Measure that could impact ownership limits, regulator governance, and medical marijuana patients advances to Senate
After lots of handwringing and backroom wrangling, on Wednesday the Massachusetts House of Representatives voted in favor of a bill that could have a seismic impact on the commonwealth’s cannabis industry and regulatory agency—from the structure of the Cannabis Control Commission, to the fate of licensees that fail to pay their invoices. The measure comes after consideration of more than 40 amendments that were ultimately withdrawn, and now moves to the Senate, where debate and proposed edits are expected but approval isn’t guaranteed.
There are many feelings on all sides of the enormous omnibus bill, formally An Act modernizing the commonwealth’s cannabis laws, along with rants, comments, and editorials, including on this site and especially concerning the section on raising the license cap. We are speaking with several stakeholders and experts for continued coverage as the legislation moves forward, but for now here is a simple breakdown of what’s on the table and inching toward manifesting daily …
Gubernatorial control
For CCC appointments, lawmakers are removing the state treasurer from the equation, and granting the state’s top official all the power. They’re also laughing in the face of the current commissioners who are demonstrably overworked, and replacing the five-person body with three and proposing that two of those three keep their day jobs.
With the House bill, “The governor shall designate 1 commissioner as chair, who shall devote their full time and attention to the duties of the office. The 2 remaining commissioners shall not be full-time. The governor shall appoint commissioners with experience or expertise in any of the following areas: public health, public safety, social justice, the regulation and business of consumer commodities or the production and distribution of marijuana and marijuana products.”
And in order to avoid another quagmire like they have on their hands now over the ousting of former CCC Chair Shannon O’Brien: “The governor may remove a commissioner for neglect of duty, misconduct or malfeasance in office. Before removal, the commissioner shall be provided with a written statement of the reason for removal and an opportunity to be heard.”
A revamped advisory board
Nevermind the existing Cannabis Advisory Board and the fact that many of the issues that legislators are reacting to stemmed from CAB reports and observations. Per this bill, “There shall be a cannabis advisory board to study and make recommendations to the Massachusetts cannabis control commission on the regulation and taxation of marijuana.”
The CCC chair will serve as its board, flanked by top officials or designees from the Executive Office of Economic Development, Massachusetts State Police, Department of Revenue, Department of Public Health, and the Department of Agricultural Resources. Included will also be representatives from the Massachusetts Patient Advocacy Alliance and the American Civil Liberties Union of Massachusetts, as well as an additional 15 “persons appointed by the governor,” all experts in different related fields ranging from lab sciences to minority business development.
Elimination of the vertical integration requirement for medical marijuana
We needed some policy interpretation for this one, so we turned to Jeremiah MacKinnon, the president and executive director of the Massachusetts Patient Advocacy Alliance. He explained that the bill “gets rid of the vertical integration requirement for medical marijuana by replacing the term ‘medical marijuana treatment center’ with ‘medical marijuana establishment’ throughout Massachusetts law.” Furthermore, it “defines ‘fully integrated medical marijuana treatment center’ as just one option, and it gives the Cannabis Control Commission the authority to create new types of ‘medical marijuana establishment’ licenses.”
MacKinnon continued: “The bill also says that all new ‘medical marijuana establishment’ licenses will be reserved for social equity businesses for the first 36 months. On top of that, the commission can choose to expand eligibility to women-owned, veteran-owned, and minority-owned businesses during the exclusivity period under certain circumstances.”
Consumable CBD products
Defined as a “product that is to be consumed by humans, by eating or sublingual application, that contains, or is advertised, labeled or offered for sale as containing, cannabinoids derived from hemp, which, at most, contains trace amounts of THC,” under the measure licensed manufacturers and retailers would be able to finally sell consumable CBD products to and in Mass dispensaries, with the goods taxed at a rate of 5.35%. That’s in addition to the current state excise tax of 10.75%, standard sales tax (6.25%), and an optional local tax.
Topical hemp products
Under the bill, as long as several criteria are met, there can be sales outside of licensed dispensaries of “a final product derived from hemp that is not intended to be ingested, inhaled or otherwise introduced into the human body, other than through topical administration or application, and that does not cause an altered mental state or other intoxicating effect when ingested, inhaled or otherwise introduced into the human body, even if the altered mental state or other intoxicating effect is not among its stated purposes.”
A mandated commission complaint line
While the CCC has recently made steps toward launching a complaint line after years of stakeholders as well as some agency workers calling for a whistleblower portal, the House bill attempts to square that overdue reform with checks on Independent Testing Labs and ownership limits, both of which are huge points of contention.
