New Massachusetts Cannabis Regulations Up for Public Comment and Final Vote

The Cannabis Control Commission (CCC) assembled on July 20, 2020, to approve draft changes to the cannabis adult-use, medical-use, and colocated operator regulations. A Virtual Public Hearing on the draft regulations was held on August 3rd and public comments will be accepted until August 14th.

The new draft regulations encompass various changes across the board – from new CCC approval procedures, operational requirements, licensing updates, and receivership processes. Given the expansiveness of the proposed changes, it is critical for current and future operators as well as investors, lenders, and financial institutions engaging with industry participants to review and understand the additions and modifications.

Colocated Marijuana Operators (CMOs). In regard to the promulgated regulations concerning Colocated Marijuana Operators, the CCC has proposed to combine the regulations previously set forth in 935 CRM 502.000 with the existing  935 CMR 500.000 (Adult-Use Regulations) and 935 CMR 501.000 (Medical-Use Regulations) due to redundancy in the currently effective colocated operator regulations.

Licensure/Certifications. Some key developments in the new regulations regarding licensure include:

  • Expansive processes pertaining to patient certification/registration such as:
    • permitting patients with certain identified hardships to renew on a 2-year basis instead of annually
    • expressly adding telehealth visitation as a proper means for patients to receive an assessment by a Bona Fide Healthcare Provider
    • allowing patients to cultivate up to 12 flowering plants without hardship cultivation
    • opening patient certification and registration to certain patients from out of state who frequently travel to Massachusetts for its top-tier hospitals and medical care.
  • Updates to the definition of Equity Holder and Persons or Entities with Direct Control to reach persons or entities acting as manager (director-type roles) in limited liability companies and setting forth a specific dollar value as to the Commission’s viewpoint of “significant contracts”
  • Revisions to allow craft marijuana cooperative farmers to take part in industry operations as landlords without requiring active involvement as cultivators on the licensure
  • Addition of repackaging to a permitted activity under retail licensure. Such addition is likely an effort to match and acknowledge the current processes and operations of dispensaries when preparing their marijuana and marijuana-related products for sale.

Operations. There are also critical changes to the operational requirements that medical, adult-use and other operators must follow, including:

  • Addition of operational procedures for Marijuana Research Facility Licenses and Permits
  • Updates concerning training requirements for the Responsible Vendor Training Program, bifurcated in two main parts— a (1) Basic Core Curriculum and a (2) Advanced Core Curriculum – as well as criteria for online courses
  • Procedures regarding expedited applicants such as Social Equity Participants, minority- or woman-owned business or Microbusinesses
  • Procedures for contact-less orders – which acknowledges present challenges faced by operators as a result of COVID-19 – as well as sampling up the chain between operators
  • Implementation of a CCC Product Database, whereby operators must display information about marijuana products produced by product manufacturers and sold by dispensaries to expand the CCC’s oversight of products circulating the Massachusetts market.
  • Mandating dispensaries, cultivators and product manufacturers to develop policies and procedure to ensure compliance with the Massachusetts fire code
  • Regulations governing sales of vaporizers and procedures with respect to the disclosure of vape ingredients and components. Such addition is likely as a result of the health issues that were associated with vaporizers over the recent years.
  • Operational policies and procedures for Research Permit and License holders, such as the requirement of an institutional review board and disclosure requirements
  • Other operational highlights such as whistleblower policies, waste removal procedures, and branding and advertising permitted activities, subject to certain restrictions

Approvals. In addition, the CCC has proposed new procedures for certain approvals, such as:

  • Requisite procedures and approvals for operators in the receivership process.
  • Allowance of the Executive Director of the CCC to make certain approval decisions regarding (1) a location change, (2) a name change, (3) addition of a new equity holder with ownership below 10%, (4) reorganization (without an ownership or equity change) and (5) receiverships.

Pending public comments, the CCC is expected to hold a final vote on the regulations on September 24.