Issue 62: CCC Communication Controversy [UPDATED]

A Missing Chairperson, A Budget Shortfall, A Lengthy Executive Session, and Accusations of Racial Tropes Lead To Another Bizarre CCC Meeting. Plus, Some Other News and Notes.

Sep 15, 2023

There’s a lot to unpack this week (when isn’t there?) so let’s get right into it.

CCC Communication Controversy

A Missing Chairperson, A Budget Shortfall, A Lengthy Executive Session, and Accusations of Racial Tropes Lead To Another Bizarre CCC Meeting

UPDATE 11:54 AM: The Boston Globe has confirmed that O’Brien has been suspended from her role with the Cannabis Control Commission.

From the second that the cameras turned on at yesterday’s Cannabis Control Commission, it was clear something was missing, as viewers quickly noticed that both the agency’s Executive Director and Chairperson were not present.

It’s not out of the ordinary for a commissioner to miss a CCC meeting, but O’Brien’s unexpected absence comes amidst speculation about her future with the agency.

Commissioner Kimberly Roy chaired the meeting in O’Brien’s absence. In her opening statement, she declined to explain why O’Brien was not present.

“For the record, I am designated as chair today, and I will have no further comment pertaining to that,“ she said.

Discussions by commissioners of the upcoming meeting schedule at the end of last week’s policy hearing did not include any hints that O’Brien would not be in attendance on Thursday.

Conversations at the end of Thursday’s meeting that involved commissioners discussing their availability for next week’s planned policy discussions also suggested that O’Brien is not expected to be in attendance for those meetings either.

The CCC has not made an announcement about O’Brien’s absence or her future with the agency. As of press time, an email to the State Treasurer office inquiring about her status has not been returned. The Treasurer is the appointing authority for O’Brien’s seat.

State law gives the officials who appoint the commissioners the authority to remove them, but only under limited circumstances. Previous commissioners have resigned in the past, but that has typically happened with advanced notice.

Executive Director Shawn Collins also did not appear during the meeting. In his absence, the agency’s Chief Operating Officer, Chief People Officer, Chief of Investigations and Enforcement, Chief Communications Officer, and Acting General Counsel have taken over his responsibilities, according to the CCC.

Budget

Thursday’s meeting also included a presentation from Chief Financial and Accounting Officer Adriana Leon, who painted a somewhat grim picture of the agency’s FY24 budget situation. She explained that the FY24 budget given to the agency by the state legislature is $600,000 less than the original projected operating costs of the CCC for the upcoming fiscal year.

The presentation outlined the fact that the agency will “need to make changes to continue to operate” and that, in order to meet payroll, “growth in other areas will be restricted in FY24 into FY25.”

You can get more details on the current budget situation starting at page 166 in this week’s meeting notes.

Lengthy Executive Session

Most of the meeting was spent in executive session, as the commissioners spent about four hours behind closed doors. According to the meeting’s agenda, executive session was held “to discuss strategy with respect to collective bargaining or litigation if an open meeting may have a detrimental effect on the bargaining or litigating position of the public body and the chair so declares.”

No further details regarding the discussion during the executive session were provided.

Agency’s Beef With Grant Smith Ellis Escalates

Perhaps the most unexpected moment of the meeting came before the extended executive session, when CCC Chief Communications Officer Cedric Sinclair took a moment to reference a press release by the agency.

The statement, published late Wednesday night to the Commission’s website, was entitled ‘Cannabis Control Commission Statement on Constituent Post About “Backroom Intervention” at the Agency’. It made reference to a post made by Ellis that relied on unnamed sources within the “sphere of influence” of the commission to make a number of claims regarding alleged unethical behavior within the agency.

(For the record before I dive into this, Grant and I worked together on the story involving the investigation into Curaleaf and the accidental release of marijuana establishment employee data by the commission. I also appeared on a handful of Grant’s CCC meeting streams earlier in the year. That’s the extent of our work together.)

