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Massachusetts House lawmakers this week released their long-awaited plan to restructure the state’s embattled Cannabis Control Commission, but some marijuana retailers say it contains provisions that would be a “death blow” to the industry.
The agency tasked with regulating the state’s $8 billion marijuana industry has faced calls for reform following allegations of workplace toxicity, infighting and perceived regulatory delays. The House proposal would reduce the five-member commission to three, and give more governing power to its chair.
All three members would be named by the governor, cutting out the current appointing responsibilities of the attorney general and treasurer.
“I think by clarifying this language, and also streamlining the appointing authorities, it becomes clearer and allows them to operate on a much more nimble footprint,” said Worcester Rep. Dan Donahue, chair of the Joint Committee on Cannabis Policy.
The board is already down to three members now, after Treasurer Deborah Goldberg fired commission chair Shannon O’Brien and commissioner Nurys Camargo’s resignation.
But tucked into the legislation is language that would let a single company to own up to six licenses, up from the three currently allowed.
The three-license cap was intended to protect small businesses and keep large, multi-state operators from dominating the market in Massachusetts. Raising it is an “existential threat,” according to Kevin Gilnack, deputy director of the advocacy organization Equitable Opportunities Now.
“ They’re clearly trying to pair it with things that the industry wants and that aren’t controversial, and hoping that people won’t make a fuss about the fact that we’re selling out the entire industry,” Gilnack said. “It’s a very obvious Trojan horse.”
The license limits “have been one of the strongest and most effective ways to support small businesses, promote equity, and protect the public,” said former commissioner Shaleen Title, one of the agency’s inaugural members.
Raising the cap is “a gift to corporate cannabis and a death sentence for local and social equity businesses,” said Equitable Opportunities Now co-founder Shanel Lindsay a statement. When it comes to buying inventory, “How is someone with one, two, or three stores supposed to compete with someone buying for six or more stores?”
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Kobie Evans is the co-owner of Pure Oasis, the first recreational cannabis dispensary to open in Boston. He said the current license cap allows small businesses like his to compete.
If this new bill passes, “a lot of that goes away and we fall prey to the larger multi-state operators that have the ability to take over the industry,” he said.
Donahue, of the cannabis policy committee, defended the proposal, saying he sees six licenses as a “reasonable” number that won’t decimate small operators.
“We don’t want multi-state operators cornering the market or having a monopoly at all,” he said.
Not everyone in the industry is against raising the license cap.
“It’s really a compromise between the two sides,” said Ryan Dominguez, who leads the Massachusetts Cannabis Coalition trade group. “Now there’s opportunities for smaller businesses to merge together and then form a bigger company that will have more buying power.”
A spokesperson for the state cannabis commission declined to comment on the details on the bill, saying the agency “neither lobbies for nor against legislation.”
However, the cannabis regulator looks forward to “continued collaboration with the Legislature that would allow the Commission to address needed statutory updates in pursuit of our mission to oversee a safe, equitable cannabis marketplace in Massachusetts.”
Cannabis operators were more positive about other changes proposed in the bill, which would allow customers to buy and possess more product, and loosen regulations for medical marijuana businesses. Dominguez said those provisions would act as a “life raft” to companies struggling to survive as the wholesale price of marijuana plummets.
But even with those changes, and with questions swirling around the commission’s “unclear and self-contradictory” regulatory structure, some advocates would rather the Legislature do nothing than raise the cap on retail licenses.
Gilnack of Equitable Opportunities Now said he’ll urge members on the Senate side of the cannabis policy committee to oppose lifting the cap.
“Most cannabis businesses would be better off if the Legislature did nothing,” he said.
The agency tasked with regulating the state’s $8 billion marijuana industry has faced calls for reform after allegations of running a toxic workplace and reports of regulatory delays. But small business owners say raising the license cap to 6 from 3 would be a “death blow.” Read More
