Legal Regulations for Cannabis Retailers in Massachusetts

Posted by Tim Brennan on Sep 12, 2017 2:36:37 PM
Tim Brennan

On December 15, 2016, recreational marijuana use became legal in Massachusetts. I've reviewed the new legislation--along with the changes made by the legislature this July--and recognize its complexity and the significant regulations marijuana retailers must follow. The Governor has already signed a bill extending deadlines for regulations, including changing the date retail marijuana stores will be able to operate to July 1, 2018. The newest amendments are awaiting the Governor's signing.

The majority of legal considerations regarding the new law that retailers must follow can be found in Massachusetts's General Law Chapter 94G. Many of the exact regulations will be promulgated by the Cannabis Control Commission. Retailers of marijuana products should be aware that nearly all marijuana products and accessories are regulated under 94G, including drug paraphernalia like pipes and bongs, items used for packaging and storing marijuana products, and any product, including topical products and tinctures, that contain marijuana or marijuana extracts. Furthermore, personal use is very limited (to one ounce per person, or if at a primary residence ten ounces per person or a total of 12 plants in multi-person households). Additionally, individual towns and cities may adopt regulations that are stricter than those required by the Cannabis Control Conditions. Local limits on the number of retail shops, where these shops can be located, what hours the shops can be open, etc. may be imposed. The updated legislation requires local voter referendums to ban or limit commercial marijuana options in communities that voted "yes" on the ballot question. Local officials may impose restrictions on retail shops in communities that voted "no" on the ballot question.

Retail businesses will have regulations much stricter than the average business. For example, alarm systems; labels that identify the product as containing marijuana; packaging that is not easily accessible to children; clearly marked single servings; and controlled entrances are likely. Random sampling to ensure accuracy of labeling as well as safety of products may be conducted. Businesses should be aware that the law also excludes those under 21 from processing, manufacturing, delivering, or selling marijuana products and accessories. Like tobacco, advertising towards children is restricted. Retailers themselves will be responsible for reasonably verifying that customers appear to be over 21 by form of government ID.

The CCC will control licensure of marijuana businesses. Background checks will be conducted on retail marijuana license applicants. A marijuana retailer can anticipate that the yearly licensing fee may be up to $15,000. Retailers should apply early, as licensing can take up to 90 days. Licenses are generally good for one year. Some of the funds will be directed to those negatively impacted by drug use. Notably, under the new amendment, taxes on purchases have increased significantly to a total of 20 percent, including a 3 percent "local option" tax. Even with the recent legislation, retailers can expect to begin operations as permitted under law next year.

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