“The Cannabis Control Commission (Commission) will not corroborate any of the disinformation that constituent Grant Smith Ellis published on September 12 and will correct some of the most egregious claims at this time,” the statement began, before pushing back against specific claims that Ellis made.

The statement did acknowledge an investigation referenced in Ellis’ post, but said that “the Commission has conducted an investigation into the complaint and that matter has been closed. The agency is confident in the thorough and fair review that was conducted by outside counsel and an independent investigator, whose findings from a sizeable number of witness interviews did not substantiate the allegations that were made.”

The statement concluded by saying:

“Any individuals, inside or outside the agency, who contribute to the publication of falsehoods about Commission work as fact, disclose private, personal and personnel information of staff, or engage in racist tropes about any employee will not be tolerated by the agency and will be held appropriately accountable.”

Sinclair, who was the focus of some of Ellis’ claims, said during the meeting that the article used racist tropes. He described the article as “unfortunate disinformation,” saying it was promoting a conspiracy theory about the internal operations of the agency.

Ellis said in an Instagram post on Thursday that he rejects Sinclair’s allegations and plans to speak to lawmakers and the state’s Ethic Commission about the situation. He has also taken issue with the commission referring to him as a constituent rather than a journalist.

All of this comes during controversy surrounding Ellis’ press access, as the commission has apparently removed his access to post-meeting conferences and suggested that he communicate with the agency via channels that are available to all members of the public.

In August, Ellis filed a petition of emergency relief in an attempt to reverse the commission's decision. A judge from the Massachusetts Supreme Judicial Court denied the petition without hearing after determining that the "requisite extraordinary circumstances [were] not present."

Previous court cases involving access to press conferences have often seen federal courts rule against government agencies who attempt to block or remove access to particular individuals, although judges have usually been quick to point out that their ruling should be considered narrow and specific to the facts of the case at hand, shying away from larger First Amendment and freedom of the press implications.

Following the meeting, Commissioner Kimberly Roy said that she had full confidence in the agency’s communications team, and Commissioner Bruce Stebbins said he thought the agency’s statement regarding the article was appropriate.

“They wanted to share that and [I] certainly appreciate their judgement that when they see something that they don’t think is being reported fairly and accurately that they take the opportunity to respond and try to clarify some information,” he added.

Thoughts

It’s become clear that we have very different priorities, styles, and standards regarding the use of anonymous sources, but others are free to decide for themselves if they find value in Grant’s work. I’m going to keep focusing on what’s within my control in this increasingly chaotic world of cannabis media, which is the quality and accuracy of my own work.

Any push to prevent writers from being able to cover a public agency should be treated seriously, and I’ll continue to push for more answers about this situation. I’m also not going to let all of this serve as a distraction from the bigger issues that are impacting consumers, workers, business owners, and the general public.

To recap, the Chair of the CCC was missing from the most recent meeting with no explanation amidst an apparent disagreement with the agency’s Executive Director. Commissioners have met with mediators and staff in executive session at least 15 times since June 2022 in an ongoing attempt to establish a governance charter. Commissioners have said that the agency is understaffed, while some of their new hires have caused concern amongst some people in the industry. More or less every meeting seems to bring some sort of unexpected development or surprise.

None of these distractions are making it any easier for the agency to meet its mandate to ensure that it equitably and effectively implements the state’s cannabis program.

Massachusetts Cannabis Job Numbers

Slight Month-to-Month Decline In Registered Cannabis Workers Continues, But Numbers Largely Stable

Shifting to slightly less controversial topics from Massachusetts, here’s a graph detailing the number of Registered Agents (aka cannabis business employees) in the state over the past year:

The relative leveling out of both agent numbers and the price of marijuana in 2023 could indicate that the state’s market has reached saturation, although the addition of new license types like social consumption could change that.

NBC News Reports SAFE Set To Receive Hearing

Legislation To Receive Markups in Committee Later In The Month

Just when you thought it was safe to say we could all stop talking about SAFE, the great white whale of the cannabis industry has resurfaced. NBC News reported late Thursday night that the much-discussed bill will receive a markup session in a few weeks.

