Issue 56: "Chaos" and "Crisis" at the CCC

The Chair of the Cannabis Control Commission in Massachusetts claims the agency's Executive Director resigned..but did he? Plus, I ask: what can the industry learn from the Mr. Beast Burger debacle?

Hey friends,

I felt like last week’s Massachusetts Cannabis Control Commission meetings were deserving of some more attention, so I’ve decided to forgo the usual paywalled summary to share my breakdown of CCC Chair Shannon O’Brien’s shocking announcement.

Later on, I share my thoughts on what the cannabis space can learn from Mr. Beast’s ghost kitchen burger debacle.

(This is a long one, so you may need to click at the link at the bottom of the email to keep reading.)

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Chaos and Crisis: CCC Chair’s Shocking Announcement Sends the Agency into Turmoil

CCC Chair O’Brien claims that Executive Director Shawn Collins is resigning, but no word has been received yet from him or the commission

In one of the strangest turns of events I’ve witnessed during a Cannabis Control Commission meeting, the chair of the agency abruptly claimed in the middle of a regulatory discussion that Executive Director Shawn Collins told her that he would be resigning.

According to Chair Shannon O’Brien, Collins had informed her in May that he wanted to resign at the end of the year and take family leave starting in September. She said that she asked him at that time to hold off on that decision. O’Brien then claimed that Collins brought the subject up again before the previous day’s meeting, indicating he now intended to start his family leave on Monday, July 31st.

The fact that Collins planned to resign wasn’t exactly shocking — he’s been the only executive director in the commission’s history, and it’s known that he recently had a child — but the manner in which the news was revealed to commissioners and the public left just about everyone dumbfounded.

How It Went Down

We first got a hint that something was off during Thursday’s meeting, when O'Brien asked the executive director at the end of the day if he had an announcement to make. Collins said he did not at that time, and wanted to discuss his announcement with the rest of the commission before making it public.

The next day, the Commission was about two and a half hours into a continuation of the previous day’s discussion surrounding draft regulations when the Chair made her shocking announcement, citing her ability to raise new business that was not anticipated at the time that the meeting’s agenda was posted.

In the middle of O’Brien’s explanation of her decision to take it upon herself to announce Collin’s apparent resignation, Commissioner Camargo spoke out of turn.

“I’m so confused,” she said.

What was O’Brien’s actual endgame here?

Camargo was hardly the only one who was baffled by this move. Regardless of what you think of Collin’s tenure as executive director, you really have to do some mental gymnastics to attempt to justify – or even make sense of – O’Brien’s sudden move to broach this topic in public.

I’ve spent way too much time over the last few days trying to wrap my head around this situation, re-listening to O’Brien’s muddled explanation and trying to imagine a scenario where her actions were warranted.

Did she think this revelation was going to inspire her fellow commissioners into publicly pleading with him to stay or being upset that he was taking leave? Did she not realize that this move was going to shock the rest of the commission, or that it could even potentially open them up to litigation?

Watch the video for yourself (the conversation begins around 2:36:30) and see if you can make sense of her explanation. It leaves out some important details that I would argue are key to understanding the situation, including whether or not Collins actually agreed to change his family leave plans, or if she had any additional conversations with Collins about his resignation between the meeting in May and the meeting last Friday.

If her sudden announcement felt rushed, that’s because it was. O'Brien made it throughout the meeting that she would leave early to catch a flight.

She claimed that she felt compelled to tell the rest of the commissioners this news as a courtesy because she felt that Collins leaving would have a large impact on the commission’s ability to do its job. She went on to say that the commission was “in crisis right now” and that Collins taking his leave at this time “creates chaos for us.”

The reaction of her fellow commissioners suggested that if there was anything that was creating chaos regarding Collin’s apparent resignation, it was the manner that O’Brien announced it. Both Commissioners Camargo and Concepcion said they found the Chair’s statements to be inappropriate.

By Chair O’Brien’s own telling of the story, Collins came to her in May with a resignation timeline that would have given the commission months to get a succession plan in order, and yet apparently she convinced him not to go through with his announcement. She then started an informal search process for Collin’s replacement, all while the rest of the commission was still in the dark regarding his plans.

To cap things off, she then disclosed her private conversations with Collins to the public and the commission’s entire staff in a way that left out key details.

