Massachusetts Cannabis Regulatory Update: January 2021

Jan 13, 2021

After a lengthy rulemaking process that resulted in several significant changes impacting applicants, licensees, and stakeholders, the Massachusetts Cannabis Control Commission officially promulgated changes to the adult-use and medical-use regulations on Friday, January 8, 2021.

General Massachusetts Cannabis Regulatory Changes

Ownership and Control

The Commission revised some of the ownership and control definitions and requirements, including Close Associate, Equity Holder, Person or Entity Having Direct Control, and Person or Entity Having Indirect Control. These changes further clarify and impact disclosures concerning any changes of ownership or control.

Additionally, the Commission further restricted changes of ownership or control for Economic Empowerment Applicants and Social Equity Program Participants for such entities to maintain those statuses and the benefits they grant. Any proposed transaction by a Licensee should be read with the pertinent ownership and control definitions and requirements in mind. Licensees should approach ownership and control limitations and the necessity for a Change of Ownership Application or other necessary disclosure on a case-by-case basis.

Receivership

The Commission established a process whereby a Court Appointee may exercise court oversight concerning the property, assets, management, or operations of a Licensee. Court Appointees may be a receiver, custodian, guardian, trustee, and executor or administrator of an estate. Court Appointees may be preapproved or recommended by the Commission. Licensees placed under the oversight of a Court Appointee must continue to comply with all legal and regulatory requirements.

Powers of the Executive Director

The Commission specifically delegated authority to the Executive Director to approve, among other things, location changes; name changes; new equity owners below 10%; new Executives or Directors (who hold/will hold less than 10% equity); and reorganizations (where ownership and equity are not changing). Furthermore, the Commission also delegated authority to the Executive Director to appear on the Commission's behalf in Court Supervised Proceedings and imposing fines and disciplinary actions (short of suspension or revocation of a License).

Revocation of 935 CMR 502.000

The Commission revoked 935 CMR 502.000, which were regulations that pertained to Co-Located Marijuana Operations (CMO). Rather than having a separate set of rules for CMOs, the Commission folded any relevant information related to CMOs into 935 CMR 500.000 and 935 CMR 501.000.

Packaging and Labeling

The Commission made several substantive updates to its labeling requirements, including the addition of contact information, disclosures, and the sequence of weight or volume measurements. For packaging, the Commission made some additional modifications to requirements, including removing tamper-resistant requirements and updating individual serving packaging. Licensees should review the new requirements and amend their packaging and labeling as soon as possible.

Vendor Samples and Quality Control Samples

With certain limitations, Licensees may now provide Quality Control Samples to their employees and Vendor Samples to other licensed Marijuana Establishments. Such samples are to be packaged and labeled as appropriate and are not allowed for resale.

Changes to Fees

The Commission made further changes to some of its fees (including those for Agent Registration and Packaging and Labeling Pre-Approval). The Commission also expanded fee reductions and waivers for Economic Empowerment Applicants, Social Equity Program Participants, and certain businesses registered with the Massachusetts Supplier Diversity Office.

Delivery

Delivery Operator Licenses

The Commission approved the Delivery Operator License, allowing licensees to purchase and warehouse wholesale marijuana for direct delivery to consumers. The Delivery Operator License contrasts with the Marijuana Courier License, which only allows licensees to deliver directly from Marijuana Retailer Establishments. No Person or Entity Having Direct or Indirect Control may be granted or hold more than a combined total of two Delivery Operator and/or Marijuana Courier Licenses at any time. The Commission has not yet opened up the application process for Marijuana Delivery Operator Licenses.

Exclusivity Period

The Commission extended the exclusivity period for Economic Empowerment Priority Applicants or Social Equity Program Participants to obtain Delivery Licenses from 24 months to 36 months.

Third-Party Technology Platform Providers

The Commission placed several limitations on Third-Party Technology Platform Providers and the relationships that they may hold with Delivery Licensees, including the following:

May not be an investor in a Delivery Licensee;
Cannot be a Licensee or a Person or Entity with Direct or Indirect Control of a Delivery Licensee;
Must negotiate and enter into any contracts with a Delivery Licensee on an arm's-length basis; and
Cannot receive a share of the Licensee's profits or otherwise receive a percentage or portion of the Licensee's sales.

Changes Specific to the Medical-Use Regulations

Caregivers

Caregivers can now support up to five patients (which may be expanded with an approved waiver from the Commission) with a canopy not in excess of 500 square feet.

Hardship Cultivation Registration

Patients, via a Hardship Cultivation Registration, can now potentially cultivate more than 12 flowering plants and 12 vegetative plants, excluding clones and cuttings. There is no longer any fee associated with Hardship Cultivation Registration.

Out-of-State Patients

The definition for "Qualifying Patient" now includes non-Massachusetts residents receiving end-of-life or palliative care or cancer treatment in Massachusetts as determined by a Certifying Healthcare Provider.

Please note that the above is a non-exhaustive list of changes to the regulations. We encourage interested parties to review the red-lined versions of the regulations, which the Commission has made available at the following links:

VS compliance specialist Sarah Grande recently hosted a virtual workshop where she discussed some of the operational changes in the regulatory updates in greater detail. Register here to receive the recording and presentation slides.

If you have any questions about the amendments to the regulations, please do not hesitate to contact us at 617-934-2121.

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