Holder is qualified. After licensure, a Financial Interest Holder must continue to disclose the source of funds for all money relating to the Financial Interest in the license. The OCR must approve these funds prior to the funds being used in any manner by the licensee.(B) As a part of its application, a licensee seeking to obtain approval of a Financial Interest shall provide evidence to establish that the person seeking to become a Financial Interest Holder, including all members of any business entity seeking to become a Financial Interest Holder, are lawful residents of the United States, and shall provide documentation satisfactory to the OCR verifying and confirming the funds used for the Financial Interest were lawfully earned or obtained.(C) The OCR may deny an application for a Financial Interest Holder, or any person who may participate in such interest if its investigation of the applicant results in a determination that the holder is not suitable to hold a Financial Interest, is not of good moral character, or has not fully disclosed its sources of funds or interest in the license.
(A) The OCR shall conduct a financial investigation as well as a criminal background investigation of all Financial Interest Holders to determine whether the Financial Interest Holder is qualified. After licensure, a Financial Interest Holder must continue to disclose the source of funds for all money relating to the Financial Interest in the license. The OCR must approve these funds prior to the funds being used in any manner by the licensee.
(B) As a part of its application, a licensee seeking to obtain approval of a Financial Interest shall provide evidence to establish that the person seeking to become a Financial Interest Holder, including all members of any business entity seeking to become a Financial Interest Holder, are lawful residents of the United States, and shall provide documentation satisfactory to the OCR verifying and confirming the funds used for the Financial Interest were lawfully earned or obtained.
(C) The OCR may deny an application for a Financial Interest Holder, or any person who may participate in such interest if its investigation of the applicant results in a determination that the holder is not suitable to hold a Financial Interest, is not of good moral character, or has not fully disclosed its sources of funds or interest in the license.
(4) Ongoing Suitability Requirement.(A) The Financial Interest Holder and the licensee is subject to an ongoing duty to disclose in writing to the OCR all events which may reasonably disqualify the Financial Interest Holder from having an Interest in a License, no later than 10 days after receiving notice of the event.(B) If at any time the OCR finds any Financial Interest Holder is not qualified, the OCR may require the licensee to terminate its relationship, including but not limited to all financial relations, with the Financial Interest Holder within a specified time by providing written notice to the licensee. Failure to terminate the relationship and financial ties within the specified time may be a basis for administrative action against the licensee.
(A) The Financial Interest Holder and the licensee is subject to an ongoing duty to disclose in writing to the OCR all events which may reasonably disqualify the Financial Interest Holder from having an Interest in a License, no later than 10 days after receiving notice of the event.
(B) If at any time the OCR finds any Financial Interest Holder is not qualified, the OCR may require the licensee to terminate its relationship, including but not limited to all financial relations, with the Financial Interest Holder within a specified time by providing written notice to the licensee. Failure to terminate the relationship and financial ties within the specified time may be a basis for administrative action against the licensee.
(5) Requirements—Permitted Interest Holders.(A) An application for a Permitted Interest must be initiated by the licensee and must include a sworn affirmation from the applicant and proposed Permitted Interest Holder on forms prescribed by the OCR that the Permitted Interest Holder will not exercise control, or have any right to control, the license, until such time as the Permitted Interest Holder is licensed as an owner.(B) Conversion from a Permitted Interest to an owner occurs pursuant to rules promulgated by the OCR and the terms of the Permitted Interest Agreement between the Licensee and Permitted Interest Holder, but in no event can the conversion occur until such time as the Permitted Interest Holder meets all qualifications for licensure and ownership pursuant to this chapter and any rules promulgated pursuant to this chapter.(C) The licensee or Permitted Interest Holder may initiate a conversion of a Financial Interest to Owner pursuant to the terms of the Permitted Interest Agreement by application to the OCR.(D) The approval of the Permitted Interest Holder by the OCR is wholly discretionary, and the OCR may, at any time, deny approval of the Permitted Interest or find that the Permitted Interest is no longer qualified. The Permitted Interest shall be terminable immediately upon such determination.
(A) An application for a Permitted Interest must be initiated by the licensee and must include a sworn affirmation from the applicant and proposed Permitted Interest Holder on forms prescribed by the OCR that the Permitted Interest Holder will not exercise control, or have any right to control, the license, until such time as the Permitted Interest Holder is licensed as an owner.
(B) Conversion from a Permitted Interest to an owner occurs pursuant to rules promulgated by the OCR and the terms of the Permitted Interest Agreement between the Licensee and Permitted Interest Holder, but in no event can the conversion occur until such time as the Permitted Interest Holder meets all qualifications for licensure and ownership pursuant to this chapter and any rules promulgated pursuant to this chapter.
(C) The licensee or Permitted Interest Holder may initiate a conversion of a Financial Interest to Owner pursuant to the terms of the Permitted Interest Agreement by application to the OCR.
(D) The approval of the Permitted Interest Holder by the OCR is wholly discretionary, and the OCR may, at any time, deny approval of the Permitted Interest or find that the Permitted Interest is no longer qualified. The Permitted Interest shall be terminable immediately upon such determination.
(6) Requirements—Reasonable Royalty Holders.(A) An application for a Reasonable Royalty must be initiated by the licensee pursuant to rules promulgated by the OCR and must include a sworn affirmation from the applicant and proposed Reasonable Royalty Holder on forms prescribed by the OCR that the Reasonable Royalty Holder will not exercise control, or have any right to control, the licensee except as otherwise permitted by this chapter or the rules promulgated thereto. Any violation of this subparagraph may be the basis for criminal or administrative action against the applicant for a license or Financial Interest.(B) The approval of the Reasonable Royalty Holder by the OCR is wholly discretionary, and the OCR may, at any time, deny approval of the Reasonable Royalty or find that the Reasonable Royalty Holder is no longer qualified. The Reasonable Royalty shall be terminable immediately upon such determination.
(A) An application for a Reasonable Royalty must be initiated by the licensee pursuant to rules promulgated by the OCR and must include a sworn affirmation from the applicant and proposed Reasonable Royalty Holder on forms prescribed by the OCR that the Reasonable Royalty Holder will not exercise control, or have any right to control, the licensee except as otherwise permitted by this chapter or the rules promulgated thereto. Any violation of this subparagraph may be the basis for criminal or administrative action against the applicant for a license or Financial Interest.
(B) The approval of the Reasonable Royalty Holder by the OCR is wholly discretionary, and the OCR may, at any time, deny approval of the Reasonable Royalty or find that the Reasonable Royalty Holder is no longer qualified. The Reasonable Royalty shall be terminable immediately upon such determination.