Issue 47: Mass Takes One (Tiny) Step Towards Social Consumption
Plus, the usual news review.
It’s a slightly abbreviated issue this week as I do some spring cleaning over here at Burn After Reading HQ. Here’s a regulatory update from Massachusetts and the usual batch of headlines.
Massachusetts Regulators Scrap Social Consumption Pilot Program
The Massachusetts Cannabis Control held a special policy meeting earlier this week, with the crux of the discussion focusing on whether or not to eliminate the state’s social consumption pilot program, opening up the process to more than just the twelve cities and towns as was initially intended.
Commissioner Kimberly Roy was hesitant to get rid of the pilot program, expressing concerns about public health and safety impacts. She also said that “opening the floodgates” to more license applicants could exhaust the resources of the Social Equity Trust Fund. Citing those concerns, she decided to vote “present” on the measure.
The rest of the Commission voted in favor of the proposal, although Commissioner O’Brien did so while noting that she would like more details on what the rollout of social consumption will actually look like.
While the elimination of the pilot program will probably lead to a more expansive rollout of social consumption once it’s implemented, it’s likely we’re still pretty far away from that happening. Still, Monday’s vote provides us with some insight into where the chips may fall in future social consumption related discussions.
ALSO:
The Commission voted to approve a draft memo (pg. 16) that will be sent to municipalities regarding the new state law that requires them to consider equity when awarding local approvals for cannabis businesses. It remains to be seen how stringent enforcement of this new law will be, or if it will actually spawn a change of behavior from cities and towns.
While the meeting was mostly focused on policy discussions, the Commission did use this opportunity to award two final retail licenses: Indica, LLC (127 Columbia Street, Adams) and New Dia Fenway (48-62 Brookline Ave, Boston).
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New England
GOV. SUNUNU'S NEW STANCE REVIVES MARIJUANA LEGALIZATION EFFORTS IN NH (Holly Ramer | NECN)
The latest measure is similar to a plan lawmakers considered last year that would put the New Hampshire Liquor Commission in charge of regulating and selling cannabis. But unlike that failed measure, it would allow the state’s medical marijuana dispensaries to sell both medical and recreational cannabis.
Michael Holt, an administrator with the state’s therapeutic cannabis program, said without that provision, the medical marijuana program would be severely threatened.
ANALYSIS: Is New Hampshire’s medical program worth saving? Existing medical companies would still be able to pivot to supplying state-run dispensaries, and patients would still have tax-free access to products. I’m still skeptical of the state-run model, but let’s not pretend the state’s current therapeutic cannabis program isn’t just a oligopoly of companies who have been sitting on licenses in the hope that the state will eventually go recreational.
NO HARMONY IN WEST BOYLSTON FOR CANNABIS INDUSTRY EMPLOYEES (Grant Smith Ellis)
In all-caps text the statement - apparently posted by Harmony staff, although that remains unconfirmed - was ambiguous not in content but only context; "Closed until ownership can properly pay their employees. The owners here do not care about the employees or the customers. We refuse to be silent anymore," it read.
Analysis: Yikes! I like to consider myself pretty plugged in to the cannabis space, but I had no idea this dispensary even existed — despite only living a short drive from it. There’s about four or five dispensaries between my place and Harmony, showing how crowded the market is around here. (As of Thursday, they are still closed.)
Rest of U.S / National
THE REAL OLCC SCANDAL IS THERE ARE TWO SETS OF RULES [OPINION] (Vince Sliwoski | Harris Bricken Law Blog)
Oregon cannabis is a mess right now. It’s sad. We have great clients who are exasperated with the La Mota story in particular. That rogue outfit moved in down the street from one of them recently, in a smaller community. The client asked me in a call: “How can we compete with that? We pay our vendors. We pay our taxes. We give our employees health insurance and all the rest… La Mota doesn’t pay anyone. They are going to drag prices down to $2/gram next door, and we’ll get killed.”
ANALYSIS: State cannabis markets may be siloed, but problems like this are hardly limited to Oregon.
