Worcester Business Journal

26 Worcester Business Journal | December 25, 2023 | wbjournal.com Cannabis businesses to struggle in 2024 Increasing competition among in-state and out-of-state businesses, along with infighting among regulators, will put a strain on marijuana BY ERIC CASEY WBJ Staff Writer "C haos" was the infamous word used by suspended Massachusetts Cannabis Control Commission Chair Shannon O'Brien when she attempted to ring alarm bells over former Executive Director Shawn Collins' departure from the agency last summer. is word would probably be a fitting description for the cannabis industry in general during 2023 and don't expect that chaos to dissipate in 2024. CCC reaches a crossroads e September suspension of chair Shannon O'Brien at the industry regulator Cannabis Control Commission and the subsequent lawsuit she filed have rocked the state's marijuana industry. With executive director Shawn Collins resigning in December and rumors swirling about more key departures from the agency, 2024 is shaping up to be either the year that the commission rights itself, or the year that state lawmakers intervene with reforms or more oversight. More fallout from business closures Hundreds of local cannabis industry workers lost their jobs in 2023, and companies who provide services to canna-businesses have struggled to collect payments. Municipalities have become more reliant on taxes and other revenue raised from cannabis businesses. As more cannabis companies struggle with crashing prices and oversaturation, don't expect the fallout to be confined to just business owners. Outside competition Every state bordering Massachusetts – except New Hampshire – has legalized cannabis for adult use, eliminating the need for out-of-state consumers to travel to the Bay State to their marijuana. New state markets aren't the only threats to the profits of local cannabis business owners: Changes to federal laws have allowed manufacturers to extract THC from federally legal hemp plants and sell intoxicating products across state lines, undermining the state's control of the cannabis economy. Expect more concerns about hemp- derived products in 2024. W Top cannabis news in 2023 Audit: $10M in potentially unsafe cannabis product sold to Massachusetts consumers Amid its administrative turmoil and criticism from industry businesses, the Massachusetts Cannabis Control Commission was found to have allowed more than $10 million in marijuana products whose testing approvals had expired to be sold to consumers, according to an audit released Sept. 26. Massachusetts State Auditor Diana DiZoglio released a report from an audit of the CCC, which found the agency did not meet all requirements to ensure consum- er safety during the audit's time frame. e purpose of the audit was to determine whether the CCC sufficiently ensured recreational marijuana products met safety standards.e audit was for the period Jan. 1 2019 to Dec. 31, 2020. e audit found during that period more than $10 million in cannabis products was sold to con- sumers more than a year aer it was tested for contaminants. e report detailed the CCC did not properly ensure that establishments and test- ing laboratories reported positive pesticide tests to the CCC within 72 hours, a requirement per state law. e findings come amid concerns voiced by Massa- chusetts cannabis testing firms, which claim the CCC's rules discourage companies and testing firms from ensuring the safety of products sold to customers. In the report, the auditors made recommendations for the CCC to implement controls to ensure consumers are not able to purchase products with expired safety tests and should develop policies to ensure accurate reporting from laboratories. According to a press release accompanying the report, commissioners at the CCC have responded to the audit and are taking measures to improve the areas of concern. Since the summer, the CCC has gone through signif- icant administrative turmoil, as first CCC Chairwoman Shannon O'Brien announced Executive Director Shawn Collins would leave his role, a claim which Collins later walked back before resigning in December. en, in September, State Treasurer Deborah Goldberg suspend- ed O'Brien from her role. After months of turmoil, Cannabis Commission leader officially announces resignation Ava Callender Concepcion, acting chair of the Mas- sachusetts Cannabis Control Commission, started the Nov. 16 agency meeting by announcing that Shawn Col- lins, the executive director of the commission and the person most responsible for its day-to-day operations, would resign effective Dec. 4, the same announcement alluded to July by then-Chair Shannon O'Brien. "Serving as the commission's inaugural executive director has easily been the most profound and reward- Shannon O'Brien, suspended chair of the Cannabis Con- trol Commission PHOTO | ZACHARY COMEAU Sam Barber, the founder and former leader of the cannabis firm Cultivate in Leicester, tends to plants in this 2019 photo. Barber sold the company to national firm Cresco Labs in 2021, and the Leicester facility operates under the Sunnyside brand.

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