Cannabis micro-biz victory

Cannabis Control Commission extends expedited review to a wide-array of local businesses

By Grant Smith

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In what quickly became a monumental day for local cannabis businesses in the Commonwealth, the state’s Cannabis Control Commission (CCC) voted to extend priority licensing to a wide array of different groups on Thursday (who had, for years, languished in the state’s application process, often costing such businesses thousands of dollars per month in rent on unused properties).

Prior to yesterday’s 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 mid-August of this year, that such a system was creating a defacto market monopoly for those few RMD’s 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 local operators to shut down before even being given the chance to begin operations.

The Commission, to its credit, heard those pleas and, to the shock of many, has taken decisive action to right that fundamental structural inequity.

According to Commissioner Shaleen Title, writing on Twitter, 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 by way of state house protests, direct letter writing campaigns to the CCC and repeated public comments at legislative and regulatory hearings related to the Commonwealth’s cannabis industry over the past year.

One of those activists, who had led a series of protests in support of priority licensing for small businesses, is Ed DeSousa of RiverRun Gardens (a local micro-business applicant). DeSousa was ecstatic following the announcement of the news on Friday; “This action gives us a small advantage to get our businesses up and running. 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”, he said.

DeSousa’s father, BigEd, who runs RiverRun Gardens with his son, was equally moved by the Commission’s 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 went on, “I am literally in tears of joy. 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 Massachusetts, the CCC also voted in favor of a proposal that would allow micro-businesses to deliver their products directly to recreational consumers. This program for micro-businesses, 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. In a further win for advocates, the Commission voted in favor of proposal that mandates that 24-month exclusivity period does not begin until the first “commence operation order”  is approved for either a social equity or economic empowerment applicant.  

In contrast to the initial delivery proposal put forth by the Commission, which would have only allowed delivery companies to deliver cannabis purchased at retail price from an existing recreational dispensary a la a courier service, this change was welcomed 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 micro-businesses, run by social equity or economic empowerment applicants, to provide delivery services directly to consumers;  “The ability for micro-businesses to deliver directly to consumer creates an avenue for local, small-scaled craft operations which is exactly what this industry lacks. 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 micro-businesses, 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).

However, even with the positive changes, some applicants feel there exists continued 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 went on, “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, qualified as it may be, did come a few setbacks as well; 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 (despite a litany of public comments to the Commission which were strongly opposed to the proposal).

The Commission will reconvene the week of  September 23rd 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 as well as a contributor to midnightmass.substack.com & The Young Jurks at anchor.fm/theyoungjurks or wherever else podcasts are streamed. 

This article was produced with support from Midnight Mass & The Young Jurks, your contributions are greatly appreciated and help us deliver more local coverage!

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