The Cannabis Control Commission has completed its series of 10 public hearings on the regulations it drafted to govern the recreational marijuana marketplace, and now has until mid-March to issue final regulations.
The 107-page draft regulations (935 CMR 500) cover a range of issues important to municipalities, but have left many other issues unaddressed while allowing new types of marijuana businesses, generating criticism from the administration, legislators and other officials.
Sections that would affect cities and towns include 935 CMR 500.101, which governs community outreach, compliance with local ordinances and bylaws, and “host community agreements.”
The MMA, in conjunction with the Massachusetts Municipal Lawyers Association, offered testimony on the regulations at a hearing in Roxbury on Feb. 13.
The MMA’s written testimony can be found on the MMA home page. The draft regulations, released last December, are also available at www.mma.org.
• Download the CCC’s municipal guidance document (468K PDF)
• Download the draft “Adult Use of Marijuana” regulations issued by the Cannabis Control Commission (1.8M PDF)
Expansion of regulated establishments
The CCC’s draft regulations lay out guidelines for “social-use” establishments, such as cannabis cafés, where patrons would be allowed to use marijuana on premises. Some interpret the regulations as suggesting that social-use establishments could be licensed by the CCC unless prohibited by a local vote during a state election year.
In its testimony, the MMA urged the CCC to amend the regulations to reflect the intent of the state’s recreational marijuana law, which is that social-use requires an affirmative local vote prior to licensure [M.G.L. Ch. 94G, Sect. 3(b)].
The CCC’s draft regulations also provide for mixed-use establishments, such as yoga studios or chocolatiers, where proprietors would be allowed to sell or offer recreational marijuana goods.
Beyond brick-and-mortar licenses, the commission created an allowance for direct delivery of marijuana products from cultivators to consumers, similar to the Amazon model.
These provisions generated concern from a number of elected officials, including the governor, as well as from the Executive Office of Public Safety and Security, the Department of Public Health, and the Executive Office for Administration and Finance, all of whom encouraged the CCC to proceed slowly with regulations and to focus initially on establishing the nascent industry before expanding categories for sale, delivery and consumption.
In a letter to the Cannabis Control Commission, Public Safety Secretary Daniel Bennett warned that the CCC’s draft regulations would allow “an applicant with a criminal history of cocaine or heroin trafficking” to find employment in the recreational marijuana industry.
Bob Ross, general counsel for the Executive Office for Administration and Finance, wrote to the CCC that “simpler is better” as this new industry is established.
“Given the aggressive timeline and the special challenges of regulating these novel establishments, A&F recommends that the Commission consider delaying the licensing and regulation of social consumption establishments, mixed-use social consumption establishments, and delivery-only retail establishments until such time as the regulatory framework for the core marijuana establishments is in place and operating successfully,” Ross wrote. “At this time, the Commission’s time and resources may be best spent on the initial licensing and oversight of the marijuana cultivators, retailers, transporters, researchers, and independent testing laboratories.”
Rep. Mark Cusack of Braintree, co-chair of the Joint Committee on Marijuana Policy, expressed to the CCC his “grave concerns” about regulations dealing with licenses for on-site social consumption establishments such as cafés and movie theaters, local control over them, and minors’ access to such businesses – as well as potential licenses for delivery-only retailers and micro-businesses that would be allowed to cultivate, manufacture and deliver marijuana products to consumers. He said some of the draft regulations “disregarded” legislative intent and “even circumvented or just simply ignored” the state law.
In a statement following his testimony, Cusack said he hopes the CCC will “take a step back.”
Likewise, the MMA urged the commission to hold off on issuing new types of licenses until the recreational marijuana industry is well-established. Should the commission keep the regulations regarding new types of licenses, however, the MMA urged the CCC to clarify the process for collecting taxes on delivery-only sales.
Local role in application process
The draft regulations would require marijuana establishment applicants to hold community outreach meetings in proposed host communities within six months of the application, and have a completed host community agreement with the municipality prior to applying to the CCC for a license.
Applicants must also present proof that their proposed site complies with local ordinances and bylaws in effect at the time of the application. Once the CCC notifies a municipality that it has received a completed application for an adult marijuana business in the community, the municipality would have 60 days to notify the CCC whether the application is in compliance.
Even in communities looking to enact zoning bylaws at a spring town meeting that takes place after April 1 (the scheduled date for the CCC to begin accepting applications), under the proposed regulations any prospective marijuana business would be required to engage in community outreach and to have a signed community host agreement before its license could be issued.
The MMA urged the CCC to retain these sections.
“We believe that local officials know their communities best, and that this section would lead to a more productive partnership between communities and marijuana establishments that respects the will of the voters while ensuring a robust municipal voice in regulating the new industry at the local level,” the MMA testified to the CCC. “A similar model was used successfully in the medical marijuana program, which allowed for safe access to medical marijuana while allaying public health and safety concerns.”
Clarification needed
The draft regulations do not address several issues important to local governments across the state. Chief among these is the status of a registered medical dispensary that seeks to “flip” to recreational sales in a city or town that has enacted a ban via the process laid out in Section 56(d) of Chapter 94G. As the law and draft regulations stand, it is unclear whether an RMD can be licensed to sell recreational products in a city or town with a ban.
The MMA also urged the CCC to clarify which way a local government must round when calculating the number of recreational facilities as a percentage of liquor licenses, and also requested that the commission state unequivocally that it would respect local moratoriums.
Federal issues
The CCC has faced many questions about the future of the legal marijuana industry since U.S. Attorney General Jeff Sessions on Jan. 4 revoked an internal Justice Department guidance document (the “Cole Memo”) that had essentially established a federal policy of non-interference with marijuana-friendly state laws. The new U.S. attorney in Boston, Andrew Lelling, has said that he plans to obey federal law, but combating the opioid crisis a higher priority.
“I think that understandably causes some concern among people who want to work in the new marijuana industry, and I get that,” he said. “But … I have about 14 prosecutors who specialize in drug enforcement. I can tell you that all 14 of them are spending the bulk of their time chasing down bulk trafficking of heroin and opioids.”
Lelling has also said that he intends to follow the rules laid out by the Rohrabacher-Farr budget rider, which prohibits federal resources from being used to prosecute cases relating to legal medical marijuana.
Both the Boston and State Police have said that they will not assist federal authorities in pursuing legal action against businesses or consumers engaged in marijuana activity that is legal under state law.
Regulatory schedule
The commission expects to finalize its regulations by March 15 and to begin accepting license applications on April 1, with the prospect of issuing the first provisional licenses on or soon after June 1. Commission members have indicated to news outlets recently, however, that they could delay the anticipated July 1 start of retail marijuana sales if regulators do not have sufficient staff or technology in place to effectively oversee the industry.
credit:mma.org
