Massachusetts cannabis regulators recently moved in two directions at once, freezing one part of the market while opening another.
As of June 16, the state Cannabis Control Commission has temporarily stopped accepting new applications for marijuana cultivation licenses, according to an agency bulletin.
With an estimated 1 square foot to 1.2 square feet of licensed canopy per adult age 21 or older, Massachusetts has significantly more cultivation capacity per capita than nearby Connecticut, where prices are higher, according to the CCC.
Regulators are hoping that imposing the freeze, considered earlier this year, will halt a trend that’s seeing cultivators go out of business in the unlimited-license market.
Who’s impacted by the Massachusetts cannabis cultivation moratorium?
The moratorium on new cultivation permits runs for 120 days. The commission may shorten or extend it depending on conditions of the state’s $1.65 billion market, where prices are falling.
However, the freeze has two exceptions. It doesn’t apply to applications submitted on or before June 16, which will continue through the review process.
It also exempts microbusiness applications from social equity program participants and economic empowerment applicants.
But while cultivation tightened, retail expanded.
What is the license cap on Massachusetts cannabis retail permits?
Regulators raised the cap on the number of adult-use retail licenses individual operators can hold from three to six, according to a CCC news release issued Wednesday.
Social equity businesses can hold a sixth license first. Non-social equity businesses are capped at five during the first 12 months after the commission begins accepting applications under the new law, then may reach six.
Other changes include:
- A person or entity may now hold up to a 20% financial interest in a license, up from 10%, before that stake counts toward a license cap, as long as the holder has no other direct or indirect control. Anyone with a 10% or greater interest must still meet suitability standards.
- A single licensee may hold up to three fully integrated Medical Marijuana Establishment licenses.
- Those serving as a trustee during or after the sale of a marijuana business to the licensee’s employees through an employee stock ownership plan are exempt from license caps.
Are more adjustments to cannabis regulations coming?
“The commission is moving quickly to meet a specific deadline … but this is just the beginning of a comprehensive policymaking process that will unfold over the next year,” commission Chair Chris Harding said in Wednesday’s statement.
Agency Executive Director Travis Ahern pointed to more work ahead, including testing protocols and possible revisions to the medical program tied to federal rescheduling.
“The important regulatory amendments made today begin a period of intense work toward modernizing the cannabis market in Massachusetts,” he said in the statement.
