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A Guide to Marijuana Laws in Massachusetts

Curious about marijuana regulations in the State of Massachusetts and what they mean for your cannabis portfolio? You’ve come to the right place! In this article, 420 Investor Daily offers investors a detailed overview of the status of medical and recreational cannabis legalization in Massachusetts.

We break down the timelines behind the current policy, the permissions and limitations for both medical and recreational cannabis, and what investors should expect next in the state. We also take a look at the major cannabis companies and how their projects tie in with cannabis policy in Massachusetts.

Cannabis laws in Massachusetts: A timeline

The State of Massachusetts legalized medical marijuana by a citizen-initiated ballot measure in 2012. According to BALLOTPEDIA, The Massachusetts Medical Marijuana Initiative was the third question on the November 6, 2012, ballot. The law became effective on January 1, 2013.

Later, on December 28, 2016, the state also legalized recreational marijuana through another citizen-initiated ballot measure. According to BALLOTPEDIA, Massachusetts Legalization, Regulation, and Taxation of Marijuana Initiative was the fourth question on November 8, 2016, ballot. Initially, the date for licensing cannabis shops in the state was January 1, 2018. But legislators delayed the date to July 1, 2018.

Medical marijuana in Massachusetts: A primer

The Massachusetts Medical Marijuana Initiative has decriminalized possession of a certain amount of medicinal cannabis. The amount is limited to 60-day or 10-ounce supply of usable cannabis. This legal protection applies only to registered patients and their designated caregivers. Medical cannabis laws in Massachusetts, however, are a bit complicated. The following draft regulations come from the state document titled 935 CMR 501.000: MEDICAL USE OF MARIJUANA.

  • All qualifying patients need either a temporary or permanent registration card to access medical cannabis.
  • Formerly, the DPH or Department of Public Health was issuing these cards. But now, the Cannabis Control Commission is issuing them.
  • The patient first requires electronic or written certification from a certifying healthcare provider.
  • The temporary registration card provides access to a 14-day supply or 2.5 ounces of medical marijuana. The limit applies unless certifying healthcare provider specifies otherwise.
  • Patients receive an annual patient registration card after complying with requirements in 935 CMR 501.015(5). The patients also complete the electronic registration process as required by the Cannabis Control Commission.
  • The patient has to notify the Cannabis Control Commission after receiving an annual registration card.
  • A certifying healthcare provider provides written certification to a qualifying patient. This certification allows patients access to more than the allowed supply of medical marijuana.

Qualifications for Massachusetts’ Medical Marijuana Treatment Centers

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According to the state document titled 935 CMR 501.000: MEDICAL USE OF MARIJUANA, MTCs or Medical Marijuana Treatment Centers are “the site(s) of dispensing, cultivation, and preparation of Cannabis or Marijuana for medical use.” They’re also called RMDs or Registered Marijuana Dispensaries.

According to Mass.gov, there were 50 RMDs, 59,288 active patients, and 7,005 active caregivers in the state. Plus, there were 293 registered healthcare providers and 66,945 healthcare provider certifications as of May 31, 2019.

The following requirements are necessary for securing a license in Massachusetts.

  • Check out the application patients need to submit to the Cannabis Control Commission here.
  • Complete the three sections in the application. These include “Application of Intent,” “Background Check,” and “Management and Operations Profile.” You can find Massachusetts’ MTC or RMD license requirements here.

Health conditions qualifying for medical cannabis use in Massachusetts

A qualifying patient for medical cannabis in Massachusetts must have a diagnosis from a certifying healthcare provider of a debilitating medical condition. After making their diagnosis, the certifying healthcare provider submits a written certification to the Cannabis Control Commission.

According to the regulation 935 CMR 501.000: MEDICAL USE OF MARIJUANA, debilitating medical conditions include the following.

  • Cancer.
  • Glaucoma.
  • HIV.
  • AIDS (acquired immune deficiency syndrome).
  • Multiple sclerosis.
  • ALS (amyotrophic lateral sclerosis).
  • Crohn’s disease.
  • Parkinson’s disease.
  • MS (multiple sclerosis).
  • Other debilitating conditions determined by a certifying healthcare provider.

Recreational marijuana in Massachusetts: A primer

According to Chapter 55 of the Acts of 2017, there are five different types of licenses for businesses in Massachusetts’s recreational marijuana space. These types include retail, cultivator, manufacturer, craft marijuana cultivator cooperative, and independent testing laboratory licenses.

On November 20, the first two authorized recreational marijuana retail shops started operating in Massachusetts. Thee shops were Cultivate at Leicester and NETA (New England Treatment Access) at Northampton. Currently, there are 26 recreational marijuana dispensaries in the state. You can check them out here.

