I do not really know. The only thing i am doing different is i use the normal conda terminal, not power shell, and with administrator rights.
I tried Conda terminal it does not work either
FYI, using the Conda Powershell prompt never works for me. I have to use the Windows Command line. It should be one of the Windows Start Menu options in the Anaconda sub-folder. Alternatively, you can just open a command prompt with run -> cmd.exe, navigate to your Anaconda/scripts folder and just enter activate vm1.