Massachusetts is about to join the still-exclusive club of states with authorized recreational marijuana sales. Retail sales are targeted to start on July 1. But will they? Regulators are still processing license applications, and while they’re optimistic, there are no guarantees all the paperwork will be in order by the end of the month.
Kevin Conroy, Boston-based co-chair of Foley Hoag‘s marijuana group recently spoke with The National Law Journal about what’s going on in the Bay State.
NLJ: Give us a prediction. What is the recreational marijuana retail scene going to look like on July 1? Lines at the door or no doors open yet?
Kevin Conroy: I expect that a handful of previously medical-only cannabis dispensaries that are awarded adult-use licenses will be dispensing both adult-use and medical cannabis on July 1 or shortly thereafter. The lines will be very long.
I also expect that the few adult-use dispensaries that open will likely run out of the recreational product in the first few days. Over the summer and into the fall, more adult-use dispensaries will open, including some that were not previously medical dispensaries, but there will be consumer frustration for at least the first six months because the dispensaries will not have enough adult-use product to meet the demand.
Are there any features in Massachusetts’ recreational regulatory scheme that distinguish the Bay State’s system from those of other states?
Our legislature and Cannabis Control Commission have emphasized aiding those communities that have been disproportionately affected by the war on drugs in the application process and ensuring that there is a diverse applicant pool. This has meant that all applicants (no matter their proposed location) need to have a plan for how they will positively impact disproportionately affected communities.
It has also meant that applicants are encouraged and rewarded for hiring employees who have convictions for possessing marijuana on their record. It will also eventually mean that the ownership of marijuana businesses in the commonwealth is more diverse than other states.
In the lead-up to the recreational market launch, what’s the one thing that’s consuming most of your time?
Because of our tradition of local control, our legislature and Cannabis Control Commission have given much discretion to local governments as to whether they will allow adult-use marijuana establishments to be located in the municipality and the conditions under which the establishments will be allowed.
This has meant that more than half of the communities in the commonwealth have temporarily or permanently banned recreational marijuana establishments and, even in those communities that allow the establishments, the negotiations with municipalities are difficult. Most municipalities ask that marijuana establishments give the municipality a minimum of 3 percent of their gross revenues plus donations for community organizations.
Also, the government in most municipalities is moving very cautiously and tentatively, which means that the opening of establishments gets delayed.
What are your clients in the marijuana space most concerned about these days?
Everyone is looking for the ideal dispensary site where there is considerable traffic in a community that is friendly to cannabis. While many of the most ideal sites are spoken for, plenty of good site opportunities remain. Potential applicants need to move quickly, however.
Does having a regulated medical market in place help with the addition of recreational regulations?
Yes, medical cultivators and dispensaries have been able to secure approvals from local communities for adult-use cannabis more easily than first-time applicants. Medical establishments also receive priority status in the application process. This means they will be opening before other adult-use establishments and will likely initially be the backbone of our adult-use market.
Assuming the recreational market gets off the ground soon without any major hiccups, where does that position Massachusetts given that neighboring states are in various stages of expanding legal marijuana availability?
Despite the delays [in] licensing, we are still the first state on the East Coast that will be dispensing adult-use product and our regulatory structure is comprehensive. Because of this, there is a lot of interest from out-of-state operators and investors in the Massachusetts market. We expect that the frenzy will continue for a while.
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