How to diversify the medical marijuana industry

Massachusetts marijuana regulators have done yeoman’s work to diversify the cannabis industry, taking numerous steps to ensure that small and minority-owned businesses have an opportunity to enter the legal marijuana market.

But one segment of the industry remains controlled – largely by design – by big companies, including some multi-state operators: medical marijuana. Could an attempt to change that come next?

One reason for the lack of diversity in the medical market is the requirement, in place since medical marijuana was legalized in 2012, that medical marijuana dispensaries be vertically integrated, which means they must have the capability to grow, manufacture, and sell products. That makes getting into the medical marijuana business much more expensive than entering the recreational market, where someone can open only a store or concentrate on manufacturing.

Advocates for medical marijuana patients have, since at least 2019, been asking the Legislature to eliminate vertical integration as a way to open up the market to more businesses – and potentially increase the range of available products. The Legislature has not acted.

In August, amid its latest rewrite of state marijuana regulations, the Cannabis Control Commission asked for public input on a proposal to eliminate vertical integration. Commissioners at the time seemed hesitant to address the issue due to murky legal issues regarding whether it would undermine the licensing system laid out in state law.

When the commission finalized the new rules this week, vertical integration was not addressed.

But speaking to reporters after Monday’s meeting, commission chairman Steven Hoffman said vertical integration will be one of the next areas commissioners will examine going forward. “We’ve made a commitment to look into that, to give it the time and study it deserves,” Hoffman said.

Hoffman said the ongoing issue of equity – ensuring that minority entrepreneurs and those affected by prior drug law enforcement can get into the industry – is “one of the major incentives” to consider eliminating the vertical integration requirement. “Now, the net worth threshold, the capital requirements to open a medical dispensary are significant, much more so than they are on the adult use side,” Hoffman said.

While commissioners have required all marijuana companies to craft “diversity plans,” ways to boost the industry’s diversity, Hoffman acknowledged that unless vertical integration is eliminated, “it’s hard to make a lot of advancement at least on equity ownership.”

Commissioner Shaleen Title, who has been at the forefront of equity issues, said the medical marijuana industry is like a “control group” compared to the recreational industry. The recreational industry, legalized in 2016, was established with a legal mandate to ensure equity for those affected by prior drug enforcement. The medical industry, legalized four years earlier with high fees and capital requirements, was “in some ways its opposite in terms of trying to minimize barriers,” Title said.

“Now we have institutional knowledge and data we can use as we try to improve the diversity and equity in the medical industry, which is important,” Title said.

Title said she – along with other people of color and social justice advocates – supports eliminating vertical integration and potentially implementing an exclusivity period for new medical marijuana applicants, where social equity businesses get priority.

But, Title noted, commissioners have also struggled to ensure equity in the recreational marijuana industry.  And with medical dispensaries already up and running, “It’s more difficult to remedy an existing problem than to prevent it in the first place.”

SHIRA SCHOENBERG

FROM COMMONWEALTH

Gov. Charlie Baker’s starter-house effort is a bust, with developers calling the program well-intentioned but ill conceived. New starter homes are extremely rare in the Greater Boston area, so Kim Bassignani is thrilled she landed one in Wrentham for under $200,000.

Consensus legislative budget ups spending by 6.5 percent, and expands access to abortion in Massachusetts.

The state’s second COVID-19 surge is different from the first in several key ways — cases appear to be trending much higher (they hit record levels Thursday and Wednesday) but deaths and hospitalizations are growing more moderately.

Even in Massachusetts, 1 in 4 residents think the presidential election was not fair, according to a poll conducted by the MassINC Polling Group.

Baker is expecting shipments of enough COVID-19 vaccines this month to treat 150,000 people. 

The proposed MBTA service cuts are called unnecessary by the MBTA Advisory Board, which represents municipalities that help fund and benefit from T service.

