September 18, 2018

CommCan hopes to tap into recreational pot market in towns with bans, moratoriums

Courtesy | Charlie Yon, CommCan
Marijuana growing at CommCan's Medway facility.

Medway-based medical marijuana grower and product manufacturer CommCan is up and running, with its first store opening in Southborough last month. CEO Marc Rosenfeld recently spoke to WBJ about the young company and the potential to tap into the recreational cannabis business.

Is CommCan exploring the adult use market?

We have nothing on the table for adult use yet. We've signed medical host community agreements in Millis, Southborough and Mansfield.

Why not yet? It seems like every medical company is well on their way.

It's really up to municipalities. Towns can decide to opt out of the adult use program, much the same way towns can be a dry town and not have a liquor store. The towns in which we have medical programs have either put up temporary moratoriums or banned it all together.

So is there any chance at all those locations could be converted to adult use?

We're talking to those towns but we don't have paperwork filed for any of them.

We often hear that companies spend a significant amount of time and resources to even find a location.

The reason most places can't afford to open is that the zoning is so tough. Once companies find a spot, they have to secure it. It costs a tremendous amount of money to be in this business.

Now we're hearing that companies are agreeing to host community agreements for adult-use cannabis businesses that may not comply with the law that says municipalities can take up to 3 percent of an establishment's gross annual sales for a community impact fee.

Towns can sometimes be miopic and lose sight of the fact that we're businesses trying to open up. We're not unicorns or some magical thing that makes money out of nothing. There needs to be a balancing act in terms of what can be done and what can't be done.

You can't put a place out of business before they open and expect the town to benefit.

It looks like CommCan has agreed to pay Medway up to $155,000 per year for adult-use sales alone and that figure isn't tied to gross sales.

It was just going back and forth with what they were looking to accomplish and what we could offer and we came to an agreement. We hard a hard time trying to link it to a percentage. In that case, we'd be getting hit twice in Medway and another town where we have a dispensary that is also looking for 3 percent.

So the relationship with the town is a good one?

We're local to the town, so we have a great relationship with them. They've been fantastic though the medical process and through this process as well.

The CCC has rejected one commissioner's appeal to review these agreements for compliance. Is there concern in the industry?

There doesn't seem to be an appetite at the CCC to do that yet, but there's no doubt they will at some point. I'm sure plenty of municipalities are running afoul of the intention of the law, but we just haven't hit it yet.

This interview was conducted and edited for length and clarity by WBJ Staff Writer Zachary Comeau.

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