Updated: Jun 1, 2020
On May 27th, the Massachusetts Cannabis Control Commissions (CCC) announced the long-awaited start of the application process for Delivery-Only licenses. These licenses are significant because, unlike other licenses available until now, they (along with Social Consumption site licenses for which the application process is not yet open) have been set aside for Social Equity and Economic Empowerment applicants for the next two years. Given the painfully slow pace at which disproportionately impacted individuals and communities are being included in the fast-growing Massachusetts cannabis industry, this is a welcome development.
Like many social equity initiatives however, the creation of Delivery-Only licenses set aside for Social Equity and Economic Empowerment applicants in Massachusetts has been well intentioned but less than ideal. In addition to delays in rolling out the program, Delivery-Only licenses are subject to restrictions that seem likely to severely depress or even eliminate their potential value including, most notably, (a) prohibiting a Delivery-Only licensee from also holding a retail license, and (b) requiring body cameras to be used to record all deliveries. These provisions have led to widespread concern over both profitabiity and privacy. However, the CCC just published a document entitled Frequently Asked Questions About Delivery (Delivery FAQs) that appears to rewrite, or at least invite requests to waive, these rules. Let's take a closer look.
Whether a Delivery-Only Licensee can also Hold a Retail License The Massachusetts Adult-Use Regulations seem, at least to this reader, to clearly state that a Delivery-Only licensee cannot also hold a retail license. Here's how we get there. First, the regulations define a retail licensee as an entity licensed to sell to consumers from a retail location accessible to the public. They define a Delivery-Only Licensee, on the other hand, as an entity licensed to deliver directly to Consumers "and that does not provide a retail location accessible to the public." (emphasis added) 935 CMR 500.002. To remove any doubt, the regulations state elsewhere that a Delivery-Only licensee "shall not have a retail location accessible to the public." (emphasis added) 935 CMR 500.050(10)(a). So, if an entity holding a retail license is required have a retail location, and if an entity holding a Delivery-Only license can't have a retail location, then the same entity can't hold both a retail license and a Delivery-Only license, right? That seemed like the clear answer until the Delivery FAQs were published. They are drafted in a Q&A format, and include the following passage:
Can a Delivery-Only applicant or licensee have, or obtain, a Marijuana Retailer license? Yes. A Delivery-Only applicant or license can have or obtain a Marijuana Retailer license. Please note that for the purposes of license limitations, Delivery-Only licenses will be counted as a Marijuana Retailer. Therefore, no person or entity may be a Person or Entity Having Direct or Indirect Control, as defined by 935 CMR 500.002, over more than three (3) Marijuana Retailer and Delivery-Only licenses combined. For example, XYZ Corp. will reach its three (3) license limit for Marijuana Retailers once it obtains two (2) Marijuana Retailer licenses and one (1) Delivery-Only license.
Wait, what? That sounds like a complete reversal of the Adult-Use Regulations cited above, doesn't it? This is great news for proponents of social equity, if a bit unsettling for those of us responsible for interpreting the Adult-Use Regulations.
Whether Body Cameras are Required to Record all Deliveries One of the most controversial and onerous requirements imposed on Delivery-Only licensees is that they are required to wear body cameras and record all deliveries. 935 CMR 500.110(8)(b). Needless to say, this has caused a lot of concern about the use - and potential misuse - of such recordings. While the regulations require recordings to be deleted after 30 days, they must be retained for the duration of any CCC investigation, they must be made available in response to a search warrant from law enforcement, and they may even be seized by law enforcement without a warrant under "exceptional or emergency circumstances where time or opportunity to apply for a warrant is lacking." 935 CMR 500.110(8)(b). In the current political climate, it is not hard to imagine why some communities will feel threatened by the prospect of being recorded and will not use this service, reducing market opportunities for Delivery-Only licensees.
Here, too, the Delivery FAQs signal an abrupt change of course. In another Q&A exchange, they state:
Does the Commission accept waivers on the body camera requirement or the requirement to have two agents in the delivery vehicle? An applicant or licensee can request a waiver from any regulatory requirement. The waiver request form is available on the Commission’s website located here: https://mass-cannabis- control.com/forms-and-templates/. All waiver requests are reviewed and will either be approved or denied.
Come again? The application process for Delivery-Only licenses has just started and the CCC is already telling applicants how to submit requests for waivers from the body camera requirement? It's hard to imagine a less subtle way for the CCC to broadcast its willingness to at least consider - right from the outset - granting waivers of the body camera requirement. Again, there is no complaint here, just a growing realization that with each new publication the CCC is "refining" the rules pursuant to which the Massachusetts cannabis industry will move forward. In this case, at least, the changes are for the better. Here's hoping the trend continues.