Cannabis

5 Years of Legal Cannabis Sales in Massachusetts

The passing of 2023 marks the fifth anniversary of adult-use (recreational) cannabis sales in Massachusetts. While the road to this moment has been far from smooth, a 2021 UMass Amherst/WCVB poll found that 61% of respondents said legal adult-use cannabis has overall been positive for the state. In recognition of this milestone, here’s a look at five key storylines from the dawn of adult-use in Massachusetts.  

Launching a regulated adult-use marketplace 

While a half-dozen states commenced sales before the Bay State’s first transaction, this was the first regulated retail cannabis market on the east coast. The distinction was another notch in Mass.’ trailblazing belt, but it came with additional burdens for the fledgling industry, not to mention residents that lived near retail operations.  

When the first sales opened on November 20, 2018, customers had the option of visiting Cultivate Holdings in Leicester, and New England Treatment Access (NETA) in Northampton. These two stores had to handle the demand for not only the entire state but also the northeast region of the country.  

The timing of the openings – the week of Thanksgiving – allowed, if not encouraged, the first instance of “weed tourism” to Mass. The initial sales were robust, but were characterized by long lines, traffic snarls, and some minor incidents like littering and public urination.   

A few months later another test emerged with the opening of NETA’s location in Brookline. This store was notable because it was the first to open adjacent to Boston and to be accessible by public transportation. Facing the impossible task of serving the entire cannabis customer base almost singlehandedly, relations between NETA and its host community quickly deteriorated. Residents called for reduced hours and appointment-only sales to tackle the crowds and poor behavior. The situation became fodder for residents across Mass. to oppose dispensaries in their communities, lest they invite the same problems.  

Throughout this strife, industry proponents were quick to point out that the issues were a product of the lack of retail options available to Boston’s population. Imagine if the city had a single liquor store? Sure enough, with the opening of more dispensaries in and around Boston, demand was able to spread across multiple locations. The lines that were ubiquitous with the early days of adult-use cannabis sales all but vanished.

Equity 

The passage of Question 4 in 2016, which initiated the legalization of adult-use cannabis, came with the charge of rectifying the wrongs of the War on Drugs. Tackling this at the onset of legalization, rather than down the road, represented another pioneering step by the Commonwealth.  

Among these efforts were carving out opportunities for those directly affected by the policy of prohibition through a prioritized Economic Empowerment (EE) status to ensure they would be able to participate in the regulated market. In March of 2020, Massachusetts celebrated a fantastic milestone when Pure Oasis opened in Dorchester. The dispensary was not only the first in the city of Boston, but it was also the first EE-run retail location. Further victories for equity in cannabis would prove more difficult to come by, however. 

Cambridge saw a prolonged and, at times ugly, process to establish its own equity program that went beyond prioritization. The city took the additional step of limiting adult-use license approval to EE applicants exclusively for two years, which meant that existing medical cannabis operators in Cambridge (all of which did not qualify as EE) would not enjoy the same prioritization for adult-use conversion that had been offered in other municipalities via state statute. Cambridge’s equity policy was initially approved in September 2019, but no locations had opened as the expiration approached, so it was extended in 2021. Roughly six months later, Cambridge’s first adult-use dispensary, Yamba Market, opened in Central Square.  

Despite well-intended aspirations and policy measures, equity-run businesses have not gained a substantial share of the market, representing under 11 percent of the local industry. At the heart of this is the highly expensive and complicated licensing process.  

The Cannabis Control Commission (CCC) has offered technical assistance to address one of these issues and, last year, the Commonwealth has established a fund to address gaps in capital needs. The creation of the Cannabis Social Equity Trust Fund was a critical development in tackling one of the key obstacles, but its coffers were bare a year later due to an error in the wording of the law. Fortunately, this issue has been addressed and the fund will begin to amass money to disperse to equity applicants.  

This noble ambition is arguably the most contentious matter stemming from legalization, with scrutiny of the objective popping up regularly in the past five years

Revenue is booming, but will it last? 

As predicted, cannabis has been a boon for local and state tax revenue. In September the CCC announced that gross sales had surpassed the $5 billion mark – a mere eight months after eclipsing the $4 billion milestone – with almost 20 percent of that total representing local and state revenue.  

With the exception of the COVID-driven three-month shutdown of adult-use sales in 2020, business has been steady since it got up and running. The $1 billion sales mark was reached in just under two years and a year and half later, that total reached $3 billion.   

There is a reason to be skeptical of the likelihood that this trend will remain status quo in the future, however. Massachusetts benefitted greatly from its first mover advantage in the northeast. With the rapidly increasing number of states opening up adult-use cannabis markets of their own, Massachusetts will gradually see less business from out of state customers.  

That lower demand will likely see a rise in dispensary closures, particularly in border towns that had relied on tourism. Just under a year ago, a Northampton shop shut down – the first since adult-use sales commenced – and more are bound to follow in the coming months and years as the industry grows and matures.

Disfunction at the CCC 

Following its establishment in 2017, the inaugural CCC ushered in the framework to create, regulate, and oversee the adult-use marketplace. Their work was not without criticism, but it was largely carried out in a conventional manner.  

By 2021, four of the five commissioners had been replaced with the Chair following suit a year later. The early tenure of current Chair Shannon O’Brien has been rocky, virtually from the start. 

First up was the awkward revelation that O’Brien was listed as an owner on a license application by a prospective cultivator, Greenfield Greenery LLC, which was pursuing its final license from the CCC. O’Brien denied continued involvement with the organization dating back months before her CCC appointment. A few months later, O’Brien was cleared of any wrongdoings following an investigation and Greenfield ultimately received approval of its license. 

A few months later O’Brien again made waves when she surprised her fellow commissioners by announcing that Executive Director Shawn Collins was planning to resign at the end of the year (which was recently formalized) and that he would be going on family leave almost immediately. Her colleagues were not only caught off guard by the unprompted announcement, but also by her characterization of the CCC being “in crisis.” O’Brien apologized for her behavior at the following CCC meeting.  

In September, O’Brien was suspended by State Treasurer Deb Goldberg, who cited “several serious allegations” about the Chair’s behavior. O’Brien rebutted by filing a lawsuit against Goldberg, which is currently on hold so the two can meet

Declining coverage 

Despite the money the industry brings in, it’s clear that cannabis is not as buzzworthy as it was prior to the pandemic. Cannabis reporters have not been immune to the significant changes broadly affecting the news industry. 

Nowhere is this more evident than at The Boston Globe. At one time, The Globe had three dedicated cannabis reporters who also published a daily roundup of links and a weekly newsletter in addition to the usual reporting. Two of the reporters have left the publication while the other was reassigned to another beat. The Globe has not named a new beat reporter, instead assigning stories to reporters in adjacent beats (depending on the focus of the news).  

Only a few reporters statewide have cannabis explicitly stated in their bio, but it’s predominantly an ancillary focus to more typical beats like health care, real estate development, or politics.  

Some of this is due to the gradual normalization of cannabis, as dispensary locations have become fairly ubiquitous around the state, which can be seen as a positive. That being said, reduced coverage is always unfortunate, regardless of the focus, and especially when it pertains to a regulated industry where policy is shaped at public meetings. 

Although cannabis has taken great strides in public acceptance through legalization and regulation, we still lack critical understanding of the effects of use due to the federal prohibition. With new research emerging on a regular basis, not having appropriate authorities that can scrutinize and contextualize their findings is a big loss for Massachusetts.

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