Compromise Bill Affecting Recreational Marijuana in Massachusetts

Recreational Marijuana in MassachusettsA compromise bill affecting recreational marijuana in Massachusetts was signed by Governor Charlie Baker in July. While Medicine Man Technologies was excited to see the state pass Question 4 with 56% of the vote during the November 2016 election, a legislative conference committee has now enacted significant changes to the original ballot measure.

In December of last year, recreational marijuana in Massachusetts became legal for adults to possess, use and grow. As predicted at the time, shaping the state’s legal cannabis market became bogged down in bureaucracy, delaying the development of infrastructure and policies. Because of this, the scheduled date to accept license application has been pushed out six months to April 1, 2018 with the earliest date for legal sales to commence targeted for July 1st. And that’s just the start.

Let’s take a look at some of the most noteworthy changes included in HB 3818 and what that means for recreational marijuana in Massachusetts going forward.

Sales May Not Be Available Everywhere

The new compromise bill sets up a system that allows communities to opt-out, more specifically the 91 municipalities that voted against Question 4. Until December 31, 2019, the decision to ban or limit recreational marijuana businesses in these areas is solely up to the city council or board of selectmen.

For those communities where Question 4 passed, a ban would be far more complicated, requiring the development of an ordinance or bylaw that would first have to be passed by the city council or board of selectmen. Then, with the mayor’s approval, it would go to the voters via regular or special election. As of January 2020, this will be the standard process for any cities or towns that seek to implement a ban.

Excise Taxes on Marijuana Sales Go Up

When the original ballot measure for recreational marijuana in Massachusetts passed last November, voters approved the following tax structure: 6.25% state tax, plus a 3.75% marijuana excise tax, and an optional local tax of up to 2% for a total of 12% maximum.

While legislators originally wanted to more than double that total amount, the compromise landed on the figure of 20%. The marijuana excise tax is now 10.75% and the local option is capped at 3%. While this number is not what voters approved, it’s not the highest in the nation.

Market Regulatory Structure Expands

Control of both medical and recreational marijuana in Massachusetts will be consolidated under the same regulatory authority, the Cannabis Control Commission and Cannabis Advisory Board. The CCC, which has direct regulatory control (including licensing) will expand from 3 members to 5, while the advisory board, which will provide input and recommendations, will now consist of 25 members.

So far, the CAB includes a wide range of members, including John Carmichael, the police chief from the town of Walpole and a staunch opponent of cannabis use, as well as Kim Napoli, a labor lawyer and co-founder of a Boston hemp products store. It also includes state business leaders, entrepreneurs and an adolescent substance abuse professional.

As for the Cannabis Control Commission, there has been quite a bit of controversy since 4 out of the 5 appointed members voted against Question 4. Leading the group is chairman, Steven Hoffman, a former business executive who voted “no” on recreational marijuana in Massachusetts. When questioned by the media, Hoffman clarified that he’s not opposed to legalization and that his vote reflected concerns regarding the short implementation timeline the ballot measure proposed.

Ahead of the CCC implementing new regulations, the compromise bill already states the following:

  • Licensees can have no more than 3 marijuana retailer licenses, 3 medical marijuana treatment center licenses, 3 marijuana product manufacturer licenses, or 3 marijuana cultivator
  • Penalties for adults 18-21 possessing under two ounces (formerly one) will be reclassified as civil offenses, and criminal offenses for home cultivation by those under 21 have been eliminated.
  • Individuals with prior convictions for marijuana possession can have those records sealed.

We’ll see in the coming months if the CCC adheres to the new timeline and the market for recreational marijuana in Massachusetts finally gets off the ground.

While the election was a big step forward and the bureaucracy a step back, our team at Medicine Man Technologies is hopeful that adult use marijuana is finally on track for Massachusetts. If you are looking to enter the state’s market, our consultants can help you clear any further hurdles and establish a highly successful enterprise when July 2018 finally arrives.