From NBC News:

The Senate Banking, Housing, and Urban Affairs Committee is expected to hold a markup session for the bill, known as the SAFE Banking Act, the week of Sept. 25, three sources familiar with the talks said. The markup process, which allows senators to debate and consider amendments, is viewed as a key step in advancing the bill to the Senate floor.
Both Republicans and Democrats on the committee support the bill and expressed confidence that it would have enough support to pass the Senate when it comes up for a full vote, a step Majority Leader Chuck Schumer, D-N.Y., vowed to take as soon as this fall.
“We’ve got enough votes to get it passed,” Sen. Steve Daines, R-Mont., said, adding in an interview that he is "cautiously optimistic we may have something before the end of the month.”

The thing to watch for here is what gets added to the bill and what doesn’t. Wall Street types want to add a provision that would allow cannabis stocks to be listed on major exchanges, while social equity activists would like to see more assurances that this bill will increase financial access for small businesses.

New York Opens Up Adult Use Retail Licenses For Everyone

MSO Executives Are Relishing The News, But Activists Are Furious

I’ve already covered this topic a lot in this space, but here’s a roundup of the latest developments out of New York:

The state has officially moved to open up cannabis retail license applications to people outside the CAURD program. This includes the state’s Registered Organizations, who are the existing medical marijuana companies in the state.
Speaking at a hearing where the now finalized rules were being discussed, a barrage of local activists and business owners lamented the fact that the market was going to be expanded. Many spoke of the struggles that current operators are facing and the mental health impact of trying to run a cannabis business in New York.
It was also announced this week that Axel Bernabe, a top official in New York’s Office of Cannabis Management, is stepping down. Channeling his best Elon Musk impersonation, Green Thumb Industries CEO Ben Kovler took to ~~twitter~~ X to gloat about the news.
Fellow cannabis Substacker Jeremy Berke (
Cultivated
) shared his thoughts on the situation in New York.
My thoughts: New York has had some of the most organized and vocal pushback against large corporations in the cannabis space that we’ve seen yet. While it appears that they are on a path to be able to participate in adult use sales, the state’s MSOs still have many hurdles to overcome. There’s a lot more to unpack here, so stay tuned.

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New England

POSITIONING MASSACHUSETTS TO LEAD ON MARIJUANA RESEARCH [EDITORIAL] (Boston Globe)

One major question is how research would be funded. Some states — like California, Colorado, and Michigan — have state-funded cannabis research centers or grants. Scientist Staci Gruber, who runs the Marijuana Investigations for Neuroscientific Discovery program at McLean Hospital, said the lack of state funding puts Massachusetts behind other states.

ANALYSIS: It makes a lot of sense for Massachusetts to be a leader in marijuana research. Let’s also hope that the state can take a proactive approach in ensuring that any cannabis-derived medicines produced from this research will be affordable and available to anyone who needs them. The last thing that patients need is the Martin Shkrelis of the world getting involved in this space.

THE EARLY CANNABIS CLUB THAT CLOSED AFTER THE MERRIMACK GAS EXPLOSIONS (Chris Faraone | Talking Joints Memo)

But just as things were figuratively blowing up for the Green Thumb Gorillaz, on Sept. 13, 2018, their neighborhood burst into literal flames when a gas line under Lawrence became over-pressurized. The resulting 10-alarm event involved at least three explosions and set off simultaneous blazes in Lawrence, Andover, and North Andover, and led to tens of thousands of evacuations, widespread utility outages, 25 hospitalizations, and the death of 18-year-old Leonel Rondon.

ANALYSIS: This is an interesting cannabis-related read about a pretty horrifying chapter in recent Massachusetts history.

CANNABIS BUSINESSES TO TAP INTO VERMONT FLOOD FUNDS (Chris Mays | Brattleboro Reformer)

Tim Tierney, director of business recruitment and international trade at the Vermont Agency of Commerce and Community Development, said a total of $19 million was set aside for all types of businesses, and $1 million for agricultural businesses/farms, as part of the Business Emergency Gap Assistance Program (BEGAP) created following the storms and flooding. Funds are available on a first-come first-served basis.

