Worcester Business Journal

10 Worcester Business Journal | July 6, 2020 | wbjournal.com Big weed, little weed e legal requirements placed on cannabis companies give advantages to multi-state organizations with deep pockets F or the average Central Massa- chusetts consumer, it may not be immediately obvious the artisanally decorated canna- bis retailer in their quiet mill town is owned by a multi-million dollar, multi-state company whose CEO lives on the other side of the country. Shops skew small, have limited parking space and, as quotas detailed in their licensing applications promise, are typically operated in large part by locals from the surrounding towns. eir storefront signage, as is oen mandated by the towns they're located in, is understated, and oentimes, their buildings are nestled away from view. In a state where the oldest adult-use retail shop is less than two years old, name recognition is necessarily low. In other words, a lot of these brand names feel brand new, even if they aren't. From both a policy and logistical per- spective, this makes sense. Massachusetts requires medical cannabis facilities be vertically integrated, meaning a company has to single handedly grow, manufac- ture and manage its own retail operation. Setting up a medical shop requires major access to capital, while traditional bank loans remain unavailable, due to the industry being federally illegal. At the same time, when Mass. voters turned out to the polls to legalize recreational-use cannabis in 2016, aer medical cannabis had already been allowed, they voted to enact a law which included a section giving recreational licensing priority to pre-established medical cannabis companies. From a le- gal standpoint, Mass. voters openly and explicitly gave preference to cash-flush corporations and/or the venture capital backing them. is leg up has resulted in large, deep-pocketed cannabis companies cor- nering the market and expanding their operations as locally-owned businesses scramble to catch up, and at the same time is pushing out entrepreneurs of col- or and leaving regulators ping-ponging between their desire to bolster the local economy and their charge to implement the law. Massachusetts Cannabis Control Commissioner Jen Flanagan, who pre- viously served as a state senator, said she didn't think a lot of people realized those preferences were codified from the start. While she believes promoting local- ly-based cannabis businesses is a priority for the commission, when implementing cannabis law as written, the regulatory and oversight body has its hands tied. "We have to coexist with the big oper- ators," Flanagan said. To that end, she said, the CCC has policies in place to preserve local access to the market, which generated more than $400 million in revenues last year. ere are residency requirements for two types of small business licenses: the cannabis microbusiness license and the cra marijuana cooperative license. Microbusinesses are co-located cultivators and manufacturers limited to 5,000-square-foot operations who may not purchase more than 2,000 pounds of cannabis in a single year. Co-ops are limited to 100,000-square-foot canopies – spaces where mature plants are kept – and may cultivate, obtain, manufacture, process, package and brand cannabis products for other cannabis companies, but not sell those products to consumers. Massachusetts residency is required to be eligible for the state's social equity program, which provides free training for working in the industry. No residen- cy is required for any other license. Investment in the community While regulators cannot require cannabis firms to be from Massachusetts, they can require they submit a plan to BY MONICA BUSCH Worcester Business Journal Staff Writer Where Worcester cannabis companies do business There are five operational cannabis dispensaries in the city of Worcester. They run the gamut from locally owned and operated to large, multi-state, investment-firm backed operations. Resinate Massachusetts Diem Massachusetts, Oregon Good Chemistry Massachusetts, Colorado, Nevada Mission Massachusetts, Maryland, Michigan, Pennsylvania, Illinois and Arizona The Botanist Massachusetts, Maryland, New York, Florida and California Source: Company websites Dispensary State(s) where it does business

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