House pushes forward legislation to reduce size of CCC before Wednesday session
The Cannabis Control Commission is headquartered in Worcester's Union Station.
An expansive bill to restructure the embattled Cannabis Control Commission, regulate and tax hemp-based drinks and gummies that have proliferated in convenience stores, and open the door to retail-only medical marijuana businesses will go before the House of Representatives on Wednesday, having now cleared two committees without opposition.
Frustration with the CCC's slow pace of regulatory changes, headline-grabbing internal conflicts and a plea from the inspector general for the Legislature to intervene at the "rudderless agency" and revisit its "unclear and self-contradictory" 2017 enabling statute combined last summer to get lawmakers thinking more seriously about a response. The House Ways and Means Committee on Tuesday reported out the bill (H 4160) that last week unanimously cleared the Cannabis Policy Committee, and officials said Ways and Means made no substantive changes.
"This legislation not only makes needed changes to the structure of the Cannabis Control Commission, it's also representative of the House's commitment to ensuring that the cannabis industry in Massachusetts is regulated in a manner that bolsters economic opportunity, especially for communities that were disproportionately impacted by the criminalization of marijuana," House Speaker Ronald Mariano said. "I look forward to hearing more from my colleagues in the House about this issue, and to ultimately voting to pass these critical reforms tomorrow."
Created by the Legislature in 2017 after voters legalized non-medical marijuana in 2016, the CCC is a five-commissioner independent body, with appointments made singularly and jointly by the governor, attorney general and treasurer, with the treasurer selecting the chair. Under the bill the House will debate Wednesday, the CCC would be consolidated entirely under the governor. The state's executive would appoint all three commissioners and select one of them to serve as chair (who would be the only full-time commissioner). The CCC would be "subject to the laws applicable to agencies under the control of the governor."
The chair would serve conterminously with the governor, according to the bill, and the other two commissioners would each serve terms of four years, or until a successor is appointed.
The bill extends beyond cannabis products that are already under the CCC's purview to address intoxicating hemp-based products that largely fall into a gray area of the law and between the regulatory cracks. Since hemp-based gummies, energy shot-like drink bottles and seltzers became ubiquitous across Massachusetts convenience store checkout counters and social media feeds in recent years, lawmakers and regulators have flagged the need to straighten out what is and is not cannabis, and how it should all be regulated.
The committee bill would ban the sale of hemp-based beverages and consumable CBD products unless the product is registered with the CCC and complies with regulations that the CCC would be required to promulgate to deal with things like product testing, labeling requirements and more. Those products would also be subject to a new tax (5.35% for CBD consumables and $4.05 per gallon for hemp-based drinks).
The bill adjusts the existing cap on retail licenses any one operator can hold. The current limit is three, but some business owners have said the cap prevents them from selling their businesses. Under the bill advancing towards the House, the cap on retail licenses would be raised to six over a three-year period (increasing first to four, a year later to five and finally to six), and the existing three-license caps would remain in place for cultivation and manufacturing.
Opponents, including Equitable Opportunities Now and the Massachusetts Cannabis Equity Council, have warned that multistate operators are able to spend heavily to increase their market share and that allowing them to grow even more will hurt small and equity-owned businesses.
"This bill is a gift to corporate cannabis and a death sentence for local and social equity businesses. How is someone with one, two, or three stores supposed to compete with someone buying for six or more stores?" EON co-founder Shanel Lindsay said. "It will undermine everything Massachusetts has worked so hard to achieve in building the most equitable cannabis industry in the country."
The bill also contemplates the possibility that Massachusetts might want to cap the total number of licenses granted by the CCC. It would require the CCC to conduct an economic analysis of the entire cannabis industry and gives the CCC the power to limit the total number of licenses issued based on that study.
EON pointed to a number of the bill's provisions that it views as positive steps for the industry, including medical vertical deintegration and increasing the daily purchase limit to two ounces, but the group said it would prefer no legislative action to "a flawed bill that gives control of the market and policymaking to the largest, most profitable businesses."
"We appreciate action on medical deintegration, enforcing ownership limits, and other overdue reforms — but handing more power to big cannabis and gutting the CCC’s independence are poison pills," EON Deputy Director Kevin Gilnack said. "Most cannabis businesses would be better off if the Legislature did nothing."
On the medical side of the legal marijuana world, the bill eliminates the requirement that medical marijuana businesses be "vertically integrated," meaning they must grow and process all the marijuana they sell. Patients and advocates have been calling for that change for years, saying the medical-only options have become scarce across Massachusetts since cannabis was legalized for non-medical use.
It includes language that would let the CCC "establish and provide for issuance of additional types or classes of licenses to operate medical use of marijuana-related businesses" and would change the standard terminology in state law from "medical marijuana treatment center" to "medical marijuana establishment." Medical marijuana retail licenses would be available exclusively to social equity applicants for at least the first three years they are available.
The House Ways and Means Committee advanced the bill with 23 Democrats in support, no committee members opposed, eight Republicans electing to essentially abstain from the committee vote, and five Boston Democrats taking no action on the committee poll.
Asked about the Cannabis Policy Committee's bill last week, House Ways and Means Committee Chair Aaron Michlewitz said he was "hopeful to do it soon" and that the House would "make it a priority to kind of get through it as quickly as we can."
Top Senate Democrats haven't expressed the same sense of urgency on the CCC.
"I will talk to senators and the chair of the Cannabis Committee, and we'll see. We'll take a look at whatever the House sends over, of course," Senate President Karen Spilka said Thursday.
EDITOR'S NOTE: This story has been updated from a previous version to include more details and perspectives on the legislation.
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