FROM AROUND THE WEB

 

BEACON HILL

Attorney General Maura Healey raises concerns about the no-knock and facial recognition provisions in the police reform bill sitting on Gov. Charlie Baker’s desk. (WBUR) Racial justice advocates urge Baker to sign the bill, with Rev. Ray Hammond declaring, “Governor, all eyes are on you.” (Boston Herald)

First-time drunk drivers would be required to get an ignition interlock device installed in their car, under a provision included in the final version of the state budget. (Gloucester Daily Times)

State House offices will again undergo a thorough cleaning after someone affiliated with the Senate, who was in the building Wednesday, tests positive for COVID-19. (MassLive)

MUNICIPAL MATTERS  

The Baker administration turns down a request from Holyoke to use CARES Act funding to provide direct financial supports to families struggling to cover remote learning costs. (Daily Hampshire Gazette)

The state Civil Service Commission launches an investigation into hiring and promotion practices at the Methuen Police Department. (Eagle-Tribune)

Franklin gives its town treasurer a second chance after she falls victim to a phishing scheme that cost the town $522,000. (MetroWest Daily News)

The Essex Register of Deeds has agreed to move its office space to a new redeveloped building, ending a years-long dispute. (The Salem News)

HEALTH/HEALTH CARE

The country hit a new single-day record for deaths with 3,100 COVID fatalities. (Boston Globe) More than 100,000 Americans are in the hospital with COVID-19, a number not seen since the start of the pandemic. (NPR)

WASHINGTON/NATIONAL/INTERNATIONAL

US Rep. Richard Neal is reelected chair of the House Ways and Means Committee. (MassLive)

ELECTIONS

Boston Mayor Marty Walsh spent $40,000 last month on polling as he ramps up his expected run next year for a third term. (Boston Herald)

BUSINESS/ECONOMY

1Berkshire, Berkshire County’s state-designated economic development agency, reports $1.4 million in revenue during fiscal 2020. (Berkshire Eagle)

Smith & Wesson reports record-breaking profits last quarter as the pandemic and fear of civil unrest drives up gun sales. (MassLive)

EDUCATION

School choice: Framingham schools pivot to an all-remote learning model after case levels rise. (MetroWest Daily News) Dozens of Amherst-area families find alternatives to remote learning, mostly by enrolling their children in private schools. (Daily Hampshire Gazette)

MassLive takes an in-depth look at what we know about whether students should go back to school in person. 

ARTS/CULTURE

North Adams puts out a request for proposals seeking developers looking to transform the long-closed Mohawk Theatre downtown as long as the marquee is maintained. (Berkshire Eagle)

The new “Star Wars: Kenobi” Disney television series will be filmed in Boston. (MassLive)

Chicago rapper G Herbo faces federal fraud charges, in a case unsealed in Massachusetts this week, for using stolen credit card and bank account information to make lavish purchases, including chartering private jets and yachts. (MassLive)

TRANSPORTATION

Quincy Mayor Thomas Koch says he is concerned about the effect of upcoming MBTA cuts on his city, and wonders how the MBTA, for which he chairs the T Advisory Board, will correctly balance a system that has been slammed by the coronavirus pandemic. (Patriot Ledger)

The state is about to start renumbering exits on the Mass Pike. (MassLive)

ENERGY/ENVIRONMENT

The year 2020 is on track to be the second hottest year in recorded history. (MassLive)

The darkest day of the year will also bring a celestial happening that hasn’t been this stark since 1623: the alignment of Jupiter and Saturn — sometimes referred to as the “great conjunction” — that will make them appear to be a double planet. (Boston Globe

CRIMINAL JUSTICE/COURTS

WBUR does a deep dive into the disciplinary hearings of three ex-prosecutors accused of withholding evidence from defense attorneys in the drug lab scandal involving disgraced state chemist Sonja Farak. 

Andre K. Sterling, wanted in connection with the shooting of a Massachusetts State Police trooper, was shot and killed Friday during a confrontation with US Marshals in New York. (WCVB) 

A Worcester heroin dealer is acquitted of manslaughter after a customer dies of an overdose – though he is found guilty of selling the customer heroin. (Telegram & Gazette)

MEDIA

Nicholas Kristof examines the business model of Porhhub, which operates like YouTube but with a focus on porn, including child porn, child abuse, and nonconsensual violence. (New York Times)