|On Friday, October 27, 2023, historic new adult and medical use of marijuana rules that will regulate Massachusetts’ legal industry took effect as the result of their promulgation by the Secretary of the Commonwealth. Now official, ahead of the Cannabis Control Commission (Commission)’s statutorily mandated deadline, these changes in accordance with Chapter 180 of the Acts of 2022, An Act Relative to Equity in the Cannabis Industry include the agency’s oversight of host community agreements (HCAs), new municipal equity requirements, suitability reform, and a new designation of Social Equity Businesses for licensees that are not yet participants in the agency’s existing programming but may be eligible for relevant benefits at the state and local levels.
In September, Commissioners voted 3-1 in favor of final regulatory policies, closing out a marathon series of public meetings that lasted five days. The finished product is the result of months of work by Commissioner-led Regulatory Working Groups, agencywide staff, as well as feedback from constituents.
Next, the Commission will turn its focus to implementation, including the issuance of updated guidance documents, relevant forms, and templates. More information will be forthcoming to impacted stakeholders in the months to come.
The complete, updated regulations can be found in the public documents section of the Commission’s website. Some highlights include:
- New Commission authority to:
- Review, approve, and certify HCAs, and develop a model contract;
- Deem an HCA provision invalid or unenforceable, or voidable; and
- Issue sanctions against a host community that is noncompliant with HCA regulatory requirements, abstain from considering new license applications in that host community, or publish a list of communities that are out of compliance.
- Starting no later than March 1, 2024, the Commission will enforce the requirement that License Applicants and/or Licensees and host municipalities reach and adhere to an HCA that complies with state law, or agree to a compliant waiver;
- To be considered compliant, any conditions set in an HCA must be reasonable. Some conditions that are presumed reasonable, include those that are:
- Required under local rules, regulations, ordinances, or bylaws;
- Deemed necessary to ensure public safety and proposed by the host community’s chief law enforcement authority and/or fire protection chief, to include a detailed explanation of necessity;
- Deemed necessary to ensure public health and proposed by the host community’s chief public health authority, to include a detailed explanation of necessity;
- A local requirement customarily imposed by the host community on other, non-cannabis businesses operating in the municipality;
- Not in conflict with other laws; or
- Otherwise deemed reasonable by the Commission.
- Prohibitions on certain HCA provisions, terms, conditions, or clauses, including:
- A promise to make future monetary payment, in-kind contribution, or charitable contributions, whether explicit or implicit;
- Requiring a License Applicant or Licensee to make upfront payments as a condition for operating in the host community;
- Obligating a Licensee to set aside money in an escrow, bond, or other similar account for a host community’s use or purpose;
- Imposing legal, overtime, or administrative costs or any costs other than a Community Impact Fee on a Licensee with the exception of tax obligations and routine, generally occurring fees;
- Inducements to negotiate or execute an HCA;
- Requiring that the Community Impact Fee be a certain percentage of the Licensee’s total or gross sales as a term or condition of an HCA, or demanding the fee exceed three percent of the licensee’s gross sales;
- Discouraging any party from bringing a civil cause of action or other legal challenge relative to an HCA or to an individual term or provision of an HCA; and
- Waiving away a Licensee’s ability to dispute whether the impact fees alleged by a host community are reasonably related to the costs imposed on their operations;
- Authorizing Licensees to satisfy, in part, existing requirements to submit a Plan to Positively Impact Disproportionately Harmed People to the Commission by donating to the Cannabis Social Equity Trust Fund that is administered by the Executive Office of Economic Development in collaboration with the Cannabis Social Equity Advisory Board;
- Expansion of the Commission’s pre-certification process, which is currently available for delivery or social consumption licenses, to all license types, thereby enabling Certified Economic Empowerment Priority Applicants and Social Equity Program Participants to demonstrate to a prospective host city or town their propensity to open any licensed cannabis business;
- To increase transparency into municipal licensing frameworks and available HCAs, a requirement that cities and towns publish information about their local licensing process in a conspicuous place and online, and create a standard evaluation form to ensure businesses have clarity about why licenses are issued to certain entities over others;
- Requiring that host communities with saturated licensing caps reserve for equity businesses at least one, and as many as 50% of any expanded license opportunities; and
- Authorizing the Commission, starting March 1, 2025, to fine cities and towns that are found to be out of compliance with the Commission’s municipal equity regulations, and deposit those fines into the Cannabis Social Equity Trust Fund.
- In accordance with Chapter 180, eliminating previously existing disqualifiers that prevented individuals with certain criminal backgrounds from employment in the legal industry as Registered Agents for Marijuana Establishments and Medical Marijuana Treatment Centers, with exceptions for Independent Testing Laboratory Agents and license owners.
Following the filing of Chapter 180 regulatory changes, Commissioners have already moved forward with other policymaking priorities, including changes to delivery licenses, microbusinesses, and social consumption. Catch up on these conversations and others by reviewing recent public meeting recordings through the Commission’s YouTube channel (@massccc) and reviewing monthly meeting packets. Find future public meeting dates through the Commission’s calendar at MassCannabisControl.com.