It should be pointed out that – despite a few mainstream publications publishing Collin’s resignation as fact – we still don’t know if the executive director is actually planning on resigning.

There’s been no official word from Collin’s himself or the Commission. A spokesperson told me that the CCC “cannot confirm whether Executive Director Collins is stepping down. In general, the agency cannot comment on personnel matters.” A request for comment or for a statement from Collins was not addressed.

Family Leave is Law

It should be noted that Massachusetts requires employers to offer at least 12 weeks of family leave related to the birth of a child, and state law makes it illegal to discriminate or retaliate against an employee for exercising this right.

O’Brien seemed to be arguing that she was bringing the subject up because she felt Collin’s (supposed) request didn’t comply with the rules governing family leave, as she says that he didn’t give 30 days notice. Here’s what the law says:

An employee shall give not less than 30 days’ notice to the employer of the anticipated starting date of the leave, the anticipated length of the leave and the expected date of return or shall provide notice as soon as practicable if the delay is for reasons beyond the employee’s control. (Chapter 121)

O’Brien cited language from the state’s paid family leave law during her explanation, but didn’t explain if Collins was invoking the part of the law that allows for shorter notice due to reasons that were outside his control. Obviously, without the executive director’s side of the story, we have no idea if that’s the case.

The lack of comment from the commission and Collins has many wondering who is actually in charge of the day-to-day operations of the CCC at the moment.

What’s Next?

Assuming Collins is actually planning on resigning (which is still a big assumption at this point), here’s what Massachusetts law requires the commission to do:

In the case of an absence or vacancy in the office of the executive director or in the case of disability as determined by the commission, the commission may designate an acting executive director to serve as executive director until the vacancy is filled or the absence or disability ceases. The acting executive director shall have all of the powers and duties of the executive director and shall have similar qualifications as the executive director.

More than one commissioner has noted that there’s a lot going on at the agency right now. That’s certainly a fair assessment. In addition to the regulatory work and the apparent tussle over Collin’s family leave, there’s also the lab scandal, accusations of improper behavior during commission inspections and retaliation, the lack of progress in getting more equity businesses open, and a number of other “fires” that the agency has had to put out in recent months.

All of this comes as the state legislature considers legislation that would install an independent auditor within the commission. Elected officials on Beacon Hill are also still trying to figure out how much funding to give the commission for the next fiscal year.

The Commission requested that they be given $18.5 million for the operation line, $3.7 million for regulating the medical marijuana program, and $1.5 million for public education campaigns. The latest version of the state budget that was recently passed by the House offers the commission $17.41 million for their operations budget, $3.68 million for the medical marijuana program, and no funding at all for their public education campaign.

What Else Happened

Following O’Brien’s announcement, she left the meeting early to jet off to parts unknown while the rest of the Commission wrapped up discussing the rest of the items that were on the actual agenda. They ended up voting 4-0 to approve draft regulation language that would make a number of important changes to the cannabis industry in Massachusetts.

Host Community Agreements (HCAs)

These new regulations are designed to give the commission some tools to actually regulate host community agreements, allowing them to deem the agreements invalid if they stray from their intended purpose of compensating host communities for the “costs imposed” by hosting a cannabis business. This law will finally require cities and towns to actually document and justify any community impact fees that they are charging license holders.

The commission will also move to produce a model HCA for municipalities to use that should help prevent them from running astray of the law. While this model HCA was originally only going to be for equity applicants, the commissioners decided during the meeting to make it applicable for all potential licensees.

Municipal Equity

The new draft regulations also see the commission taking a number of steps to attempt to ensure that the concept of social equity is considered when municipalities are granting approvals to prospective cannabis businesses.

One big change is the fact that these new rules will allow cannabis businesses to donate to the state’s social equity trust fund as part of their mandated positive impact plan. The commission also created a new type of pre-certification for applicants who are economic empowerment priority applicants or members of the social equity program, theoretically giving them a leg up when they go for municipal approvals.

The draft regulations also give the commission some teeth to enforce their equity mandate, theoretically allowing them to fine municipalities that attempt to ignore the new municipal equity requirements. If approved, this particular rule won’t go into effect until 2025, giving cities and towns some time to get their act together.

