By J. MICHAEL LEVESQUE It seems that whenever Rhode Island wants to break new ground with significant new policies, the mantra is always "lets see what Massachusetts is doing!" History has repeated itself in the new world of recreational cannabis. Today,
It seems that whenever Rhode Island wants to break new ground with significant new policies, the mantra is always “lets see what Massachusetts is doing!”
History has repeated itself in the new world of recreational cannabis.
Today, 18 states have legalized the recreational use of cannabis, with a wide range of outcomes regarding industry growth, competitive profile, and overall sustainability.
Massachusetts has taken the lead by developing a regulatory framework that protects both the state and consumers by creating an environment that reflects a healthy balance between centralized licensing and enforcement authority – housed in the Cannabis Control Commission (CCC), and local autonomy in the selection and vetting of the participants and applicable zoning enforcement.
For instance, the CCC handles the regulations, compliance and enforcement, removing the burden from municipalities and promoting regulatory consistency and predictability.
A municipality can refuse to issue cannabis licenses (the total amount allowed is tied to the number of liquor licenses issued in each city or town) or put in place specific constraints; the only requirement is that if a community chooses to issue retail licenses, at least 20% of the outstanding number of liquor licenses must be issued.
Other regulatory highlights include:
The number of cultivation licenses is under local control, but because cultivation is capital intensive and there is an overall CCC limitation of no more than 100,000 square feet of canopy for any one licensee, state-wide growth in cultivation has been controlled and measured.
The CCC requires that applicants for licenses have in place a host community agreement that has been vetted by the municipality.
The host community agreement requires that the applicant pay the host community a community impact fee, which, when combined with the local share of sales tax, gives the municipality a meaningful economic stake in the success of each business.
Local zoning is preserved, and special permits must be in place before construction.
Massachusetts maintains a Social Equity Program that provides relative training and certain advantages for those impacted by the war on drugs, marijuana prohibition, disproportionate arrest and/or incarceration. As of August 2021, the CCC has deemed 986 SEP applications complete and, of this group, 46 have provisional license approval and 9 have final licensure.
The limitations on the number of retail licenses (3) and the amount of cultivation (100,000 square feet of canopy) that any one entity can have has had a positive effect on maintaining a balanced and healthy competitive environment of both large and small licenses.
The effectiveness of the Massachusetts regulatory structure and approach has resulted in rapid, yet controlled growth.
At the end of August 2021, cumulative gross sales revenue statewide surpassed the $2 billion mark for the three years since the first retail stores opened for business.
Additionally, the overall pricing environment has remained higher and less volatile than the national average, allowing profitability that has supported constructive market development.
Our neighbors in Massachusetts have done a lot of things right. They are allowing businesses to succeed while protecting the consumer and making up for some historical missteps.
This is not to say that there couldn’t be some improvements, but Rhode Island might have been smart waiting to see how things worked out relative to recreational use.
We know that recreational cannabis is coming to Rhode Island. Let’s hope that we do not make the same mistake that Connecticut has apparently made – surrender the creation of good, higher paying jobs and robust funding for the state and municipalities for an overreliance on social equity.
As Massachusetts has shown, all of these elements can come together for the good of the consumer, and the state.
J. Michael Levesque, an occasional contributor, is a former Mayor of West Warwick and United States Commissioner for Employment Policy.
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