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Date: 11/4/2020
LONGMEADOW/SPRINGFIELD – Massachusetts is considering a change to the way residents can purchase cannabis in the state and that has lawmakers and business owners speaking out.
On Sept. 24, the state Cannabis Control Commission (CCC) accepted draft regulations that would establish two new licenses for the cannabis industry, a license for home delivery of cannabis and cannabis products and a second license that would establish “businesses to purchase marijuana and finished marijuana products at wholesale from Cultivators, Craft Marijuana Cooperatives, Product Manufacturers, and Microbusinesses, and sell individual orders directly to consumers,” according the CCC’s press release on the issue. The regulations around “Marijuana Courier” and “Marijuana Delivery Operator” licenses were adjusted further on Oct. 20.
“The proposed regulations are devastating for brick and mortar dispensaries and will put us out of business,” said Chris Mitchem, owner of Diem, a cannabis dispensary company with two locations in his home state of Oregon and one in Worcester. Two more Massachusetts locations, in Springfield and Lynn are in various stages of development.
Mitchem mortgaged his home to open the Worcester location, which cost $2.1 million to get off the ground. “I nearly lost everything,” he said. And now, “I think [the delivery model] will completely shut us down in three years,” he said. “I’ll definitely have to rethink my investments in Massachusetts.”
The purpose of the delivery licenses, at least in part, is to even the playing field for entrepreneurs who do not have the large amount of capital it takes to start a dispensary. The CCC states that part of its mission is to “ensure meaningful participation in the legal cannabis industry by communities that have been disproportionately harmed by marijuana prohibition.”
To that end, the delivery licenses will be exclusively available to Certified Economic Empowerment Priority Applicants (EEAs) and Social Equity Program (SEP) Participants for at least three years. The SEP is a free program that “provides education, skill-based training, tools, and licensing benefits for those most impacted by the War on Drugs, marijuana prohibition, and disproportionate arrests and incarceration,” while the EEAs are “applicants seeking retail, manufacturing, or cultivation licenses who were able to demonstrate experience in – or business practices that promote – economic empowerment in disproportionately impacted communities.”
Mitchem said, “The irony is, I'm a huge supporter of economic empowerment programs. The original model they were proposing was great. It was a currier plan where delivery drivers would partner with local dispensaries.”
Instead, Mitchem likened the current proposal to Amazon warehouses shipping deliveries to a wide area. He claimed that there were huge cultivators who wanted to partner with minority delivery owners and deliver to cities and towns across the state.
“Municipalities are set to lose a lot if this goes through,” Mitchem said.
State Rep. Brian Ashe, whose district includes parts of East Longmeadow, Hampden, Longmeadow and Monson, has similar concerns. In a letter he sent to the CCC on Oct. 15, Ashe called dispensaries “the cornerstone” of the state’s cannabis industry. He touted the host community agreements as mitigating impacts while providing benefits to public services. He also lamented the loss of the 3 percent tax on gross sales revenue that it would have collected were the sales were from an in-town dispensary.
Ashe noted that he also has public safety concerns. “If we’re letting individuals cross municipal lines with marijuana, they could be robbed. We could be putting people in danger.” The draft regulations seek to address this concern by prohibiting vehicles used for commercial transport from signage or marketing indicating that it carries marijuana.
He said there are other questions about delivery sales to residents of cities and towns that have voted not to allow sales in their municipality, however, it should be noted that section 500.145 (l) of the draft regulations allows sales only in municipalities which allow marijuana sales in its borders or has otherwise notified the CCC that deliveries may made there.
Other considerations that have been written into the draft regulations include limiting individuals and businesses to two licenses and a limit of one warehouse per marijuana delivery operator, curtailing the hours of delivery and revisiting the provisions for marijuana delivery operators two years after the first entity begins operations.
Ashe also opposes the speed with which the regulation is being considered and questioned why the issue was being “rushed” to a vote before three commissioners who are leaving the regulatory body are replaced.
“It took quite a long time to pass [recreational marijuana sales], and for good reason. We want to make sure it’s done in a responsible way,” Ashe said. He noted that the dispensary sales model has only been in place for a few years and the full effect of that change has yet to be seen.
"This may be legitimate and something we could and should do,” Ashe said of the delivery licenses, “but I’d hate to see us not dot all our Is and cross our Ts. I’d rather see us give it its due diligence, and if it’s the right thing, it’ll happen anyway or we may find something better. What we don’t know could come back and bite us.”
A virtual hearing on the topic is scheduled for Nov. 13. The final vote will be on Nov. 30.
For more information visit mass-cannabis-control.com.