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Cannabis Regulators Address “Threat” Posed By Delinquent Payments

CCC members discuss accounts receivable issue, review potential fixes, and open up public comment period

No matter who you’re speaking with in the Massachusetts cannabis industry these days, it’s likely that you’ll run into the topic of overdue invoices and the strain they are putting on companies of all kinds.

Cannabis Control Commission members have been looking into potential solutions to and help for the delinquent payment problem, and offered some relevant updates during this week’s public meeting. As Commissioner Kimberly Roy explained, reading from a slide …

“Delinquent payments are becoming a threat to the licensed cannabis industry according to many businesses and stakeholders across the country. Preliminary findings from a comprehensive study conducted by Whitney Economics shed light on the $3.8 billion dollar issue plaguing cannabis operators and ancillary businesses nationwide.

“Challenges such as delayed payments and bad debt jeopardize financial stability, creating a ripple effect throughout the supply chain in Massachusetts. This phenomenon has been called a ‘self-fulfilling negative shockwave.’”

As Roy noted, “The topic was raised at recent roundtable discussions held with Commissioners hosted by the Cannabis Business Association (MassCBA) and Massachusetts Cannabis Coalition.” In response, the “Commission’s Government Affairs and Policy Team put together a comprehensive memorandum outlining the size of the problem for the national industry and measures considered by other jurisdictions including California, New York, Colorado, New Jersey, Michigan and others.”

Furthermore, according to the presentation, “Commissioners Roy and [Bruce] Stebbins also met with leadership from the Massachusetts Alcohol Beverage Control Commission at the urging of Massachusetts Licensed Operators.” “In discussions with the ABCC,” they “learned that they have secured, from an outside vendor, a platform for alcohol distributors to post delinquent payments and identify those vendors. Distributors pay to have access to the platform and there is no expenditure by the ABCC.” With that system, “Retailers or delinquent payers are not prohibited from continuing to make purchases but may require all future deliveries be paid at the time of delivery,” while “Delinquency does not jeopardize the ability for an ABCC licensee to renew their license.”

As for the current options options on the table for those seeking payment, the CCC presentation noted the obvious: “Licensees are allowed to negotiate with delinquent business partners to offer new terms or payment arrangements,” “may decide to end any further sales to any business customer,” or “can certainly seek relief through the Massachusetts Court System or other means.”

Regarding “next steps and options,” the CCC noted that it “needs to gain a better understanding and breadth of the issue and its impact here in Massachusetts before deciding on any changes to current policy and regulations.” To that end, members moved to “Direct the Commission to formulate a general comment question and have it posted for a two-week response.” “The question[s] will be sent to all currently operating licensees,” and the agency “will consider making a public technical assistance session available for all licensees on the topic of accounts receivable, responsible strategies to work with suppliers and delinquent customers, and other proactive tactics.”

Specifically, commissioners will ask stakeholders to respond to the following questions:

  • How does the issue of outstanding accounts receivable impact your operation?

  • Please quantify the outstanding accounts receivable currently owed to your business (e.g., the average, or total, amount of money that is still unpaid after any agreed upon terms have expired between you and your delinquent clients).

  • What proactive measures have you undertaken to minimize your financial risk to unpaid invoices?

  • Should the Commission reform its regulations to establish a means for industry to identify delinquent clients?

  • What additional steps should the Commission consider to assist licensees with this issue?

Respondents can submit their answers via email to the commission at with the subject heading “Accounts Receivable.”

“During my roundtables and panels, it’s becoming an issue that is being raised frequently enough that I am happy [commissioners] have decided to look into it and take it on,” Acting Chair Ava Callender Concepcion said.