Big cannabis and anti-cannabis politicians aim to quietly sink cannabis equity delivery proposal
Operators feel they "bought-a-law" in the summer of 2017 when Question 4 was amended by state lawmakers
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By Grant Smith
For those who have been following the ongoing regulatory update at the Massachusetts Cannabis Control Commission, the August decision to expand the existing format for adult use delivery came as no surprise. That existing uber-eats model, advocates said at the time, was financially untenable and poised to render a line of equity companies bankrupt while brick and mortar dispensaries reaped huge windfalls by way of their mandated middle man status.
Those equity advocates, in turn, were heard and acknowledged when the Commission made its preliminary decision at that August 28th hearing to offer two formats for adult use delivery; the courier model would still be offered, Commissioners said, but they would also vote 4-0 in favor of a second delivery format (so-called "wholesale delivery operators") that would allow delivery companies to purchase products at wholesale from other marijuana enterprises - such as cultivators or manufacturers - store that product in a secure vault and then deliver it to consumers directly.
That proposal, in turn, was made public and subject to a two week public comment period in front of the CCC. That public comment period ended on the 15th of October and today the CCC published the full text of those comments it had received.
However, after reading through some 30 or so corporate dispensary comments seeking to undermine the proposed format for adult use delivery, a sordid theme became clear quite quickly; these operators feel they had "bought-a-law" in the summer of 2017 when question 4 was amended by the lawmakers on Beacon Hill and were thus designated as mandated middle men should any delivery model be proposed by the Commission.
Setting aside that they are wrong as a matter of law from my perspective, for those wealthy moneyed interests to suggest that the only delivery model that should be able to exist is an "uber eats" style courier license, therein forcing equity delivery companies to hand over all profits on the sale of each order to the brick and mortar dispensary while attempting to get by on only the delivery fee, is truly shameful.
When the the CCC made the decision back in August to expand the delivery license category to two formats, leaving the courier option while also creating a model that would allow equity delivery applicants to purchase product at wholesale from cultivators and manufacturers, store that product in a secure vault, and then deliver orders directly to consumers (as can be done currently by a microbusiness with a delivery endorsement), that decision was celebrated by grassroots activists and operators statewide.
That expanded proposal, however, removed the mandated middleman status of brick and mortar dispensaries within the delivery framework and thus threatened their existing market monopoly (which, in turn, explains why so many corporate operators have brought their considerable resources to bear in an attempt to sabotage that proposal).
To make such an attempt at sabotaging a proposal meant to engender equity in cannabis licensing, in particular in light of the data provided by equity delivery applicants Aaron and Janelle Goines which demonstrated that such a courier model would render any operator bankrupt within 6-12 months under even the most generous of operational agreements, reflects the worst form sordid corporate entitlement (something that has no place in this state).
Speaking after reading some of the public comments by big cannabis attacking the equity delivery model, Mr. Goines (a Social Equity applicant seeking a delivery license) said;
"We are here fighting for the [wholesale delivery model] because dispensaries were uninspired to creatively and fairly engage in authentic negotiations with SEs/EEs regarding partnerships in delivery. Apparently fair and equitable treatment is a bridge too far for dispensaries and the corporate MSO entities that have a stranglehold of this industry. They appear to be more than content to allow SEs/EEs to wither on the vine as the exclusivity period expires, at which point the dispensaries can own delivery all to themselves [through limited delivery licenses]. The funny thing is that I wonder how outraged they would be if they were allowed to wholly own a delivery operation during exclusivity."
When asked why only allowing the "uber-eats" style "limited deliver model" would be so dangerous, Mr. Goines went on;
"In so many examples presented to me by [LDL] SEs/EEs, many of the retailers request 9.9% equity of the SEs/EEs company in exchange for holding their hand, walking them into town hall, and introducing them to the Town Administrators to “help” them with an HCA [Host Community Agreement]. [There is never] any monetary investment attached to the 9.9%. That is what is called a predatory offer. Similar to the tenant farmers, something had to be done. They formed the Southern Tenant Farmers' Union (STFU) was a federation of tenant farmers formed in Arkansas in 1934 with the aim of reforming the crop-sharing system of sharecropping and tenant farming. SEs/EE's had to fight to have a license [WDL] created that would allow them the opportunity to have a fair shot at creating generational wealth for themselves and their families, just like any other license has the same opportunity."
Compounding the community outrage, those corporate operators who sought to undermine the WDL license mode have once again gone back to their unholy partnership with anti-cannabis lawmaker Hannah Kane in an attempt to, apparently, protect their own profits at all costs. Rep. Kane was the same lawmaker who worked with the "Commonwealth Dispensary Association" to propose the abhorrent "task force bill" from last year (H. 4168), that would have brought together the state police and tax agencies to target the unregulated market in order to protect dispensary profits.
Anyone who would support a return to the drug war in that way, or who would work to undermine the expanded equity model for adult use delivery simply to protect their own profits, disgraces this grassroots community and everything it stands for in my opinion.
The Commission will hold a 10AM public meeting to discuss the final format for adult use delivery in Massachusetts tomorrow, 10/20/2020, and The Young Jurks will provide live coverage, with a pre-show, via facebook.com/theyoungjurks. The large amount of comments in favor of the existing adult use delivery proposal (including the wholesale delivery format), and the spattering of corporate backed comments opposing that proposal, are expected to play at least some role as the discussion unfolds.
With the stakes so high, for both equity and a fair market, tomorrow's public meeting of the CCC will be historic. Many grassroots equity advocates have fought for years to bring adult use delivery, including a wholesale delivery format, to fruition and these last hours before a final decision is reached are no doubt nerve wracking.
Following tomorrow's discussion, a formal vote to ratify those updated regulations into law will occur on October 28th (also at 10am) and applicants hope both of the new license types will be fully implemented by Quarter 1 of 2021.
Photo: Marco Allasio from Pexels