The Massachusetts Cannabis Control Commission just released the latest information on what rules and regulations business-owners can expect when the recreational marijuana program launches in July of 2018.
Here’s where the marijuana industry currently stands in Massachusetts: medical marijuana is legal and available for purchase for patients who register with the Medical Use of Marijuana Program. Meanwhile, even though the legalization of recreational marijuana was approved in November of 2016 the program is still months away from becoming a reality with marijuana business license applications expected to become available in July 2018. However, we just got a sneak peek into what the state’s future recreational marijuana program will look like thanks to the completion of public policy discussions held by the Cannabis Control Commission.
The discussions defined 5 main areas of recreational marijuana business licensing and operations: fees, inventory and record-keeping, business types, inspections and fines, and cash and banking.
The state of Massachusetts will recognize and offer licenses to a whopping 11 types of recreational marijuana business:
- Cultivation – Grows marijuana plants for sale to licensed manufacturers or retailers. Licenses are tiered based on the square footage of the cultivated area.
- Craft Marijuana Cooperative
- Microbusiness License – Microbusinesses operate on a smaller scale in terms of square footage and revenue and are able to participate in multiple areas of business without having to apply for separate licenses.
- Manufacturing – Creates preparations, tinctures, concentrates and other forms of manufactured marijuana products for sale to licensed retail establishments
- Independent Lab – Can test marijuana products for contaminants and concentration of THC and CBD
- Retail – The state will offer separate licenses for brick & mortar stores with a physical location and stores that only offer delivery of recreational marijuana. Retailers can only sell marijuana products to the end consumer and customers must be 21 years of age or older.
- Transporter – Transport marijuana plants or manufactured products for other licensed marijuana businesses
- Research – Test marijuana products for scientific purposes
- Social Consumption – Establishments that allow the consumption of recreational marijuana on their premises. The state will offer separate licenses to businesses that only allow the consumption of marijuana and those that offer mixed use. “Mixed use” has not been defined yet but may refer to food and non-alcoholic beverages. Smoking of marijuana within social consumption establishments will not be allowed.
Application and Licensing Fees
The state has set a flat application fee of $300 for all business types with the exception of Cultivation. Application fees for cultivators is tiered with Tier I through Tier IV applicants paying $100, $250, $400 and $600 respectively.
The state will also impose the following annual licensing fees on all businesses:
Tier I $1000
Tier II $2,500
Tier III $4,000
Tier IV $5,000
Craft Marijuana Cooperative: The same as Cultivation licensing fees
Independent Lab: $5,000
Retail: $5,000 (brick and mortar) $2,500 (delivery)
Social Consumption: $5,000 for primary use and a sliding scale for mixed use.
Inventory & Record Keeping
Licensed marijuana cultivators will be required to carry out a monthly inventory of plants they are currently cultivating and marijuana that has been stored. An additional annual inventory will be required that is comprehensive. Inventories must include the date they were performed, signatures from all who participated in the inventory and a summary of what was found.
All establishments will be required to implement a seed-to-sale tracking method and any business that cultivates, processes or sells marijuana for both medical and recreational use must have separate tracking of both classes of product.
Business must also keep historical records of their operating procedures, vendor training completion, background check reports, inventory records, personnel records, policies and procedures, staffing plans and the seed-to-sale tracking records.
Inspections and Fines
The commission decided to apply the same rules for inspections and penalties that are currently enforced for medical marijuana businesses. Methods for inspection may include random purchases made at retail by inspectors and the filing of complaints by employees and consumers. The commission will make use of license suspensions, sales limitations, quarantines and cease and desist orders to ensure compliance with regulations.
The framework for fines was also established, borrowing from the regulations applied to other industries in Massachusetts. Each incident can only incur up to a maximum fine of $25,000 and the fine can only be imposed upon the licensed entity rather than an individual. Written notice of fines must be provided as well as an option to appeal the fine.
Cash and Banking
Marijuana businesses have met major obstacles in trying to move their revenue legally through the banking system, often paying exorbitant fees for services. Massachusetts is proactively trying to improve this situation with two major actions.
First the state government will create its own agreement with state banks to allow retail establishments to make cash deposits electronically. Meanwhile, paying tax revenues to the state will also be made easier with the installation of new cash-handling machines placed across the state. These will allow businesses to deposit directly to the Massachusetts Department of Revenue at secure locations.
These policies have not yet been made official. The commission expects to have a final vote by the end of December 2017 before filing them as Draft Regulations.
The Marijuana License is a non-profit informational resource for patients and business-owners across the country looking to obtain a medical marijuana card or marijuana business license. It maintains an up-to-date database for each state.