SEVERAL LARGE cannabis companies have withdrawn their membership from the Commonwealth Dispensary Association due to a lawsuit the trade association filed opposing the state’s new marijuana delivery regulations. The companies say the delivery regulations will help achieve greater racial equity in the marijuana industry, and they are unhappy that the association is seeking to overturn them.
The Commonwealth Dispensary Association, which represents marijuana retailers, sued the Cannabis Control Commission January 13.
The delivery rules would give a three-year exclusivity period for licenses to economic empowerment and social equity applicants, which are individuals disproportionately affected by prior enforcement of drug laws. Under these rules, existing recreational retailers will not be allowed to do their own delivery until they apply for a separate delivery license – and for now, that means they must be equity applicants. The retailers say this is counter to language in the state marijuana law, which explicitly allows retailers to deliver marijuana.
Supporters of the delivery rules say they are necessary to increase diversity in the cannabis industry, which has been dominated by larger, primarily white-owned companies. The withdrawals appear to be part of a boycott effort organized by a local marijuana activist, which picked up support from organizations like Cannaclusive, an organization aimed at increasing diversity within the cannabis industry.
Joseph Daddario III, president of New England Treatment Access, one of the state’s largest marijuana retailers with shops in Brookline and Northampton, said in a statement that officials at NETA and its parent company Parallel decided Friday to end their membership in the CDA. “We are doing so because of our belief and commitment to supporting social equity and economic empowerment in the cannabis industry not only in Massachusetts, but across our entire organization and in all the states where we work,” Daddario said.
David Noble, president and CEO of In Good Health in Brockton, another medical and recreational marijuana retailer, said in a statement that it is also terminating its membership in the CDA, effective Saturday. “We support public policy that provides opportunity for new entrants to join this growing industry and oppose the lawsuit brought by the Commonwealth Dispensary Association,” Noble wrote. “We believe it will create barriers for all to fully benefit from a safe and legal cannabis industry and perpetuate inequities.”
The leadership team of Garden Remedies, which operates in Newton, Melrose, and Marlborough and is led by president and CEO Karen Munkacy, released a statement expressing its commitment to equity in the cannabis industry. “Decades of the ‘war on drugs’ and the disproportionate harm such policies caused to members of specific communities cannot simply be erased by ignoring the past or leveling the playing field ‘from now on,” the Garden Remedies officials wrote. “Specific, targeted and aggressive action must be taken to acknowledge the issues and create a roadmap to a better, more inclusive industry. As such, and in support of the critical Economic Empowerment and Social Equity Programs, Garden Remedies has resigned from the Commonwealth Dispensary Association.”
Cultivate, with branches in Leicester and Framingham, also said it was ending its membership. “We are leaving because of our belief in creating economic opportunity for social equity applicants,” said Cultivate spokeswoman Francy Wade.
Sira Naturals, with medical dispensaries in Somerville and Needham, also left the association.
At least one other large marijuana company is said to have resigned from the association, but officials could not be reached to confirm.
In response to the withdrawals, the Commonwealth Dispensary Association said in a statement that it has an obligation to its members “to ensure the investments made in their communities are protected and that there is fairness in the marketplace.” “We are committed to the principals of the enabling cannabis laws which our members have followed for years,” the CDA said in a statement. “This lawsuit protects the intent of the crafters of the law and we are committed to its protection, both now and in the future.”
The Commonwealth Dispensary Association was formed initially to represent medical marijuana firms and has expanded into the recreational market. It said in a court filing that it represents 70 percent of the state’s recreational and medical marijuana businesses.
A separate marijuana trade association, the Massachusetts Cannabis Business Association, is smaller and represents more up-and-coming businesses. That group supports the delivery rules.
Delivery companies have formed their own trade association, the Massachusetts Cannabis Association for Delivery, which encouraged the boycott.
This story was updated with statements from Cultivate and Sira and with more information about the Massachusetts Cannabis Association for Delivery.