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Regulators Discuss Whether Dispensaries Should Be Able To Sell Lotto

“Are these going to become grocery stores at some point?”

The issue first came up at a Cannabis Control Commission meeting earlier this month: should dispensaries be able to sell Massachusetts Lottery products? From Keno to scratchies, what’s the deal with that anyway?

With lotto as the last agenda item for today’s CCC meeting, commissioners finally addressed the subject, which the body’s General Counsel Kristina Gasson summarized thusly: “The commission received an inquiry from a licensed marijuana establishment asking whether it can become separately licensed through the Massachusetts State Lottery Commission (MSLC) in order to sell lottery products at its retail location.”

Since this sort of thing would require some degree of collaboration between various government agencies—namely, the CCC and MSLC—there are no simple answers. So Gasson broke down the elements in a detailed five-page memo to colleagues. Among other things, it notes:

  • The Commission enjoys broad legal authority with “all the powers necessary or convenient to carry out and effectuate its purposes. The Commission has the authority to condition or restrict a license, and set standards for the licensure of MEs. The Commission has expressly permitted sales of a limited category of non-Marijuana products in its regulations, such as Marijuana Accessories and Marijuana Establishment Branded Goods (“Branded Goods”), and expressly allows MEs to sell these products.

  • Commission laws and regulations neither explicitly allow nor prohibit MEs from selling lottery tickets. While Commission regulations passively refer to a Licensee’s tax obligations relative to the sale of Marijuana Products versus non-Marijuana items,14 the Commission has historically limited the sale of non-Marijuana items by Marijuana Retailers as a matter of policy.

  • In addition to the implicit limits on the permissible activities under the license, Commission regulations also directly compel Licensees to adopt “procedures to prevent loitering

And while, as Gasson noted, “This request is consistent with Massachusetts state lottery guidance with respect to how retail establishments can have a lottery component in their establishment,” it’s also true that “the Commission’s regulations do not expressly authorize the sale of Lottery products.” The general counsel offered language to change that in a way that would allow dispensaries to sell Powerball tickets, but commissioners were not ready to vote on the matter just yet.

“I have a lot of questions,” Commissioner Bruce Stebbins said. “I’m not saying no, but there’s a lot of things [to consider], like, what is our role and responsibility? Are we going to have folks coming to us asking us to change regulations potentially about everything they want to offer in a cannabis dispensary? Are these going to become grocery stores at some point? So I think that’s a bigger policy question we have.”

Stebbins also noted the loitering catch, which would prevent dispensaries from setting up folding tables for old guys to sit and play Keno all day. “I’m worried that there are some tension points,” he added. “First of all, they only allow Mass lottery sales at retail locations, and all of our marijuana establishments are not considered, in my opinion, retail establishments.”

Another sticking point: convicted felons, who can be licensed by the Cannabis Control Commission if they have drug offenses on their record, are not allowed by statute to sell lottery tickets.

So far, Gasson said there has been only one request by a dispensary to have lotto, and that business has already filed its application with MSLC and proposed safe procedures. CCC staffers have also done research to see if there are other states where lottery sales are permitted in pot shops, and learned that one store in Colorado did it at one point, but stopped after a short time since it wasn’t profitable.

Meanwhile, the lotto question coincides with a larger inquiry around what dispensaries should be able to sell. It’s hard to pay the bills these days, and the CCC has heard from other licensees asking if they can sell snacks and candy. “This will come up,” Commissioner Kimberly Roy said. “When we look at our regulations, there’s sort of an ambiguity when it comes to that.”

Members ultimately punted, saying they need more information and will address the issue with a vote at a subsequent meeting. Acting Chair Ava Callender Concepcion said if they voted today, she would not be in support, but added that she’s also open to considering the larger context, such as cannabis businesses needing to take on additional revenue streams to make ends meet. 

“It’s more complicated than just lotto sales,” she said.