Advocates Say Dormant Medical Dispensaries Shouldn't Get First Shot At Recreational Licenses

On Monday, people who have long awaited the opportunity to get a piece of the recreational marijuana market in Massachusetts will get their chance.

The first applicants will be allowed to go after licenses to grow, sell or transport recreational cannabis — but only select groups are welcome to apply.

And, questions are already being raised about whether the application process is fair — or even lawful.

At issue are the 101 dispensaries that received what's called a "provisional certificate of registration" from the Department of Public Health to start medical retail sales, but never got up and running. Think of them as dormant dispensaries.

Those provisional license holders are among those allowed in the first round, or "priority" phase, along with other groups, including the state's 22 medical dispensaries currently serving patients.

Advocates for medical patients, like the Massachusetts Patient Advocacy Alliance, say that's not right. They say the money spent by non-operating dispensaries is a buyout to forget their obligations to medical patients.

"We're worried about this creating a loophole for [dispensaries] to disavow themselves of medical applicants, and just pursue adult licensing," says Michael Latulippe, development director of the Mass. Patient Advocacy Alliance and registered qualifying patient advisor to the Cannabis Control Commission. "They're getting priority even though they never were operational to dispense to qualifying patients. And they never had to be."

The group is also warning that lawsuits could grind the licensure process to a halt for all if these dormant dispensaries get approval to open up shop in the recreational market.

They point to the law: It says the Cannabis Control Commission — the panel charged with creating the regulations for the nascent industry — prioritize applications not for all registered marijuana dispensaries (RMDs), but only the ones "that are operational and dispensing to qualifying patients."

For its part, the Cannabis Control Commissions says it intentionally included non-operating RMDs with the ones serving patients.

Cedric Sinclair, spokesman for the commission, says the logic behind this is that both groups "have previously demonstrated the resources to safely operate a marijuana establishment."

Sinclair acknowledged that questions arose due to language in the statute that referred to a need for applicants to be "operational and dispensing." But, he says, the commission addressed this matter, making it clear that provisional RMDs would be included in the first round.

Legislation filed earlier this month by Gov. Charlie Baker would remove the "operational and dispensing" part of the law's language. That bill is still in a House committee.

Sinclair added that the CCC has been thoughtful to protect medical marijuana supplies as retail gets up and running, including setting aside 35 percent of product for medical patients.

Not everyone thinks unopened RMDs should be held in a different class than those up and running. Jim Borghesani is with the Marijuana Policy Project, and is the former spokesman for Yes on 4, the group that wrote the referendum approved by voters in 2016. Even if those RMDs never opened their doors, he says they still spent a lot of money to secure that provisional license and deserve to get a first shot at a recreational one.

The medical marijuana licensing fee from the Department of Public Health alone costs $80,000 — and that doesn't count lawyer or lobbying fees.

"We think it’s fitting that businesses that have worked for years and spent great deals of money to get established and get provisional licenses have the ability to go in first round," Borghesani says.

Others say it seems like a case of putting money ahead of people the law is supposed to serve.

Maggie Kinsella is with MassCann, the state affiliate of NORML — the National Organization for the Reform of the Marijuana Laws. She says the groups with money — the RMDs that were able to secure licenses and sit on them — shouldn't be competing with the open RMDs or the so-called "economic empowerment applicants." Those in the latter group who qualify include individuals living in areas affected by marijuana prohibition, minorities and those with marijuana convictions.

"This is very discouraging to see because we've worked really hard to get a level playing field," Kinsella says.

While some see groups in the first round as competing against one another, commissioners say they have installed processes to safeguard against disadvantages to "economic empowerment applicants." They say they will alternate between decisions on economic empowerment applicants, and the dispensary applications that are likely to have greater financial resources.

Applications will be looked at in a first come, first serve manner, with no limit on the number of retailers that gain approval. The process opens up to more entities starting April 15, with anyone eligible to apply on June 1.

This story has been updated to add information about the bill filed by Baker.

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