“The commission shall establish and maintain an online portal for anonymous submission of complaints concerning suspected violations of this chapter or the commission’s regulations, including, but not limited to: (i) improper practices by independent testing laboratories; and (ii) violations of license ownership limitations.”
An increased product purchasing limit
If this bill ultimately passes in this form, you can say sayonara to the one ounce limit. This would lift that cap to “an amount equivalent in dry weight to 2 ounces of marijuana flower,” and however that translates to products with the state’s insanely stupid and complex weight classification scheme.
Raising the ownership cap
This bill controversially calls for raising the number of dispensaries that one owner can have from three to six: “No licensee shall be granted more than 6 marijuana retailer licenses, 3 fully integrated medical marijuana treatment center licenses, 3 marijuana product manufacturer licenses or 3 marijuana cultivator licenses; provided, however, that a licensee may hold 6 marijuana retailer licenses, 3 fully integrated medical marijuana treatment center licenses, 3 marijuana product manufacturer licenses and 3 marijuana cultivator licenses.”
Regarding the rollout of the license cap change: “Not later than 12 months after the effective date of this act, the Massachusetts cannabis control commission shall amend its regulations and begin accepting applications [following the new language]; provided, however, that the commission shall not grant a licensee more than 4 retail licenses until 24 months after the effective date of this act, or more than 5 retail licenses until 36 months after the effective date of this act.”
Another major change in this realm is how the bill shifts what constitutes an owner, from “a person or entity that possesses a financial interest in the form of equity in a license” of more than 10% to a person or entity with more than 35%. Anything less than 35%, and you’re just a casual investor.
The delinquent payment list
In an attempt to help rein in bad operators in the Mass cannabis industry, the bill would make it “unlawful for any licensee to receive or extend credit, directly or indirectly, for marijuana or marijuana products … for a period of not more than 60 days. … If any licensee does not discharge in full any such indebtedness within such 60-day period, the indebtedness shall be overdue and such licensee shall be delinquent within the meaning of this section.”
If a licensee becomes delinquent: “Within 3 days, the licensee that extended the credit shall notify the commission and the delinquent licensee in a manner to be determined by the commission. … Within 5 days after receipt of such notice, the commission shall review the delinquency report and, upon finding it valid, post the name and address only of the delinquent licensee in a delinquent list containing the names and addresses of all delinquent licensees. Such posting shall constitute notice to all licensees of the delinquency of such licensee.”
Regulation of hemp-derived THC drinks
Some people thought that hemp-derived THC beverages were banished from Mass once and for all, with tobacco and alcohol regulators effectively scaring bodegas and liquor stores out of selling the gray market products last year. But Beacon Hill lawmakers have another plan.
This bill calls for the CCC to “promulgate regulations … to administer the regulation of hemp beverages [and] hemp beverage products … sold in the commonwealth.”
The bill would set a “maximum amount of total THC” of “5 milligrams per container,” with the “minimum size of each hemp beverage product container not less than 11 ounces.”
There are pages and pages of dense language regarding these products, including on a “hemp beverage product excise tax [that] shall be levied on all hemp beverage products at a rate of $4.05 per gallon.”
Further studies for more legislation down the line
When Massachusetts House members want to banish an unwanted proposal to legislative purgatory, they often call for studies that can inform a potential bill in time. But when they want to motor ahead with a bill that they don’t really have enough information on, they wave the go flag and assign a bunch of studies anyway to cover their own asses.
With this bill, “The Massachusetts cannabis control commission shall study the businesses licensed. … The study shall analyze the appropriate number of licenses to be granted …, the adequacy of cannabis supply for patients and consumers, whether an oversupply harms market participants, and the adequacy of the commission’s enforcement of its regulations with respect to cultivation tiers.”
That report is due by July 2027. Also, by July 2026, “the Massachusetts cannabis control commission, in collaboration with the cannabis advisory board, shall review its rules and regulations regarding: (i) workplace safety, including, but not limited to, air quality and first responder access; and (ii) enforcement and investigation protocols.”
Additionally, the CCC “shall study and report on patterns of cannabis use in the commonwealth. The commission shall study: (i) patterns of use, methods of consumption, sources of purchase and general perceptions of marijuana among minors, college and university students and adults; (ii) incidents of impaired driving; and (iii) incidents of hospitalization and the use of other health care services related to marijuana use.”
And as a nod to those arguing against the raised license cap, legislators threw in language that would effectively require the already resource-strapped agency to fast establish a sophisticated forensic accounting division: “Not later than 12 months after the effective date of this act, the Massachusetts cannabis control commission shall conduct a targeted audit and compliance review of marijuana establishments and medical marijuana treatment centers to evaluate adherence to the ownership and control limitations.”