There are still some limitations on recreational marijuana in Massachusetts

Although recreational marijuana is legal in Massachusetts, the state restricts its use. Chapter 55 of the Acts of 2017 allows a person over 21 years of age to possess up to one ounce of marijuana for recreational use. However, the amount of marijuana concentrate can’t exceed five grams. Moreover, a person can possess up to 10 ounces of marijuana in their home. The law also restricts the cultivation of marijuana plants to six plants for every home, or 12 for two or more adults.

According to mass.gov, Chapter 55 of the Acts of 2017 doesn’t allow the use of marijuana on public or federal land. The law requires residents to keep cannabis under lock if the amount exceeds 1 ounce. Consumers must also not keep cannabis in an open container in the passenger area of a car. This restriction applies when a car is on the road and where the public can access marijuana. Moreover, similar to alcohol, it’s a crime to drive under the influence of marijuana in the state.

Assessing Massachusetts’s marijuana market opportunity

According to the Massachusetts Cannabis Control Commission, sales of recreational marijuana totaled $286 million in 2019 on a year-to-date basis. The total recreational sales since November 2018 stand at $302 million. Marijuana Business Factbook has estimated recreational marijuana sales in the state at $450 million–$500 million in 2019. According to Statista, Massachusetts is estimated to account for 5.4%, 6.3%, and 6.7% of the total US legal cannabis market in 2019, 2020, and 2021, respectively.

Massachusetts taxes recreational marijuana with a sales tax of 6.25% and an excise tax of 10.75%. Cities or towns also have the local option of charging an additional tax up to 3% on recreational marijuana sales. The Massachusetts Department of Revenue has estimated marijuana tax revenues at $93 million–$172 million for fiscal 2020. The fiscal year ranges from July 2019 to June 2020.

The major cannabis companies in Massachusetts

Compared to other states, Massachusetts has relatively few medical and recreational marijuana players. Regulatory delays in issuing licenses for recreational marijuana has affected sales forecasts for some marijuana producers.

But this limited license market also offers a significant growth opportunity for existing marijuana players. Let’s take a look at some of the prominent companies with a significant presence in Massachusetts.

Marimed is one of the prominent cannabis players in Massachusetts

Marimed (MRMD) is a vertically integrated, multi-state cannabis operator. It cultivates cannabis in Massachusetts and Nevada.

The company operates dispensaries only in the limited-license state of Massachusetts. Marimed has distribution operations in Massachusetts, Delaware, Illinois, Rhode Island, Maine, and Maryland.

Ayr Strategies is a leading wholesale player

Ayr Strategies (AYRSF) is emerging as a leader in Massachusetts’s wholesale marijuana market. According to its second-quarter earnings call, the company is one of the only three fully licensed recreational-only cannabis providers in the state.

In August 2019, the company reported wholesale revenues of $2.5 million. This total marks a year-over-year rise of 127.27% and a sequential rise of 23%.

The company anticipates further growth in the market associated with rising cannabis production and increasing market penetration. In September 2019, Ayr Strategies supplied cannabis to 16 out of 29 recreational dispensaries in Massachusetts.

Canopy Growth seems keen to leverage opportunities in Massachusetts

On April 18, Canopy Growth (CGC) announced plans to acquire Acreage Holdings (ACRGF) for a consideration of $3.4 billion. Federal US law prohibits the production and sale of cannabis. To overcome this problem, the companies structured their deal in a rather innovative way.

Canopy Growth has obtained an option to acquire all shares of Acreage Holdings. This option will be in-the-money upon changes in federal laws governing cannabis in the US. To learn more, see Canopy Growth’s US Ambition With Acreage Holdings.

According to its second-quarter earnings call, Acreage Holdings is currently in the final phases of completing its Massachusetts processing facility. The company also has three completed dispensaries in the state. These dispensaries are currently awaiting regulatory approval. Upon completion of the Canopy Growth–Acreage Holdings deal, the combined company will have a solid presence in this market.

Want to learn more about investing in the cannabis industry?

To get a detailed overview of the cannabis industry, check out Investing in the Cannabis Industry. Also, to learn about marijuana legalization in the US, see Marijuana Legalization: O’Rourke Blazes His 2020 Campaign.

For updates on the ongoing opioid crisis in the US and how it’s promoting cannabis legalization, see Opioid Crisis: Is Cannabis Legalization a Good Idea?  Finally, take a look at dedicated state-by-state overviews on cannabis regulation from 420 Investor Daily.

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