ANALYSIS: Cannabis businesses have often struggled to get any sort of government relief during disasters. Good for Vermont for stepping up.

🔐 MOORE: NO SEX OFFENDERS FOR JOBS IN CANNABIS RETAIL, DELIVERY (Kinga Borondy | Worcester Telegram)

In his remarks during the meeting at the commission's Worcester headquarters, Moore noted that other companies with an extensive public interface, mentioning the ride-share companies by name, have aggressive background checks of drivers and routinely restrict employment of people with criminal histories.
“We are talking about the health, safety and well-being of Massachusetts residents,” Moore said, explaining he hopes to mitigate risks to the public.

ANALYSIS: We’ll see if the testimony by Moore and others will inspire the commission to make any tweaks to the pending regulations.

Rest of U.S / National

CANNABIS MSO TILT SHIFTS STRATEGY, CUTS COSTS UNDER NEW LEADERSHIP: Q&A WITH INTERIM CEO TIM CONDER (Chris Casacchia | MJBizDaily)

[MJBiz:] Tilt recently cut some ties with social equity brands such as Her Highness, Highsman and Black Buddha, which drew criticism from industry watchers and social equity advocates. What drove that decision?
[Condor:] We had a lot of overlap in product offerings and within our brand portfolio.
And if you’re trying to sell similar products at similar price points from two different brands, you’re doing those brands a disservice.
And we had made promises and commitments to nascent or emerging brands that we weren’t going to be able to live up to.

ANALYSIS: If you’re expecting any insights into Tilt’s decision making as of late, prepared to be disappointed. All the right questions are asked here, but we get next to no details about the size of the company’s “head-count rationalization” (a.k.a. layoffs) and no real explanation of how the company ended up with “overlapping brands” in the first place.

LEAFLY BECOMES LATEST FROM MARIJUANA INDUSTRY TO CONSOLIDATE SHARES (MJBizDaily)

The share consolidation, effective Tuesday, combined 20 Leafly shares into one.
“The primary goal of the reverse stock split is to bring the company into compliance with the minimum bid price requirement for maintaining the listing of its common stock on Nasdaq,” Seattle-based Leafly said in a news release.

ANALYSIS: While many cannabis companies clammer to find a way onto major exchanges, it’s worth pointing out that many cannabis-adjacent companies that are already on these exchanges are struggling to keep themselves above the $1 share price requirement. Before the recent stock boost caused by the Schedule III news, there were only a few MSOs that had stock prices that were firmly above that number. A move to allow these companies onto major exchanges would also likely lead to another boost in share value, but eventually companies are going to have to actually start showing consistent healthy balance sheets if they hope to be successful in the long term.

International

🌏 AS AMSTERDAM BOWS OUT, WHAT WILL BE THE NEW CAPITAL OF CANNABIS TOURISM? (Ronan O’Connell | National Geographic)

Tourism experts say Amsterdam’s new policies could alter the global cannabis tourism industry, recently estimated by Forbes to be worth $17 billion annually. Thailand, South Africa, Uruguay, Jamaica, Malta, Mexico, Canada, and the United States have all loosened their cannabis laws, which could increasingly attract tourists, experts predict. Germany may also enter this equation, as it may soon legalize cannabis.

ANALYSIS: May I humbly suggest Worcester, Massachusetts?

All kidding aside, I think the reality is that there’s no longer going to a singular global destination for cannabis-related tourism. That being said, Thailand has big potential, as there are literally billions of people who live in nearby countries that will continue to have strict cannabis laws for the foreseeable future.

You know what? I’ve got nothing this week. If you’re a paid subscriber, feel free to drop some non-cannabis content you’ve enjoyed lately in the comments.

Special Bulletins

Obviously, I covered a lot of yesterday’s CCC meeting in this issue, but I’ll still be posting the rest of the usual details in my meeting recap for paid subscribers this weekend.
I can’t help but be horrified by the news of thousands of people being killed as the result of flooding in Libya. If you have the means, here’s a few ways you can help out.