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Cannabis Control Commission sued over new delivery license regulations

The Commonwealth Dispensary Association sued the state’s Cannabis Control Commission Jan. 13, arguing that regulations limiting home delivery licenses to equity applicants until 2024 is a violation of Massachusetts law.

The Cannabis Control Commission was sued Jan. 13 by the Commonwealth Dispensary Association over its new regulations that restrict delivery license eligibility. BETSEY GOLDWASSER/ DFP FILE

The CCC published amendments to delivery regulations Jan. 8, creating two new types of delivery licenses: marijuana couriers and marijuana delivery operators. Couriers only deliver marijuana from a retailer to a consumer, while delivery operators can buy wholesale products to be sold and delivered directly to consumers.

To prioritize disenfranchised communities — that have faced disproportionate harm from marijuana enforcement and prohibition — the CCC limited delivery licenses to economic empowerment and social equity applicants for three years.

The Social Equity Program provides training in entrepreneurship, workforce development and ancillary business support to those disproportionately affected by incarceration, arrests and the War on Drugs.

Eligible program participants include those who live in areas of disproportionate impact and make less than four times the local median income, those married to or the child of a convicted individual and residents with non-drug convictions.

“The official promulgation of these regulations is the culmination of a lot of hard work and collaboration between Commissioners, staff and the public,” CCC Executive Director Shawn Collins stated in a press release. “We now begin the important process of implementation … to make the regulations, our agency and this industry more accessible.”

The CDA claims the Commission overstepped its authority and asks the Suffolk County Court to rule the regulations void, according to a statement by Foley Hoag LLP, the law firm representing the association.

They argue marijuana retailers have a right to deliver with their existing retail license under the Commission’s enabling statute. Under the new regulations, a non-social equity retailer would have to apply for a separate delivery license after the 36-month exclusivity period.

Any new amendments must pass by a vote of at least three out of five commissioners, which the delivery regulations did in November 2020. However, the CDA asserts that, because commissioner Shaleen Title’s term expired in September, her vote was not lawful. 

“Today’s action goes beyond a disagreement about cannabis delivery,” the CDA wrote in a statement. “The CDA is dedicated to ensuring that the Commonwealth’s established laws are upheld and appropriately observed through fair procedures and adequate due process.”

The CCC declined to comment on the suit, which remains open.

The Massachusetts Cannabis Association for Delivery published a statement Wednesday urging the CDA to withdraw its lawsuit.

“MCAD recognizes this suit as an attempt by the CDA, on behalf of its members, to maintain an industry with high barriers to entry, limit competition, and to minimize the viability of minority applicants,” MCAD stated in the release.

They cite section four of Chapter 94G of state law, which gives the CCC authority to implement policies aimed at opening the industry to members of communities who have been disproportionately affected by previous cannabis enforcement.

“[The CCC] are well within their authority to regulate the cannabis industry in this manner, to establish that exclusivity period,” President of MCAD Christopher Fevry said in an interview. “The lawsuit, I think, is just a masked attack on equity.”

He added that delivery is a “last opportunity” for social equity applicants to enter the cannabis industry.

Fevry said opposition to equitable delivery comes from a worry that delivery will wipe out the need for retailers, but retailers can actually make a profit from partnering with couriers. 

“We can all play in the sandbox together, and that’s really why a lot of people are urging [the CDA] to drop the lawsuit,” Fevry said. “It’s creating more division in the industry.”

Freshly Baked Company, a Taunton, Mass. dispensary and member of the Massachusetts Cannabis Business Association, expressed support for equitable delivery in an email.

“Without this collaboration we fear the communities most negatively impacted by the prohibition of cannabis could be kept from any real ownership in the legal cannabis industry all together,” CEO Bryan Stainfield wrote. 

 

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