Massachusetts’ legal cannabis market is undergoing a transformation, with new rules that increase the amount of marijuana someone over 21 can purchase, ensure potency levels and restructure the Cannabis Control Commission, among others.
An Act Modernizing the Commonwealth’s Cannabis Laws introduced many new regulations to the market, including increasing the purchase and possession limit for legal cannabis from 1 ounce to 2 ounces, or its equivalent in marijuana concentrate. The Act also directed the state’s Cannabis Control Commission (CCC) to adopt new regulations for equivalency amounts in other products.
In addition, the law seeks to verify the potency of products sold in the state. Marijuana and marijuana products now must detail the types of cannabinoids and their respective amounts on their labels. If the product’s THC potency is beyond 75 to 125% of what is reflected on the label, it will be removed from the market.
This move comes after The New England Narcotic Officers Enforcement Association tested more than 100 products from multiple dispensaries in a two-year period and found inflated THC percentages. The CCC recently updated testing protocols, created an internal testing task force and is considering a secret shopper program.
The Massachusetts legal cannabis market has totaled more than $9 billion in gross sales and produces more than $250 million in tax revenue every year. Gov. Maura Healey released a statement on the recent reforms, noting its importance to the state’s economy.
“The cannabis industry is an important part of Massachusetts’ economy – supporting jobs and local businesses and generating revenue for cities and towns. It’s important that we are doing everything we can to make sure this industry is set up for success and that we remain competitive in this fast-growing market. I’m grateful to the Legislature for their leadership on this critical reform bill.”
Other Key Changes to Massachusetts’ Legal Cannabis Market
Among other changes:
- The license limit doubles from three to six, allowing business owners to spread overhead costs across more stores.
- The state loosened advertising restrictions, permitting the promotion of sales, discounts and loyalty programs.
- Medical cannabis businesses are no longer required to be vertically integrated and can sell from other cultivators.
- Massachusetts will create a public delinquency list to keep businesses in credit compliance. Cannabis businesses can no longer extend credit to another business beyond 60 days and, if that business becomes delinquent, it will be placed on a public list, forbidding business with that entity until the debt is paid off.
- The state will operate an anonymous tip line for callers to report violations.
- Delivery is expanded by allowing businesses to service any municipality in the commonwealth, even those that have banned cannabis sales, unless a municipality requests a two-year waiver to prohibit cannabis delivery.
- The CCC will conduct studies on several reform issues, including the public health impact of legalized marijuana and the state’s 10.75% cannabis excise tax.
In addition, the CCC was reduced from five members to three and the appointees are required to have backgrounds in social justice, public health, public safety and commodity regulation. Gov. Healey appointed Christopher Harding as chair of the CCC and Xiomara DeLobato and Anthony Wilson as the other two members.
Harding is chief of staff and undersecretary at the Executive Office of Health and Human Services. He previously led the state Department of Revenue and was a founding member of the Cannabis Advisory Board. DeLobato is vice president and chief of staff for the Western Massachusetts Economic Development Council, and Wilson has worked with municipalities and cannabis entrepreneurs navigating Massachusetts’ regulatory landscape.
Under the new structure, the CCC executive director reports directly to the chair.
Harris Beach Murtha’s Cannabis Industry Team assists cannabis businesses throughout Massachusetts, the Northeast and the country with legal needs and business strategy. If you need assistance, please reach out to attorney Eric J. Gyllenborg at (617) 457- 4058 and egyllenborg@harrisbeachmurtha.com, or to the Harris Beach Murtha attorney with whom you most frequently work.
This alert is not a substitute for advice of counsel on specific legal issues.
Harris Beach Murtha’s lawyers and consultants practice from offices throughout Connecticut in Bantam, Hartford, New Haven and Stamford; New York State in Albany, Binghamton, Buffalo, Ithaca, New York City, Niagara Falls, Rochester, Saratoga Springs, Syracuse, Long Island and White Plains; as well as in Boston, Massachusetts, and Newark, New Jersey.