Despite a billion dollar market, the cannabis industry still faces obstacles en masse.
BOSTON – Recreational marijuana sales have skyrocketed in 2021 as Massachusetts emerges from the pandemic, but business complications in the industry have remained stagnant.
Massachusetts legalized marijuana in 2016, becoming the seventh state to do so. However, as the state only authorized sales in 2018, the industry got off to a slow start here.
âRight from the start, the legislature delayed everything for six months to rewrite initiatives,â said Jim Borghesani, communications director of âYes on 4â in 2016. Massachusetts was the only state to rewrite the law passed by the voters on the legalization of marijuana. .
âThere has just been a slower clearance process by the CCC than in other states and for no good reason,â Borghesani said.
The industry went on to experience major setbacks during the pandemic, such as the inclusion of cannabis retailers on Governor Charlie Baker’s list of non-essential business closures in 2020. This shocked many in the industry who were angry that they were forced to close when liquor stores were closed. not.
“We should be treated just like a parcel store,” said public law attorney Jim Smith, who frequently represents cannabis customers. âIn fact, our product is much less dangerous, much healthier and less addictive than alcohol. It’s clearly a double standard, âhe said.
The closure of these establishments has given the illicit market a lifeline in the state as the primary goal of CCC and the legalization of marijuana is to shut down these markets and create legal consumers.
âLegal products are tested and safe, no one knows what’s on those street corners,â Smith said, âbut that being said, there’s still some growth in there,â turning the illicit market into a legal market.
Zoning issues have also been a problem for marijuana license applicants in the state. On the one hand, there cannot be a dispensary within 500 feet of a school. The planned location must also comply with local municipal ordinances on marijuana establishments in their community. Institutions must also adhere to host community agreements, which may even include community impact fees of up to 3%.
âThey either have to spend a fortune to buy a place to start or spend a fortune to rent it,â Smith said.
Once an applicant has found a location, only then can they start applying for permits. The process has to go through the city or town and then they have to adhere to the host community’s agreement with the local board or city council.
Once the host community agreement is in place, applicants can approach the Cannabis Control Commission to formally initiate the process to become a licensed facility. According to Borghesani and Smith, some applicants have to wait up to 18 months before they can get their license, which means applicants can pay rent for that long before they even start making a profit.
âAt this point, you’ll need to spend between $ 1.5 million and $ 2 million just to open a simple retail store without a grow license,â Smith said.
The Social Equity Program is an initiative to address these issues, which was created by the CCC in 2018. The program “Creates sustainable pathways to the cannabis industry for those most affected by the war on drugs, the marijuana ban, disproportionate arrests and incarceration.” “
But despite free help for people interested in entering the industry, Borghesani and Smith who work with some social equity program candidates say it does not cover the cash side of the process. Many of the Social Equity Program applicants are smallholders with less access to capital than the other applicants.
âIt all comes down to access to capital, there are carry fees, consultancy fees. You can’t go to a bank and get a loan for all of that, âsays Borghesani, who has seen the candidates for the social equity program struggle directly.
Many applicants are still going through the process as the CCC continues to review more applicants.
With sales already on the rise, projections for the state’s marijuana sales appear exponential over the next several years. Despite the pandemic negatively affecting other businesses in the state, the cannabis industry continued to grow during the pandemic.
Retail sales of cannabis in the state have exceeded $ 1 billion so far, according to the Marijuana Policy Project. year. This is remarkable because total sales in 2020 were only $ 696 million, almost half of sales so far this year and only October.
Sales prove the demand is here in Massachusetts for legal marijuana, but meeting that demand has come a long way. There is a limit on the amount of products consumers can purchase from legal establishments due to lack of supply.
âSupply is just starting to meet demand,â Borghesani said, a positive sign for the industry, although the state is slower than others throughout the process.
Roesli Arena writes for the Boston University Statehouse Gazette.