CRESCO LABS GRAPPLES WITH CHALLENGES IN PLANNED COLUMBIA CARE MERGER (Adam Jackson | Green Market Report)
Part of that concern stems from the companies’ proposed deal with Sean “Diddy” Combs. That agreement promised $185 million in exchange for debt repayment, but New York’s regulations limiting retail operators to three adult dispensaries has thrown a wrench in the plans.
The overall crash in equity prices has also affected expected proceeds from proposed asset sales in Ohio, Maryland, and Florida. Consequently, the post-merger entity could be left with more questionable liabilities in the end.
ANALYSIS: This deal has taken so long to go through, I was still writing at Worcester Magazine when it was first announced. At the time, I noted it was going to take a long time to get finalized, but I probably should have considered the idea that it would never even happen at all.
International
🇧🇷 We Must Avoid Corporate Capture of Brazil’s Medical Cannabis Market [OPINION] (Felipe Neis Araujo | Filter Mag)
As the Jamaican experience taught us, regulation can concentrate profits in the hands of wealthy and powerful investors while excluding legacy operators from transitioning to the legal market. It can be easily engulfed by a neoliberal model that excludes minor, traditional cultivators from historical livelihoods—and reproduce racial inequalities, favoring white entrepreneurs to the detriment of Black and Indigenous actors.
ANALYSIS: Sound familiar? It’s great to see conversations around cannabis and equity happening all around the world now.
🇮🇲 ISLE OF MAN TO GROW CANNABIS BUSINESS TO DIVERSIFY ECONOMY (Jasper Jolly | The Guardian)
The British crown dependency is hoping to license as many as 10 firms by the end of 2025 to grow and export medicinal cannabis products from the island as part of a strategy to spur development.
Tim Johnston, the Isle of Man’s minister for enterprise, said the island’s government was “really looking to diversify our economy”, and that encouraging a medicinal cannabis industry was one aspect of a plan to nearly double GDP by 2032, create 5,000 more jobs, and give younger Manx opportunities on the island.
ANALYSIS: The cannabis industry already has a massive gender gap, and now we’re going to add an entire island full of men to the equation? Unbelievable!
… All joking aside, I’m skeptical this move will bring long term stability to the country’s economy. There’s not much that will make a cold, damp island in the middle of the Irish Sea an attractive place to grow cannabis on a commercial scale once the global market truly opens up.
UNPAID CANNABIS TAX IN CANADA BALLOONS TO ALMOST CA$200 MILLION (Matt Lamers | MJBizDaily)
The amount of unpaid federal excise tax owed by Canada’s cash-strapped licensed cannabis producers more than tripled in the latest fiscal year from a year earlier as companies complain they’re getting buried by government fees and levies.
Federally licensed cannabis producers owed the Canada Revenue Agency 192.7 million Canadian dollars ($145 million) as of March 31, 2023, a more than threefold increase over the 2021-22 fiscal year’s CA$52.4 million.
ANALYSIS: When you add the federal taxes owed by Canadian companies with the taxes owed by America’s ten largest multi-state operators, you get about $652.2M. That’s more than enough to buy a $1 pre-roll for every American and Canadian resident (and that’s not including the taxes owed by small businesses and lesser MSOs).
Welcome Distraction
This video is a few years old, but it’s new to me!
Watch Danny Devito break down some of his finest work. He returns to play Frank Reynolds in Season 16 (!) of It’s Always Sunny in Philadelphia on June 7th.
Cat of the Week
Fish, a cat who survived being stuck in a cardboard box for 14 hours after someone abandoned him on the streets of Boston. Despite the circumstances, Fish is thriving, and police are asking for help in locating the suspect.
Special Bulletins
On this week’s episode of Blunt Banter, Ravon and I discuss legalization moves in MN and PA, federal/state governments relaxing drug testing policies, that controversial billboard in Rhode Island, and more! Check it out on Youtube or Spotify.
If you’re in the New England area, be sure to check out the Parabola Center’s Federal Cannabis Policy Crash Course on June 10th at Boston Public Library! Burn After Reading readers can use the code PARTNER50 to get a $5 ticket.
