The Evolution of the Cannabis Industry in Massachusetts
By David Ullian, Jennifer Flanagan
Nov 2, 2022
It has been almost six years since adult-use cannabis legalization in Massachusetts and nearly four years since the first adult-use cannabis retail establishments opened their doors in the commonwealth.
This article explores the evolution of the Massachusetts adult-use cannabis industry and how lawmakers, regulators, and industry advocates contributed to key recent legislative and regulatory developments. These developments include restrictions on host community impact fees levied on licensed operators, efforts to promote and support diversely owned cannabis businesses, and establishing the East Coast's first home delivery and social consumption markets.
Evolution of the Massachusetts Cannabis Market
Massachusetts entered the legal cannabis market with the passage of a medical-use cannabis ballot initiative in November 2012. In November 2016, 53% of Massachusetts residents voted to pass Ballot Question 4 which legalized the possession, use, production, and sale of adult-use cannabis. The anticipation of this new industry excited some while concerning others about what it would mean for the commonwealth.
Implementation of Adult-Use Cannabis
Activism was the driving force behind the campaign to legalize adult-use cannabis in Massachusetts, but once the ballot question passed, the focus needed to be redirected toward education and implementation.
Under the statute, municipalities had a large role to play in the siting of cannabis businesses. Still, not all host communities were prepared for this new law. Many municipal officials had concerns surrounding zoning laws, the state licensure process, and unanticipated impacts at the local level. The biggest takeaway was that Massachusetts officials were learning right alongside their regional counterparts.
Without federal legalization, national policies, or standards, states are on their own to navigate cannabis legalization, which leads to a patchwork of varying laws and regulations across the country. In Massachusetts, the Cannabis Control Commission (CCC) is charged with implementing the law and regulating the industry, but there was also a focus on upholding the intent of the Question 4 initiative narrowly passed by the voters in 2016.
Establishment of the Cannabis Control Commission
Unlike some early legalization states, Massachusetts chose to create a new agency called the CCC to support the implementation of adult-use cannabis. This regulatory body would be comprised of five commissioners, and there could not be a majority of commissioners from the same political party. Additionally, each one must have a unique background and area of expertise.
The governor was tasked with appointing the public health appointee. The attorney general appoints the public safety appointee, and the treasurer appoints the chairperson, who must have financial expertise. By a majority vote, the governor, attorney general, and treasurer must collectively appoint two people, one with a background in social justice and another with regulatory experience. Together, these five appointed commissioners would be tasked with promulgating the initial regulations that would set the tone for the legalized industry in Massachusetts.
The CCC also established a Social Equity Program intended to benefit individuals and communities disproportionately harmed by cannabis prohibition and enforcement, thereby creating opportunities for people to enter the industry who would not otherwise be eligible and devising a regulatory structure that would be fair and equitable.
From the start, the mission statement of the CCC reflected the desire to create a fair and equitable industry while providing safe cannabis products for consumers. This sentiment continues to be at the forefront of the CCC's work with the opportunity for social equity businesses to have initial eligibility to apply for home delivery and social consumption licenses.
Five new commissioners are now building on the work of the inaugural commissioners and continue to make progress as the adult-use industry in Massachusetts evolves. Additionally, the first major cannabis legislation since adult-use legalization recently passed the legislature and was signed by the governor, another indication that the cannabis industry has become a recognized and thriving industry in Massachusetts.
The New Cannabis Statute
On Aug. 11, 2022, Massachusetts Governor Charlie Baker signed S. 3096, An Act Relative to Equity in the Cannabis Industry into law. It will go into effect by Nov. 9, 2022. As the first major cannabis reform legislation since Massachusetts established a regulated adult-use cannabis market, the new law will impact the cannabis industry across the commonwealth in significant ways, particularly regarding social equity businesses.
Reproduced with permission. Published October 2022. Copyright © 2022 The Bureau of National Affairs, Inc. (800-372-1033). www.bloombergindustry.com.