Re: Opposition to dismantling current codified ownership limits
Last week, we covered the leadup to and testimonies given at a hearing held by the Massachusetts Joint Committee on Cannabis. In the wake of that consequential event, we are also publishing some letters that people submitted to the legislature on a range of issues. Below is the testimony of Cannabis Control Commission Commissioner Kimberly Roy, which she offered in her personal capacity, not as a representative of the CCC. -TJM Editors
Dear Chair Gomez, Chair Donahue, and Honorable Members of the Committee:
Thank you for the opportunity to provide written testimony. My name is Kimberly Roy, and I currently serve as a Commissioner on the Cannabis Control Commission (CCC). I testify today in my personal capacity to express strong support for S.88, An Act protecting cannabis equity businesses by enforcing ownership limits, sponsored by Senator Liz Miranda.
Current efforts to dismantle codified ownership limits in the regulated Massachusetts cannabis industry are not de minimis. There are numerous unintended consequences. Such actions may also potentially undermine and ultimately disenfranchise the promise made to voters through the passage of Question 4 to support communities most impacted and harmed by previous cannabis prohibition.
By contrast, current statutory ownership limits help to create a Massachusetts cannabis industry that encourages full participation, competition, locally owned and operated entrepreneurship and serve as a cornerstone of the Legislature’s vision to prioritize and promote public health, safety, and economic opportunity, all while fostering a diverse marketplace.
It is enshrined in the CCC’s mandate to establish “procedures and policies to promote and encourage full participation in the regulated marijuana industry by people from communities disproportionately harmed by prohibition.”
Current proposals to lift the current license cap threaten to undermine these goals, harm those we are mandated to help and as a by-product may create a “Walmart effect” supply chain where market consolidation, buying power and price manipulation can be controlled by the wealthy few.
Unintended consequences of removing current ownership limits may lead to an increased risk of:
-Market consolidation
-Price manipulation/ Price undercutting
-Significant wholesale purchasing power over locally owned and operated Social Equity
Businesses
-Exacerbation of a staggering sixty-nine-million-dollar Accounts Receivable quagmire currently plaguing the Massachusetts regulated cannabis industry
-Predatory joint venture agreements
-Devaluation of current equity licenses as seen in other jurisdictions (Arizona)
-Reduced patient and consumer access
-Lack of locally owned and operated licensees and product offerings
-Possible extinction of small, local, and social equity businesses
-Lack of investment into local marginalized communities
-Undermine an already fragile market
-All without access to unbiased data and metrics to evaluate the current state of industry equity
By contrast, S.88, An Act protecting cannabis equity businesses by enforcing ownership limits; will promote fairness, transparency and accountability in the Massachusetts regulated industry by:
-Mandating a comprehensive CCC ownership audit every five years
-Explicitly authorize the State Auditor and Inspector General to investigate compliance
-Establishing a whistleblower process and anonymous tip line
-Increase transparency through improved public access to ownership data
As a Commissioner, I have consistently advocated for a tip line and greater transparency to respond to industry concerns and uphold the law.
Supporting S.88, An Act protecting cannabis equity businesses by enforcing ownership limits; is especially important now. Delivery operators are only beginning to benefit from recent regulatory reforms. The first rounds of the Cannabis Social Equity Trust Fund (CSETF) grants have only recently been awarded and the impact of capital infusion to equity operators provided by the CSETF has not been fully evaluated. Social Consumption licenses are yet to commence but are soon poised to offer an exclusive opportunity to equity businesses which will also contain a retail component. Lifting ownership limits now, may potentially destabilize this progress.
I respectfully request, lawmakers maintain current ownership limits, improve transparency on license ownership, establish a tip line for reporting violations, and continue to pass bills that strengthen full participation in the Massachusetts cannabis industry.
With the passage of Question 4, voters approved equity, opportunity, and fair competition in Massachusetts’ cannabis industry, not a marketplace sustained and dominated by just a few wealthy corporations.
Thank you for your time and consideration of my testimony.
Sincerely,
Kimberly Roy
Commissioner, Cannabis Control Commission