Agent Suitability

The commission also voted to eliminate previous existing disqualifiers that prevented individuals with certain criminal backgrounds from employment in the cannabis space. This included the controversial provisions that would remove sex-related crimes from the list of mandatory disqualifiers. This move comes as part of a broader attempt to remove any offenses not related to selling illegal substances to young people. (More on this topic in last week’s issue)

Public Hearing

You can read the full commission press release documenting the new draft regulations here. A hearing on the changes will be held on September 8th, and anyone with comments is encouraged to weigh in via the CCC’s website.

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What Can the Mr. Beast Burger Debacle Teach The Cannabis Space?

Rapid expansion with no concern for product quality is a guaranteed path to failure

You may have seen a headline that Mr. Beast is suing the company behind his virtual Mr. Beast Burger kitchens. He claims that they’ve made his brand look bad by producing some god awful, inedible food.

If you’re not familiar with Jimmy “Mr. Beast” Donaldson — I envy you – but basically he’s a world famous Youtuber who first rose to prominence thanks to a 24 hour video of him counting out loud from 1 to 100,000. He’s now one of the most followed people on the internet, producing content that is sure to make anyone over the age of 25 feel old and out-of-touch with today’s youth.

His fame has reached the point where his mere existence results in money more-or-less materializing out of thin air, allowing him to use his likeness to sell a variety of goods and services. During the pandemic, he decided to jump on the virtual restaurant (aka ghost kitchen) craze, rapidly assembling a continent-wide network of chain restaurants who agreed to sell his branded burgers out the back door via delivery app companies like Grubhub and Uber Eats.

By now, you might know how this story ends: Despite the early hype and the masses of young people who were willing to do anything to have a Mr. Beast branded burger, the deal was a disaster. With the Mr. Beast brand being the singular focus of the business, the hasty expansion resulted in the actual food being provided by a wide variety of suppliers and partner restaurants, with zero consistency from market to market. As it turns out, places like Bertucci’s and Buca di Beppo aren’t exactly known for their burgers, and customer after customer reported that their food arrived undercooked or otherwise inedible. With no physical store front to complain to, consumers headed to the internet, flooding social media with pictures of pink burgers and grey chicken tenders until Mr. Beast eventually pulled the plug.

What’s This Have to Do With Cannabis?

After spending so much time in the cannabis industry, it’s hard not to see the parallels between celebrity involvement in ghost kitchens and some of the attempts we’ve seen to launch celeb-backed weed brands. In fact, some of the same famous stoners who have launched their own canna-brands also jumped on the ghost kitchen gravy train; Wiz Khalifa and Cheech Marin chief among them.

In fact, you could say Wiz’s cannabis strategy is eerily similar to the strategy behind virtual restaurants. The producers of his Khalifa Kush brand vary by the state, and are usually grown by existing cultivators in the same facilities where non-Wiz products are also produced. Once the novelty of smoking “Wiz’s favorite genetics” wears off, it’s hard to argue that there’s anything that differentiates these products from the other ones that are produced by the likes of Cresco, Trulieve, and other Khalifa Kush partners.

White label deals are already commonplace in the cannabis space, but these multi-state deals with multiple partners are a whole different ball game. Allowing a complex web of companies to produce your product with no oversight, quality control, or consistency is a path to failure, no matter how attractive the appeal of rapid expansion may be.

So here are a few lessons that I hope the cannabis space can learn from the Mr. Beast Burger debacle:

• Quality will always matter…eventually. The massive line outside the few actual physical Mr Beast restaurants that existed mirrored the consumer enthusiasm we see when legalization first goes into effect in a new state. But just as biting into an undercooked chicken tender quickly dampened fan enthusiasm for Mr Beast’s culinary career, cannabis consumers quickly become jaded to the novelty of buying legal weed when product quality is worse than the stuff they can find on the streets. There are a ton of dispensaries and vertically integrated operators in Massachusetts that were crushing it in the beginning simply because they were the only spots in town, but now many of these operators are ghost towns… and probably wishing they spent more time focusing on producing weed that’s actually good rather than joining the race to the price bottom.

