The Massachusetts Cannabis Control Commission voted to extend the period in which social equity candidates are exclusively allowed to own and control delivery and courier licenses.
The one-year extension includes a timeline for studying the economic impact of recent regulatory changes that apply to the two license types that allow home delivery sales. The vote was 3-0 at the March 13 meeting.
The Bay State has two different types of licenses that allow operators to bring cannabis directly to customers at their home. The delivery license type allows a company to store wholesale product in their own warehouse for sale, while the courier license type allows a company to pick up a customer’s order from a local dispensary and bring it to the customer.
Delivery and courier companies have struggled to establish themselves and survive. Aside from the falling price of cannabis in Massachusetts and the scarcity of available capital, these companies had to endure a mandatory two-driver rule, essentially doubling labor costs. Recent changes are expected to make it easier for these businesses to survive, but they have not been in effect long enough for the CCC to be able to properly assess their impact.
In the Massachusetts cannabis market, social equity status requires an applicant to have lived in a disproportionately impacted area for five of last 10 years and have an income that does not exceed 400% of area median income; to have a cannabis related conviction or is married or the child of someone who does; or is of “Black, African American, Hispanic or Latino descent.”
Concerns about litigation
The original three-year exclusionary period — from April 1, 2022, to April 1, 2025 — faced opposition when it was originally announced, which CCC interim Chair Bruce Stebbins referenced when arguing that he and his fellow commissioners should be mindful of potential lawsuits when justifying and defining the proposed extension.
“We were all early in our tenure when this exclusivity period started, but there was litigation that was threatened against the commission for this exclusivity period,” said Stebbins. “We want it to be able to fend off any potential legal challenges and save our legal team some headaches.”
The Commonwealth Dispensary Association sued the state on Jan. 13, 2021, over the then-new license exclusivity period. About two weeks later, amid outcry in response from local advocates, the CDA withdrew its lawsuit.
The regulations allow for the commission to extend the exclusionary period for any length following a determination that the period’s goals to “promote and encourage full participation” have not yet been met.
The criteria for that determination includes participation rates of those impacted by the War on Drugs and people of color, the number of active delivery licenses and business performance relative to other license types, and the financial feasibility of their continued participation in the industry.
The CCC formed a working group to study the impact of the delivery exclusionary period in early 2024. The group has yet to formally produce a report on their findings, though it has indicated that the period’s goal has not been met.
There were 18 delivery companies and 10 couriers with commence operation orders as of March 13, according to the CCC. Another three courier licenses have final approval.
Since the working group was formed, the CCC changed some of its regulations in an attempt to help struggling operators. This includes allowing one driver in a delivery vehicle instead of requiring two, which went into effect Nov. 22, 2024, and the creation of the Cannabis Social Equity Trust Fund on Sept. 24, 2024.
“The working group as of right now would recommend a 12-month extension allowed under the regulations in order to continue analyzing collecting data and to study recent changes,” said Michael Baker, CCC deputy general counsel. “In order to make sure that we’re capturing the data to have a more accurate snapshot of the current climate, it would be really important to include those recent data points stemming from those recent regulatory amendments.”
As part of the extension, a report must be finalized and presented at a public meeting no later than Sept. 11, 2025. The period would end April 1, 2026, unless the CCC decided to vote for another extension.
