Mass. cannabis reforms approved by legislative committee

“The legislation includes a new structure that provides clear accountability and enhances the operations of the Cannabis Control Commission,” committee co-chairs Senator Adam Gómez, a Springfield Democrat, and Representative Daniel Donahue, a Worcester Democrat, said in a statement together. The bill, they added, “charts a more promising path forward for cannabis regulation.” The legislation also raises the number of pot shops any entity can own to six, up from three.

That move is aimed at allowing struggling businesses to sell out of the industry as financial pressures and competition has ramped up. Businesses in the state’s social equity programs which aim to mitigate harms done to largely Black and Latino communities through the war on drugs, will be able to hold up to six licenses right away. Other businesses will remain limited to five licenses for a year.

“Regardless of what happens with this new piece of legislation, I am committed to continuing my efforts to make needed changes to the cannabis industry to protect public health and safety and to help struggling cannabis businesses who are following the law become profitable,” Chair Shannon O’Brien said in a statement. Industry advocates were largely pleased with the changes.

“The most immediate [impact] will be the increase in the purchase limits, because that will allow us to attack our oversupply problem,” said Ryan Dominguez, a member of the CCC’s Cannabis Advisory Board and executive director of the Massachusetts Cannabis Coalition, a trade group representing over 90 marijuana companies. He also praised Governor Maura Healey, who will have sole authority to make commission appointments under the legislation, as opposed to the current structure, in which that authority is shared between the governor, the treasurer, and the attorney general. All current terms of the five commissioners will be terminated when the law takes effect so the governor can appoint the three commissioners.

“We’re ... very confident that [Healey is] going to be able to lead us into this next iteration,” Dominguez said, but he added “there definitely needs to be some expediency in the way that they roll out the restructuring of the CCC.” Laury Lucien, attorney and founder of Lucien Law, who chairs a subcommittee of the Cannabis Advisory Board, said that raising the license caps, may not lead to rampant consolidation now, but may “crack the door” to squeezing out small and disadvantaged business owners, including those in the state’s social equity and economic empowerment programs.

“This is not an expansion for equity. It’s an expansion for folks to get out,” said Lucien, who is also a director with the Parabola Center, a Malden-based nonprofit that advocates for cannabis legalization to benefit people and small businesses over large corporations.

“I think that this was premature, and that there are other things that should have been done to ensure that those who are equity and economic empowerment had a fair chance to really cement themselves in this industry.” Like alcohol, marijuana is legal only for those 21 and up. Under current law, if people under age 21 are found with less than two ounces, they face a $100 civil citation, not arrest.

The new bill raises that threshold to three ounces. People under 18 will now only face a citation and participation in a drug awareness program for anything under three ounces as well. Ownership of a cannabis business will now require 20 percent equity, up from 10 percent previously, which industry insiders said will give flexibility to owners looking to take on more licenses or cash infusions from other entities.

At a Monday meeting of the Cannabis Conference Committee, a lawmaker panel that has been hashing out final provisions from dual cannabis reform bills passed last year, co-chairs Gómez and Donahue signed the settled version of the bill.

“The Legislature recognizes that the industry has matured, and our regulatory framework must evolve with it,” Gómez said. The measure is on pace to become the third cannabis reform bill enacted since weed legalization was approved by ballot referendum in 2016. The first, in 2017, created the CCC.

The latest, in 2022, created the Social Equity Trust Fund and allowed for pushback on municipal fees that were deemed to be unfairly charged to marijuana businesses. The CCC has been mired in controversy for years, including the state auditor’s findings of poor management and potential favoritism, infighting between leadership, and the firing of Chair O’Brien, who is now reinstated after being found to have been wrongly terminated by the state treasurer in 2024. The commission was also described as “rudderless” in a 2024 report by Inspector General Jeffrey Shapiro, who urged lawmakers to appoint a receiver for the commission.

Shapiro said Monday that the conference committee’s restructuring “addresses the key governance concerns” he had previously expressed. The bill will also: create an anonymous online portal for reporting suspected illegal activity by licensed operators; require regulators to prepare new reports on cannabis taxes and public health impacts; and clarify that the CCC’s executive director reports to the commission chair, who oversees personnel and administrative matters.

In her statement, O’Brien detailed many similar plans the commission plans to undertake in the coming weeks, including “shining a bright light on testing fraud in the cannabis industry,” increasing data transparency, establishing a public tip line, and unrolling secret shopper programs before the end of the fiscal year. The new bill would also create a regulatory structure for policing business-to-business marijuana debt issues, which has ballooned into a multi-million dollar problem for the industry. The enforcement style would mirror alcohol regulations by publishing the names of delinquent businesses, defined as more than 60 days late in payment, and preventing other companies from doing business with delinquents until debts are satisfied.

The bill also restructures the medical marijuana industry, which has seen years of declining patient enrollment and medical dispensary closures. Currently, medical marijuana businesses must grow their own products, while shelling out higher licensing fees than recreational stores. The new bill slashes the grow requirement, greatly unburdening the cost of entering the sector, and opening the pathway for new medical retail licenses, which will be exclusively available to social equity businesses for two years.

The legislation also give commissioners the ability to approve advertising inside cannabis retail stores or through opt-in email lists, including running sales, discounts, and customer loyalty programs, bucking long-standing restrictions on promotional advertising at dispensaries. The bill further instructs the CCC to study and provide recommendations for regulating the hemp industry.

“This is going to make us a very attractive place for new investment dollars to kind of come in and then it will also help our current businesses scale and become more financially viable,” Dominguez said. Bryan Hecht can be reached at bryan.hecht@globe.com. @bhechtjournalism.