House passes bill overhauling cannabis laws, CCC

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The House approved a significant overhaul of marijuana oversight in Massachusetts on June 4, passing a bill that would downsize and reorient the scandal-plagued Cannabis Control Commission that has kept tabs on the legal industry since it launched almost eight years ago.

The bill (H. 4187), which passed 153-0, would also regulate and tax hemp-based products, raise a cap on retail license control, and make structural changes to the medical marijuana side of the industry.

“Overall, this bill provides comprehensive and reasonable reform measures to our existing cannabis laws,” Cannabis Policy Committee Chairman Daniel Donahue said on the House floor. “We are pursuing these reforms because we want our cannabis industry to succeed and thrive, and because we want to live up to the promises explicit in our commitment to social equity when recreational cannabis was first legalized.”

Frustration with the slow pace of regulatory changes, headline-grabbing internal conflicts at the CCC, and a plea from the inspector general for the Legislature to intervene at the “rudderless agency” combined last summer to get lawmakers thinking more seriously about a response.

House Speaker Ronald Mariano recounted on June 4 how he went to Donahue last year to say “we’re going to have to fix this.” He said Treasurer Deborah B. Goldberg’s removal of CCC chairwoman Shannon O’Brien had been dragged into court by that point, a long-running saga that has shined a light on internal strife at the CCC. That directive to Donahue led to a series of hearings and conversations that resulted in the bill before the House.

“He did the work. You could talk to him, and he could explain the process. It got us where we thought we had to take it away from the treasurer,” Mariano said before yielding to Donahue to give a more thorough explanation of the House’s thinking around accountability at the CCC.

Today, the CCC is a five-commissioner independent body, with appointments made singularly and jointly by the governor, attorney general and treasurer, with the treasurer selecting the chair. Under the House-approved bill, the CCC would be consolidated entirely under the governor. The state’s executive would appoint all three commissioners and select one of them as chair (who would be the only full-time commissioner). The CCC would be “subject to the laws applicable to agencies under the control of the governor.”

Asked what makes the CCC’s existing model unworkable, Mariano said it was a structural problem but gave a conflicted explanation.

“It was created by a ballot question that had no rhyme or reason to it … there was no accountability,” he said.

The speaker, who started his scrum with reporters by raising the subject of “legislation by referendum” and the trend of advocates going around a slow-moving Legislature to make laws at the statewide ballot, added, “We’ve been railing against government by referendum, and this is a perfect example why it doesn’t work.”

The CCC’s existing structure is largely modeled on the Gaming Commission, where five full-time members with specific areas of expertise are appointed by the governor, treasurer and AG. But Mariano claimed on June 4 that “the problem is they weren’t written by the same people.”

“The gaming stuff was written by House people,” he said. “The people in the marketplace wrote this bill, and they weren’t interested in controlling it, in making sure there was accountability up and down the line. As a matter of fact, this was a rush to get into the market. Everyone thought they were going to get rich.”

The 2016 ballot law that legalized non-medical marijuana called for a three-person CCC entirely under the control of the state treasurer, similar numerically to the structure the House is pursuing with the bill it passed on June 4. By the time the Legislature delayed and then rewrote that law in the summer of 2017, lawmakers had decided to move the CCC onto an independent footing, expand it to five commissioners, and to split appointing authority three ways.

Mariano, who was majority leader at the time, was the lead House negotiator on the 2017 law that structured the CCC. The structure that was put in place largely mirrored the House’s approach to standing up the CCC.

“This is legislation by referendum, and this is the problem, no one really focused on the writing of the ballot question on how this would be administered. And when it hit, the public had no idea what the problems were going to be and where they were going to be,” Mariano said on June 4.

Last summer, IG Jeffrey Shapiro’s office said it determined that the Legislature’s 2017 rewrite of the 2016 ballot law “is unclear and self-contradictory and provides minimal guidance on the authority and responsibilities of the CCC’s commissioners and staff.” The office said its review of the Legislature’s 2017 rewrite “affirmed that this confusion has contributed significantly to the current situation at the CCC.”

Mariano was not available to clarify his comments later on June 4, but a spokesperson sent a statement saying his “main point was that the Legislature was responding to a law that was passed by a referendum, which created a new industry outside of the typical legislative process, forcing the Legislature to address a number of unknowns.”

“In order to safely and effectively carry out the will of the voters, the Legislature has been forced to revise the original language multiple times. The legislation that the House is voting on today is better because of what we have learned since 2016, and establishes a new structure, different from the one that the ballot initiative spelled out,” Mariano spokesperson Ana Vivas said.

The bill the House passed also seeks to address intoxicating hemp-based products that largely fall into a gray area of the law and between the regulatory cracks by banning their sale without a license and setting up a new framework to regulate and tax them. Hemp beverages could only be sold by retailers licensed by the Alcoholic Beverages Control Commission to sell all alcohol and all hemp-based products would need to be registered with the CCC.

“This ban and accompanying regulatory structure will help provide guidance and clarity on hemp products, removing those which are unregulated, of unknown origin or composition, and too easily accessible to minors,” Donahue said on June 4.

The House bill adjusts the existing cap on retail licenses any one operator can hold. The current limit is three, and the House bill would raise the cap on retail licenses to six over a three-year period (increasing first to four, a year later to five and finally to six). Opponents of that idea have slammed it as a “gift to corporate cannabis and a death sentence for local and social equity businesses.” The existing three-license caps would remain in place for cultivation and manufacturing.

On the medical side of the legal marijuana world, the bill eliminates the requirement that medical marijuana businesses be “vertically integrated,” meaning they must grow and process all the marijuana they sell. Patients and advocates have been calling for that change for years, saying the medical-only options have become scarce across Massachusetts since cannabis was legalized for non-medical use.