Massachusetts lawmakers delay recreational launch

Cultivator applications may be pushed back to 2020

Massachusetts has all the makings for a prosperous cannabis market. Unlike most other states that have legalized marijuana, Massachusetts is within driving distance of the nation’s most densely populated urban centers. Boston itself is home to more than 30 colleges and a steady flow of tourists, so it’s no wonder that legal marijuana is expected to generate more than a billion dollars of revenue in the commonwealth by 2020.

Massachusetts voters passed a comprehensive and sensible recreational marijuana law in November 2016, sowing the seeds for explosive economic growth and promising an end to the black market. But just weeks after the law took effect, a handful of state lawmakers gathered behind closed doors and decided to delay the rollout of the recreational industry by rewriting the law.

The Legislature’s delay affects all aspects of the new law and establishes a new time frame for various steps required for the program’s rollout:

– The governor must make initial appointments to the Cannabis Advisory Board, a panel without regulatory authority that makes recommendations to the Cannabis Control Commission by Aug. 1;

– The state treasurer must make initial appointments to the Cannabis Control Commission by Sept. 1;

– The commission must promulgate marijuana regulations by March 15, 2018;

– The commission must begin accepting applications for dispensary, cultivator and/or product manufacturer licenses from entities that hold final or provisional registrations to operate medical marijuana locations from the Department of Public Health under the medical licensing regulations by April 1, 2018;

– The commission must begin accepting licensing applications for marijuana testing facilities by April 1, 2018;

– The commission must begin accepting applications from all retail and manufacturer applicants by April 1, 2019; and

– The commission must begin accepting applications from all cultivator applicants by April 1, 2020.

Boston State House. By Emitchell (Own work) [CC BY-SA 3.0 (http://creativecommons.org/licenses/by-sa/3.0)], via Wikimedia Commons

At a Glance

In November 2016, Massachusetts voters approved the Regulation and Taxation of Marijuana Act with 53.6% of the vote. The act legalizes possession of up to one ounce of cannabis for people age 21 and older and establishes a Cannabis Control Commission with the authority to license, regulate and tax marijuana businesses.

The act also:

– Sets a 12% maximum tax rate on marijuana establishments;

– Allows registered dispensaries to operate as retail outlets and permits marijuana product manufacturing or cultivation to be located on the same premises;

– Allows entities that have received a provisional license from the Department of Public Health under the medical marijuana program to apply one year before any other applicant for one recreational retail, product manufacturing and/or cultivation license.

The Joint Committee on Marijuana Policy is responsible for suggesting changes to the current law and has begun considering dozens of bills, which range from small tweaks to a complete repeal. One of the industry’s concerns is that the new law will snatch regulatory control away from the state treasurer and place it in the hands of an independent commission destined to become an industry lap dog.

Increased local control is perhaps the biggest and most likely threat to the Massachusetts recreational industry. Under the ballot law, municipalities can pass reasonable zoning measures related to cannabis operations. But any severe limitation — prohibiting an entire type of establishment, reducing the number of marijuana retailers to fewer than 20% of the number of liquor retail licenses issued or allowing fewer retailers than medical marijuana treatment centers — requires a majority vote of the residents in the municipalities. At least 10 municipalities have already banned recreational marijuana establishments and more are soon to follow. Other towns have delayed retail marijuana through temporary moratoria, insisting they need additional time to develop zoning rules and regulations.

Governor Charlie Baker wants greater local control. He worries about the business density dilemma that has developed in Colorado, where marijuana retailers are concentrated in low-income neighborhoods. To avoid this problem in Massachusetts, Baker favors capping the number of retailers per neighborhood.

However, if municipalities are free to impose bans without a popular vote, wealthy neighborhoods will slam their doors and the recreational shops will gravitate toward lower-income neighborhoods that need the revenue. Additional local control may undermine the fundamental policy driving legalization because the black market will continue to thrive in places where adult users cannot access regulated retail marijuana.

Yoni Bard is an associate in Foley Hoag’s litigation department, where he represents individual and corporate clients in a broad range of civil disputes

(www.massachusettsmarijuanacounsel.com). He has advocated for low-income clients before the U.S. District Court and the Boston Immigration Court. He also served as a judicial intern for the U.S. Department of Justice within the Executive Office for Immigration Review.

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