Cannabis Control Commission extends expedited review to a wide-array of local businesses
In a monumental moment for local cannabis businesses in the Commonwealth last week, the state’s Cannabis Control Commission (CCC) voted to extend priority licensing to a wide array of different groups who had for years languished in the state’s application process, costing many applicants thousands of dollars per month in rent on unused properties.
Prior to the shocking change of heart, the only applicants extended expedited licensing priority were those who owned/operated an existing state medical dispensary (RMD). As a result, a litany of different small business owners provided testimony to the commission in August, arguing that such a system was creating a defacto market monopoly for the few RMDs able to obtain a recreational cannabis license.
Compounding that problem, those local businesses waiting in the CCC’s backlogged queue had to pay rent on property simply to have their application in front of the commission (property which, in turn, was going unused at a cost of up to $6,000 per month, according to some local operators). These costs, as the commission heard time and again from members of the public on the verge of tears, forced many to shut down before even being given the chance to start operating.
To its credit, the CCC commissioners heard those pleas and, to the shock of many, took decisive action to right that clear inequity. Writing on social media, Commissioner Shaleen Title noted that the categories of licensing extended priority status by the commission are as follows: “Social equity program participants, outdoor cultivators, craft cooperatives, micro-businesses, Minority Business Enterprises, Women Business Enterprises, and Veteran Enterprises.”
This expedited priority is something local activists had been pursuing via Beacon Hill protests, direct letter-writing campaigns to the CCC, and repeated public comments at legislative and regulatory hearings related to the cannabis industry over the past year. One of those activists, who led a series of demonstrations in support of priority licensing for small businesses, is Ed DeSousa of RiverRun Gardens, a local microbusiness applicant. DeSousa was ecstatic following the announcement.
“This action gives us a small advantage to get our businesses up and running,” he said. “We have been running with very little capital, so the less wait we have, the better chance to compete in a market that was initially set up against us.”
DeSousa’s father, Big Ed, who runs RiverRun Gardens with his son, was equally moved by the decision: “I am very, very proud of my son and what he, along with so many other advocates, have done for this industry.” The elder DeSousa continued, “What the ‘little guys’ accomplished against corporate greed and corruption is historical.”
In a further decision with the potential to fundamentally alter the current structure of retail recreational cannabis sales in Mass, the CCC also voted in favor of a proposal that would allow microbusinesses to deliver products directly to recreational consumers. This program for microbusinesses, called a “delivery endorsement,” will only be available to participants in the state’s social equity or economic empowerment programs for the first 24 months. And in an additional win for advocates, the commission voted in favor of proposal which mandates that the 24-month exclusivity period does not begin until the first “commence operation order” is approved for either a social equity or economic empowerment applicant. All of which comes in contrast to the initial delivery proposal put forth by the CCC, which would have exclusively allowed delivery companies to deliver cannabis purchased at retail price from an existing recreational dispensary a la a courier service. As such, this change was applauded by local advocates and consumer groups alike.
Joe Gilmore, President of the Massachusetts Recreational Consumer Council, said the following in regards to the positive impact of allowing local microbusinesses, run by social equity or economic empowerment applicants, to provide delivery services directly to consumers. “The ability for microbusinesses to deliver directly to consumer creates an avenue for local, small-scaled craft operations which is exactly what this industry lacks,” Gilmore said. “The more competitive the adult-use market becomes, the better the quality of products will be for the consumer.”
While the “courier” model for delivery will still be an option (and will also be exclusive to social equity or economic empowerment applicants for the first 24 months), the slim profit margins which come along with being forced to deliver cannabis purchased at retail price from an existing dispensary will most likely prove too high a barrier to entry for most prospective applicants. Nonetheless, the change to microbusinesses, in particular, has resulted in many local cannabis operators revising their proposed business plans (as their operations will now be far more sustainable with that option to provide retail sales, via delivery, direct to consumers).
Even with such positive changes, some applicants feel there are still significant barriers to entry at the municipal level. Chauncy Spencer, of The 420 Mattapan, said the following about the new priority licensing: “It certainly creates an easier pathway for the processing of small businesses and social equity applicants licenses at the state level. However, all licensing really starts at the municipal level, so until there is a focus on addressing the indifference that municipalities have toward black and brown entrepreneurs we are still left out of meaningful participation.” Spencer continued, “The type of change I’d like to see requires legislative action and many lawmakers seem to be ignorant to the plight of EEs and SEs in this space.”
With the positive came some notable setbacks as well. For starters, delivery of recreational cannabis will only be allowed in towns which either 1) have an existing recreational dispensary; 2) have an existing microbusinesses; or 3) opt-in, by way of a vote of local officials, before June of 2020.
Furthermore, recreational delivery drivers will be required to wear body cameras. The video produced by those cameras will need to be stored for 30 days (reduced from 90 days in the initial commission proposal) and will also need to be provided to law enforcement in the event on a request related to a bonafide ongoing investigation.
This body camera proposal was highly controversial (in particular in light of the fact that police unions across the state have near-universally rejected proposals for their officers to wear such cameras), and the CCC passed the requirement by a vote of 4-1 over the vehement objections of Commissioner Title (and despite public comments to the commission which were strongly opposed to the proposal).
The commission will reconvene the week of September 23 to formally vote on the final regulations for the medical and recreational cannabis programs. The new rules will then go into effect once they are formally promulgated by the Secretary of State’s office.
Grant Smith is a Massachusetts medical cannabis patient, founder of Mass Patients for Home Delivery, and a contributor to midnightmass.substack.com and The Young Jurks. You can listen to The Young Jurks at anchor.fm/theyoungjurks or wherever else podcasts are streamed. This article was produced with support from Midnight Mass and The Young Jurks, where your contributions are greatly appreciated and help us deliver more local coverage.