Although the state of Massachusetts allows the delivery of both medical and recreational marijuana, creating a system for delivering adult-use marijuana has proven to be quite a challenge. Recently, state marijuana regulators announced that they will be moving forward with plans to allow a new class of cannabis delivery business. The move has been met with both praise and criticism from stakeholders.
On Oct. 20, the state’s Cannabis Control Commission (“CCC”) approved some changes to its draft regulations, allowing standalone cannabis retailers without storefronts to deliver products to customers’ homes. This comes a year after the state allowed the delivery of recreational marijuana but failed to create a regulatory framework to make that delivery work.
Over the months after delivery of recreational cannabis was allowed, advocates have argued that permitting delivery would help licensed businesses compete with the black market, which essentially offers free delivery, on top of reducing the barriers to entry for social equity candidates. The CCC ultimately agreed, creating a new business class that would allow licensed operators to act as a standalone company as well as buy inventory from wholesale suppliers and store it in their own warehouses.
Only applicants in the Cannabis Control Commission’s equity program will be eligible for the courier and delivery license, available for a minimum of three years, a move designed to help communities that were disproportionately affected by the decades-long war on drugs gain a foothold in the industry. According to CCC Chairman Steve Hoffman, however, not everyone is cheering the changes.
For instance, Commonwealth Dispensary Association president David Torrisi has stated that his group is “very disappointed” with the decision. “I don’t think the commission has done enough analysis to determine the impact on the supply chain and the marketplace,” he said. The new direct-to-consumer model has also been criticized by the Massachusetts Municipal Association, which represents city and town governments, raising the same concerns as a bipartisan group of 19 lawmakers.
“The draft regulations create a shadow direct to the consumer marketplace not governed by the licensing requirements and regulations of marijuana retailers,” the lawmakers wrote in a letter to the Cannabis Control Commission. “These draft regulations also significantly change the landscape for cities and towns after many had already engaged in intensive, community-wide conversations about the number and types of marijuana establishments their communities wished to host.”
According to the CCC commissioner, the new model may involve some “unknowns,” but it is crucial as it puts a “dent” in the illicit cannabis market and uplifts the communities that were affected most by the drug war. “We still have a lot of work to do on equity, but I would say this is a giant step forward,” said Hoffman.
An interesting cannabis company you should watch is Sugarmade, Inc. (OTCQB: SGMD). This California-based marijuana delivery company also supports the quick-service restaurant industry, and the company’s prospects seem bright with the ongoing pandemic, which has boosted the activities of delivery companies.
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