• Highlight and be proud of the actual producers of your product. If Mr. Beast had gone slow, he could spent time establishing relationships with small restaurants who could have a mutually beneficial relationship with him. This would have allowed him to present this new endeavor as a collaborative partnership that was meant to uplift culinary workers and communities, instead of an obvious cash grab. It also may have the added bonus of increasing the likelihood that his food was edible, which is traditionally considered to be a key part of running any food-based business.

  In a similar vein, celebrity brands should always consider highlighting the cultivators they partner with as part of their branding and marketing. Instead of partnering with whatever company can get their branded flower in the hands of consumers the quickest, prospective multi-state brands should consider using partnering with a network of smaller craft growers instead.

• Instead of building hype through slow growth, this is an all-or-nothing approach. If Mr. Beast had built slowly, he could have a) made burgers that were actually decent and b) built an absolutely tidal wave of hype around his brand. Case in point: everyone I’ve heard talk about Raising Cain’s who has tried it says something to the effect of “yeah, it’s alright.” Yet a recent opening in my hometown required police to manage the massive amount of traffic it drew. Similar things can be said about In-N-Out, Whataburger, and other brands who have refused to overextend their supply lines, as this leaves potential customers in regions they don’t serve eager to someday try their product.

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New England

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NEW CANNABIS CONTROL COMMISSION CHAIR ON THE FUTURE OF RECREATIONAL MARIJUANA IN RHODE ISLAND (Luis Hernadez | The Public’s Radio)

Hernandez: I wondered, I mean, with that wide group of people, was there one or two points that seem to jump out a lot? What did you keep hearing from the group that was there?

Ahern: Yeah, I think a few things. One, from folks that are more involved on the cultivation side, hearing about, it's been tough for them. And that they, you know, would like us to get moving. And that's what we're doing. And they want us to get kind of retail licenses out there as quickly as possible. I think another current of folks that we heard from are folks that are, want us to be kind of thoughtful and deliberate and really take time going over the regulations before we dive into actually doing the regulations, and see what's worked, what hasn't worked, even in Rhode Island and elsewhere. And so I think that was kind of some of my main takeaways.

ANALYSIS: I’m going to bite my tongue and try to reserve further judgement until Rhode Island’s new regulators actually start regulating, as experiences in Massachusetts have taught me to care less about what they say and more about what they actually accomplish.

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Rest of U.S / National

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ALABAMA MEDICAL CANNABIS COMMISSION CHAIR STEVEN STOKES RESIGNS (Alander Rocha | Alabama Reflector)

Stokes, an oncologist who had served as chair since 2021, said in an interview Thursday afternoon that he resigned to prevent the commission and the medical cannabis approval process from being tied up in a lawsuit alleging that his appointment to the commission violated state law.

“If I did not step aside, then that process would probably be stopped until my issue was resolved,” Stokes said. “And I didn’t want to be the reason to stop the whole process.”

ANALYSIS: This is quite the change of tone from last week, when Stokes said “I’m staying. I’ve told my attorney we’re going to fight this attempt to derail the work of the Commission.”

It’s easy for him to portray this as a selfless move, but if the lawsuit had no merit, I don’t think he would be giving up his seat. Otherwise, he would be sending that message that anyone from the commission can be removed simply by a person filing a frivolous lawsuit against them.

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POT PRICES IN ILLINOIS ARE SOME OF THE HIGHEST IN THE NATION, NEW STUDY FINDS (Sophie Sherry and Emmanuel Camarillo | Chicago Sun-Times)

In the first six months of 2023, Illinois retailers reported more than $950 million in total cannabis sales, making the state the third largest cannabis market in the country, behind California and Michigan. 

That puts the state on pace to easily surpass the record total sales from 2022, when $1.55 billion worth of marijuana products were sold, according to figures reported by the state.

But Illinois has relatively few distinct brands, with just 118, compared to Washington State, which has over 1,000 and Michigan, which has about 800. 

ANALYSIS: According to Headset’s data, Massachusetts has 358 distinct brands. The findings of this study make perfect sense to me based on what I understand about IL’s market, but I must give the usual disclaimer to be skeptical of the idea that any cannabis data companies out there have a truly complete picture of any particular state market.

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KOTEK FACED PRESSURE FROM RECOVERY ADVOCATES TO FIRE OREGON LIQUOR COMMISSION HEAD (Lynne Terry | Oregon Capital Chronicle)

“Governor Kotek did not provide – and she still has not provided – any reason for having pushed Marks out of his position, and Marks was provided no other notice or opportunity to contest the reasons for that action,” the letter said.

