Cannabusiness Advisory

On Monday, a six-person committee of Massachusetts House and Senate members completed work on a legislative compromise (Bill H.3818) that seeks to overhaul laws regarding cannabis approved by voters in last November’s election.

Local cannabis supporters have criticized the legislation, primarily because it proposes an 8% tax increase on adult-use marijuana.

Below are some of the salient points of the bill:

• The tax rate on retail cannabis will be 20%, representing a significant jump from the 12% that voters approved last fall. Despite the hike, proponents of the bill, including Governor Charlie Baker, argue that the higher rate is commensurate with, if not lower than, those in other states where recreational use is legal – for comparison, Oregon, Colorado, and Washington tax recreational cannabis at 20%, 27.9%, and 37%, respectively.
• The ability of cities and towns to determine whether to permit marijuana businesses will vary by municipality. Specifically, those cities and towns that voted in favor of legalization (comprising roughly 72% of the state’s population) will be able to make the decision to ban or limit marijuana establishments by referendum; for those that opposed, elected officials alone will make the final call.
• Under the new legislation, the rules, regulations, and specific application process for obtaining recreational licensure are to be ready by March 15, 2018, with acceptance of license applications beginning on April 1, 2018.
• The Cannabis Control Commission, proposed on the ballot as a three-person regulatory body, will increase to five people, jointly appointed by the State Treasurer, Governor, and Attorney General. The Commission will be tasked with identifying all applications subject to prioritization between April 1–15, 2018, and will either grant or deny such applications prior to reviewing any other recreational licenses. No licenses will be issued prior to June 1, 2018.
• The Commission will study the industry participation of minorities, women, and veterans, for evidence of discrimination. The legislation provides that, in the event evidence of discrimination is discovered, diversity licensing goals may be adopted.
• Applicants for medical licenses that started as non-profits will be able to convert to for-profit entities (and for-profit entities may apply; applicants do not have to be non-profits).
• Prioritized review and licensing decisions will be granted to operational dispensaries with final or provisional certificates of registration, or to applicants that “demonstrate experience in or business practices that promote economic empowerment in communities disproportionately impacted by high” arrest and incarceration rates.
• Provisional or final certificates regarding medical marijuana will be considered an achievement of accreditation status, and the Commission will ensure an expedited process for license for adult use, such that the medical marijuana license holder need not submit specific information already required and approved by the Department of Public Health.
• The bill also protects the allowance of persons aged 21 years or older to grow, buy, possess, and use limited quantities of cannabis.
• Retail establishments are set to open by July 1, 2018.
• Any records of criminal charges related to marijuana will be sealed.

The compromise bill is expected to receive House and Senate approval later in the week, likely reaching Governor Baker’s desk by the weekend. As always, Burns & Levinson is here to answer any questions that you may have regarding the legality of marijuana in Massachusetts. If you’re unsure about how the legislation may affect you or your business, of if you have other cannabis-related inquiries, please feel free to give us a call (617.345.3000) or e-mail me directly (smoskol@burnslev.com).