Marijuana trade association drops delivery lawsuit amid public pressure 

Several members of the Commonwealth Dispensary Association resigned 

FACING INTENSE PUBLIC PRESSURE from its members, the Commonwealth Dispensary Association on Monday withdrew its lawsuit seeking to overturn the state’s new marijuana home delivery regulations. 

The trade association representing major marijuana retailers in the medical and recreational industry had filed suit January 13 against the Cannabis Control Commission, and the lawsuit became public late last week. Over the weekend, the CDA faced a growing backlash from its members, with several of the state’s largest marijuana companies announcing publicly that they were withdrawing from the association.  

“The CDA has determined it is in the best interest of the industry and our members to drop the lawsuit against the Cannabis Control Commission,” the association said in a statement. 

Under the new delivery rules, recreational retailers will not be allowed to do their own home delivery unless they apply for a separate delivery license. For the first three years, that means they must be social equity or economic empowerment applicants, which are those who have been disproportionately affected by prior enforcement of drug laws. The retailers said this is counter to language in the state marijuana law, which explicitly allows retailers to deliver marijuana. 

The debate has racial dimensions, since the equity exclusivity period was meant to help diversify an industry that has been controlled primarily by large, white-owned companies. 

The companies withdrawing from the association all said they were driven by equity concerns, because they believe in the importance of expanding the market to diverse entrepreneurs who were hurt by prior enforcement of drug laws.  

The Commonwealth Dispensary Association, in a statement announcing that it was dropping the suit, said the group maintains “a firm commitment to building a robust cannabis marketplace which must include a level playing field and diverse representation.” It said it supports new programs that can help minority entrepreneurs access start-up capital, which is one of their major needs. 

The association said the “vast majority of members” had supported the decision to file suit, which was spurred by business concerns about the new regulations. “The difficult decision to take legal action, supported by the vast majority of members, reflected our concerns on the negative impact these regulatory changes might have on the industry as a whole – for example, there are no limits on how many vehicles a wholesale delivery licensee can operate, which leads to the possibility of an ‘Amazon’ scale operation undermining both brick and mortar retail and smaller delivery operators,” the association said in its statement.  

The association said it decided to withdraw the suit to focus on working together with others in the industry “on achieving our many shared objectives, including increasing the participation of a diverse set of entrepreneurs in the industry.”   

“The CDA looks forward to working with organizations such as Massachusetts Cannabis Association for Delivery to find common ground on future topics and build a world class industry here in Massachusetts,” the association said. “The past several days have motivated our organization to look inwards, and outwards, to work together to create real positive change.” 

Christopher Fevry, president of the Cannabis Association for Delivery, said his group will take a “trust but verify” stance when it comes to dealing with organizations that pledge to do the right thing. While the cannabis delivery association “welcomes this news from the CDA, we also acknowledge that true justice is served not simply by removing barriers placed in the path of disadvantaged peoples and communities, but also by taking active measures to help these communities and the people within them,” Fevry said in a statement. “Towards this end, [Massachusetts Cannabis Association for Delivery] welcomes a dialogue with all stakeholders to implement meaningful programs that benefit all, harm none, and create progress towards real social justice.” 

But it is clear that the lawsuit will create some lingering bad feelings. Grant Ellis, a cannabis activist and medical marijuana patient who organized the boycott, said in a statement that it took four days and 10 resignations – to the tune of $120,000 in lost yearly dues – for the association to drop its lawsuit, which he said is an example of “just how powerful of a force this community can be when engaged in authentic activism.” 

Many of the companies that resigned from the association over the weekend were major players in the state’s medical and recreational marijuana industry, including NETA, Cultivate, In Good Health, Garden Remedies, Sira Naturals, Ermont, and Mayflower Medicinals. 

But Ellis said there are questions remaining – for example, about how many companies supported filing the lawsuit before later coming out against it. “There are questions that need to be answered not only about how CDA members voted as to this lawsuit originally but also if they will attempt to revive its core objectives (banning the equity priority period and the equity delivery operator license entirely) through different means,” Ellis wrote. 

Ellis has clashed with the Commonwealth Dispensary Association in the past, such as when the association supported a bill to create a new task force to crack down on the illicit marijuana industry. Ellis wrote that because of what he feels is the group’s history of “anti-equity” public policy positions, “I will not support any form of reconciliation or further engagement with the organization going forward (and I welcome those of you who feel the same to do so as well).”