Slow-moving Massachusetts a concern for recreational marijuana launch

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(This story has been updated from an earlier version.)

By Omar Sacirbey

Many Massachusetts cannabis advocates are worried that a regulatory agency heavy on members who voted against legalization may try to undermine the state’s nascent recreational marijuana industry.

But a far bigger worry, it seems, is that “in Massachusetts, things tend to move really slow.”

Those are the words of Kris Krane, managing partner of 4Front Ventures, a Boston-based canna-centric consulting firm.

He’s among industry observers who are more worried about Massachusetts’ adult-use rollout being hindered by the state’s timeline and potential manpower issues than the newly appointed Cannabis Control Commission’s politics.

“I’m not concerned about the commission,” said Jaime Lewis, a member of Massachusetts’ 25-member Cannabis Advisory Board and CEO of Mayflower Medicinals. “I’m concerned about the heavy lift that the commission has to do in setting up an entirely new program and creating rules and regulations in a timely manner.”

Her concerns are well-founded, considering her Boston-based medical marijuana business received its provisional license in August 2016 but is still awaiting its final cultivation license and approval to sell.

Timeline worries

Massachusetts’ adult-use law, approved this summer by state lawmakers, is supposed to take effect July 1, 2018.

CCC chair Stephen Hoffman has pledged to try to meet that deadline, but he also hasn’t ruled out a possible delay.

No matter when the program starts, don’t expect Massachusetts to look like Colorado or Washington state anytime soon.

“It’s going to take a good year and a half, two years before we see a robust, mature market,” said Krane.

The application process for adult-use business licenses is set up in two waves:

  • Fully operating MMJ dispensaries and those that received provisional MMJ licenses by July 1, 2017, can apply for licenses in April. Giving existing businesses an early start is designed to stave off a potential recreational marijuana shortfall.
  • All other businesses can start applying July 1, 2018.

With 12 MMJ companies operational as of Sept. 1 and roughly 100 having received provisional licenses through July 1, Massachusetts is looking at unrealistic numbers – at least at the beginning.

Attrition could whittle those applicants to roughly 75 by April 1, by Krane’s estimate, but it’s still unlikely regulators will be able to review and approve all those applications in three months. Plus, many businesses that win licenses probably will need time beyond July 1 to open.

So, in a “best-case” scenario, 25-30 stores will be open by July, said Krane, though others could open relatively quickly throughout the year.

Other obstacles

Krane expects the recreational marijuana application process to mirror the medical cannabis process.

He bases that on the fact that whatever application and licensing steps an MMJ business applicant has taken will be deemed applicable to their adult-use application.

In addition, he said, one of the new commissioners, attorney Kay Doyle, served as general counsel for the state’s medical program and was heavily involved in the application drafting and review process.

“If you read the tea leaves,” he added, “it looks likely that the adult-use application will look very similar to the medical application.”

Other observers, however, note that the MMJ application review process lasted up to several years for some applicants.

If the same holds true for recreational applications, businesses aiming for the July 1 window won’t open for a year, they estimated.

“It’s not going to be easy for people to get through this application process,” Krane predicts.

The biggest hurdles will likely be at the local level, observers said. They expect to see requirements similar to those in the current MMJ system where, for example, adult-use businesses must obtain letters of support to operate in their respective towns.

It’s unknown how much authority they’ll have, but towns always find a way to restrict cannabis businesses, Krane said.

Another big question is whether the CCC will have adequate personnel and resources to efficiently review applications.

Tim Keogh – CEO of AmeriCann, a canna-centric real estate company with property in Massachusetts – is worried the $2 million allocated to the commission won’t be enough to quickly implement the program.

“It sounds like a big number,” he said, “but given everything that needs to be done, they may be hard-pressed to get the everything they need.”

On the positive side, the new adult-use law transfers the state’s MMJ program staff to the recreational side, meaning reviewers already have experience scrutinizing applications.

Adam Fine – a managing partner in the Boston office of cannabis-focused law firm Vicente Sederberg – was hopeful for a speedier process because regulators have likely learned from past mistakes.

“I feel like this is not going to be as bad as it was under medical,” he said.

Vetting the commission

Observers agreed that while they wish four of the CCC’s five members hadn’t voted against the November legalization referendum, they believe concerns about a biased commission are unwarranted.

In fact, Krane has high hopes for three of the commissioners – Shaleen Title, Hoffman and Doyle.

Title, a cannabis advocate, will “be a powerful force … (and) is arguably the most experienced of the five when it comes to this issue and how to regulate it,” Krane said. “Her presence is a huge boon for the movement and the industry.”

He noted that Hoffman explained that he doesn’t oppose legalization per se and didn’t vote for the referendum in November merely because he saw the timeline as too hasty. “He doesn’t strike me as someone who is trying to sabotage this,” Krane added.

As for Doyle, Krane pointed out that she voted against legalization because of issues with the wording. Balancing that out, Krane said, is Doyle’s experience with the MMJ program.

“She’s seen what works and what doesn’t,” Krane said.

Fine believes Massachusetts has “a good commission.”

“The most important area is competency,” he added. “I think we have a very competent commission with very experienced individuals, and that’s what we want.”

If prospective entrepreneurs have concerns about the CCC, it apparently hasn’t stunted their interest.

“We’re getting numerous inquiries from businesses both in state and out of state,” Fine said. “And as the program becomes better defined with regulations, it’ll draw even more interest.”

Omar Sacirbey can be reached at