According to state law, it doesn’t matter how many licenses you or anyone else thinks there should be
There have been two misleading stories circulating about Massachusetts cannabis that keep getting repeated and recycled.
The first is an erroneous article published by a reputable Boston-based business publication noting that a cannabis store in Northampton would be the first in the state to close. That story was picked up by other outlets including MassLive and then again by the industry stalwart, MJBizDaily.
In reality, the Northampton store isn’t closed yet and when it does close, it will be the third in the state. A multi-state operator closed its Lynn store at the end of February 2022, transferring their adult-use license to a medical shop in Dorchester. The second store that’s rumored to be closed, following the purported arrest of its owner on a variety of wild charges, is Athol-based Elev8. That would make Northampton the third.
The second story circulating is about how many cannabis stores is the correct number for the City of Boston. It appears a seventh store is seeking to locate near Faneuil Hall, and during a Boston Cannabis Board hearing someone rightly asked whether too many stores were being clustered too closely together. Boston store counts have been in the news since a September Boston.com story, and were the subject of a follow-up reader survey by its Boston Globe parent publication. And with all of this happening against a massive price drop for retail flower, city officials also started considering the correct number of cannabis stores.
I can save them all some time though, because we have the answer—57. Boston can save its money on the well-intended study it is commissioning to determine how many pot shops there should be, because the only thing that matters is the law. When state legislators rewrote the 2016 adult-use marijuana voter initiative, their revised law dictated the minimum number of cannabis stores in each municipality. We’ve discussed this in prior articles, but it’s been a while and that rule bears repeating.
If in 2016 a municipality voted in favor of Question 4 to legalize marijuana for recreational use, Section 3 of Chapter 94G, the “local control” provision, provides that a municipality may not “limit the number of marijuana retailers to fewer than 20 per cent of the number of licenses issued within the city or town for the retail sale of alcoholic beverages not to be drunk on the premises where sold under section 15 of chapter 138.” (Section 15 liquor licenses are alcohol retailers who sell liquor not to be consumed on premise. “On premise” means a restaurant, bar, night club, or similar venue where “pouring” is allowed.)
Coincidently, for research on another upcoming story, we recently secured a copy of the state’s active alcohol license list from the Massachusetts Alcoholic Beverage Control Commission (ABCC). We filtered that list for (a) Boston and (b) off-premise retail licenses and found 282 active off-premise licenses in the city. Following the law, we multiplied that by 20% to arrive at 56.4 licenses. Fractions get rounded upward; hence, barring a citywide public vote to restrict license counts (which is unlikely for several reasons including that Boston voted overwhelmingly in support of Question 4 and nationally cannabis support has only increased since 2016), Boston will have 57 cannabis shops.
The only way to change that number is for the section 15 license count to drop.
It’s simple math. It’s the law.
Can I bill the city for the time, trouble, and expense we just saved them?
David Rabinovitz is a cannabis business consultant in Massachusetts and involved in various cannabis ventures. He is a former Director and Treasurer of MassCann (the Massachusetts Cannabis Reform Coalition), a past Trainer for the Massachusetts Cannabis Control Commission Social Equity training program, and the original host of The Green Rush cannabis business talk show on ProCannabis Media. David speaks at various industry events on creating winning financial presentations that investors love. David’s industry insights and analysis are featured in several media outlets. Connect with David on LinkedIn at https://www.linkedin.com/in/davidrabinovitz/ or reach out to him at firstname.lastname@example.org or DavidR@CannaVentureLabs.com