Massachusetts Inspector General Jeffrey Shapiro urged the state legislature to place the Cannabis Control Commission into receivership during a hearing before the Joint Committee on Cannabis Policy.
The agency has been without a permanent chair or executive director for about a year now. Shapiro highlighted the fact that licensing approvals have declined without permanent leadership, while the implementation of new regulations has also slowed down. If the agency is placed into receivership, a legislature-appointed individual would take over the day-to-day operations of the CCC until a new governance structure could be put into place.
“Concerns about governance at the Cannabis Commission have been a significant area of review for the IGO,” said Shapiro at the July 9 hearing. “Since 2017, it has experienced an unusually high level of turnover and publicly aired disagreement that, I would suggest, impedes its ability to focus and fully meet its potential to become a mature and fully functional state agency.”
Shapiro, first recommended that the “rudderless” CCC go into receivership in a June 18 open letter, calling for urgent action, as the legislative session ends just weeks away on July 31.
State Treasurer Deb Goldberg suspended Chair Shannon O’Brien in September 2023, followed by an ongoing dispute between commissioners over which of them should serve as acting chair in the interim. In July 2023, the commission’s executive director, Shawn Collins, went on family leave with the intent of formally resigning once his leave was up.
O’Brien then sued Goldberg in Suffolk Superior Court, seeking an injunction to prevent a series of closed hearings on whether she would remain in the position. O’Brien ultimately lost that case in the state appellate court on Feb. 6. The final hearing took place on June 17, and O’Brien had until July 1 to submit any additional written testimony on her behalf. Goldberg is currently weighing that information before issuing a formal decision, according to a spokesperson with the Treasurer’s office.
Shapiro noted that CCC bylaws grant the same authority to both the commission chair and the executive director – two positions that are technically vacant as interim replacements serve in those roles.
At the CCC’s monthly meeting on July 11 — two days after Shapiro testified — the commission voted to release a draft version of the governance documents that are still being worked on in executive sessions. The commission also said that it was in the process of preparing the minutes from the closed session with the intent of releasing them to the public in the near future.
Aside from that vote, the commission did not address the hearing and the call for receivership.
The state has previously placed government agencies into receivership, including the Chelsea Housing Authority, as well as the school districts of Holyoke, Lawrence and Southbridge. This would be the first time an agency within the state government’s executive branch is placed into receivership.
Shapiro lists CCC leadership concerns
Shapiro listed a number of concerns involving CCC leadership from the previous four years, including former Chair Steven Hoffman’s unexpected resignation during the spring of 2022, just six days after the commission announced that it would soon start a mediation process to help prepare governance documents. Hoffman still had five months left in his five-year term.
The mediation remains ongoing after over two years at a cost of more than $160,000.
“While the agency I lead is more widely known for its fraud investigations, make no mistake about it, we are equally concerned about the mitigation of and elimination of waste of public funds and resources,” said Shapiro. “Waste is like a leaky faucet. You don’t really know the amount of water that has gone down the drain until you receive the water bill, and then it’s too late. The water and the money are wasted.”
Shapiro argued that the ongoing strife was preventing the agency from growing a new industry that is intended to help those who were harmed by the war on drugs.
The month of O’Brien’s suspension happened to be the last month in which the CCC approved at least 10 new provisional licenses. In the first nine months of 2023, the CCC averaged 13 new provisional, 12 final and 81 renewed licenses. After O’Brien was placed on leave, the average dropped to 4.5 provisional, 10 final and 54 renewed licenses.
“These tend to be small entrepreneurs that are trying to get a foothold in,” he said. Shapiro mentioned that given cannabis’s illegal status at the federal level, it’s hard for businesses to obtain credit. “And so any of these things that cause delay, either it costs more money than it needs to, or it can bankrupt people before then can even open their doors.”
In January 2022, Lorna McMurrey died at a Trulieve (TCNNF) grow site in Holyoke, Mass., after suffering breathing problems while working in a dust-filled cannabis grinding room. Shapiro noted that the CCC’s executive director learned about the death shortly after it occurred, but the commissioners were not informed until nine months later during their October 2022 meeting.
Shapiro also criticized the commission for accidentally releasing a spreadsheet with over 17,000 rows of employee personal information to a cannabis blogger and for failing to remove the two-driver rule for deliveries, despite voting to approve such a change last December.
“I do not make this recommendation lightly, but I do make it urgently. Respectfully, I submit that waiting until the next legislative session to begin is fraught with risk and uncertainty,” said Shapiro. “That will impact an emerging industry that is already struggling to gain a solid footing.”