The letter said he was forced out because the owner of a large cannabis chain, Rosa Cazares, wanted him gone. Cazares, co-owner of the La Mota cannabis chain, opposed the agency’s regulation of the cannabis industry under Marks, the letter said.

ANALYSIS: Days after Oregon’s former Liquor and Cannabis Control Commission head publicly claimed that he was fired as of the result of middling from the former owners of the now infamous La Mota chain of dispensaries, others in the state are pushing back against the idea that he belonged in that role in the first place. It’s unclear to me if there’s any merit to the claims being made by Mark, but it’s worth remembering that – in addition to the complaints about him from the recovery community – he was also implicated in that rare bourbon scandal. Kotek’s potential involvement in the La Mota scandal is still worth investigating, but this sounds a bit like sour grapes from Marks.

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HULK HOGAN LAUNCHING HEMP-DERIVED PRE-ROLLS, CBD AND DELTA-8 PRODUCTS IN PARTNERSHIP WITH FLORA GROWTH ( Vuk Zdinjak | Benzinga)

Chad Bronstein, Chairman and President of Carma HoldCo, the leader in licensing for legends and the holding company of iconic brands such as Mike Tyson's "Tyson 2.0," Ric Flair's "Ric Flair Drip," "Immortal by Hulk Hogan," and others, said this about the partnership:

"We are excited to join forces with Flora to bring Hulk Hogan's iconic brand to new global audiences. When you take Flora's vast distribution network, our ability to create one-of-a-kind consumer experiences, with Hulk Hogan's status and legacy, all roads lead to legendary."

ANALYSIS: This literal Chad is creating a stable of brands that represent men who have been accused of sexual assault (Flair), convicted of rape (Tyson), and caught being incredibly racist in a leaked sex tape (Hogan). Despite the fact that any of these elderly men could probably still physically break me in half, I’m going to have to kindly ask these jabronis to go find another industry to grift from.

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CANNABIS MSOS CRESCO LABS, COLUMBIA CARE TERMINATE PLANNED MERGER (Kate Robertson | MJBizDaily)

The terminated deal also means that the companies’ plans to sell assets in Illinois, Massachusetts and New York to rapper and business mogul Sean “Diddy” Combs have been terminated, effective July 28, according to the release.

The sale to Combs would have created the largest Black-owned marijuana multistate operator in the United States.

Earlier this year, New York-headquartered Columbia Care streamlined its operations, laying off 25% of its corporate employees and shuttering some operations.

ANALYSIS: I’ve previously covered the Diddy deal when I was still with Worcester Magazine, and I also talked about it here. In case you’re wondering, the workers at the licenses that Diddy was supposed to acquire were told that they would be transferred to his company once the deal was finalized.

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International

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🏴󠁧󠁢󠁥󠁮󠁧󠁿 OFFICER WHO WROTE MET’S DRUG STRATEGY HAD FLAT LIKE ‘AMSTERDAM COFFEE SHOP’, TRIBUNAL HEARS (Haroon Siddique | The Guardian)

A senior Metropolitan police commander who wrote the force’s drug strategy regularly smoked cannabis before going to work, a tribunal has heard.

A nurse who lived with Julian Bennett towards the end of 2019 described the flat as “like an Amsterdam coffee shop”.

ANALYSIS: What a British way to say “that guy smokes a lot of weed.”

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In other news of a Massachusetts public employee doing something wildly unexpected, the internet has been captivated by the video that appears to show a Boston police officer yeeting himself down a city hall plaza playground slide with what can only be described as an inconceivable amount of velocity.

Let’s watch this video, which has already racked up millions of views around the web:

Whether you’re a member of the ACAB crowd or you proudly fly a blue lives matter flag outside your house, I think we can all agree on one thing: this video is funny as hell. While this may not be the most effective use of law enforcement’s time, at least no members of the public were harmed by this extracurricular activity.

(Reports indicate the officer faced no disciplinary action for the incident, and apparently used their private insurance to treat the minor injuries that occurred.)

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This week it’s Celesta, a spicy tiger who is available for adoption at Baypath Humane.

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