Cannabusiness Advisory

When Massachusetts initially approved the legalization of recreational cannabis in November 2016, some communities exhibited a strong resistance to the end of prohibition by implementing local bans or limitations on future cannabis retail. The way the law is currently structured, if a town’s population voted against legalization in 2016, its officials may impose bans or moratoriums on local retail shops. On the other hand, if a town’s population voted for legalization in 2016, it may still impose bans or moratorium on retail shops, but must first hold a local referendum to decide on the matter. Massachusetts towns have since gone on to impose more than 120 bans or moratoriums on marijuana-related businesses. Although this will not prohibit adults from legally possessing or using cannabis in these communities, it may create a lack of retail supply in certain areas when recreational cannabis shops begin opening next summer, beginning in July 2018.

This pattern of local push-back is not unique to Massachusetts – it’s estimated that in Colorado, the first state to legalize recreational marijuana, more than 60% of local communities have implemented bans against cannabis shops. In Washington, approximately 35% of local communities have implemented bans or moratoriums. Many of the anti-cannabis groups cite safety as the leading reason for implementing bans, concerned that cannabis shops may not be adequately regulated at first or may present easy access for children and under-aged adults. Anti-prohibitionists, however, insist that the legalization of this industry will enhance safety, and that restricting people from accessing legal cannabis will drive them to the black market.

Recently, in a sign that some communities may be reversing course, several towns have dismissed local bans and moratoriums. Dracut, Marshfield, and Brewster, for instance, each recently rejected local bans. Some speculate that this is due to the substantial tax incentives offered to towns that host retail cannabis shops – the maximum local sales tax that can be collected was recently increased from 2% to 3%, not to mention an additional 3% of sales that can be collected through community-host agreements with cannabis retailers. In Brewster, it’s estimated that a single cannabis store may become the community’s second largest taxpayer, once operations begin.

Although it’s clear that recreational cannabis retailers are coming to Massachusetts, it will be interesting to see how local responses continue to shape the landscape. And if you want more cannabusiness insight, head over to Burns’ Lex Indicium blog and check out this week’s post, which explores some of the trademark, copyright, and other IP-related challenges facing enterprising “ganjapreneurs.”