On June 4, the Massachusetts House of Representatives unanimously passed a cannabis bill that would enable a single business to own up to six dispensaries, effectively doubling the current limit. This legislative change aims to provide larger cannabis companies with the ability to acquire struggling dispensaries, yet it has sparked considerable debate within the industry.
In 2017, Massachusetts set a cap of three retail cannabis stores per business to prevent large, multi-state operators from monopolizing the market. This cap was intended to foster competition and support smaller, locally-owned cannabis businesses. The new bill, however, proposes to increase this limit, allowing cannabis operators to acquire an additional license each year until they reach the new cap. Additionally, it raises the maximum equity stake a single entity can hold in multiple cannabis businesses from 10% to 35% before it counts towards the dispensary cap.
Proponents argue that raising the cap could offer a lifeline to struggling cannabis businesses, allowing them to secure investment from larger firms. Ryan Dominguez, head of the Massachusetts Cannabis Coalition, noted, “We’re trying to give business owners different options on how they want to deal with their businesses,” suggesting that increased investment could stabilize failing operations.
However, many industry stakeholders have voiced strong opposition to the proposed changes. Nearly 60 business leaders and advocates signed a letter urging lawmakers to maintain the three-store cap, emphasizing that such limits are essential for ensuring a diverse and equitable cannabis market. Kevin Gilnack, deputy director of the advocacy group Equitable Opportunities Now, stated, “It’s going to create catastrophic market conditions for independent small businesses who don’t want to give up ownership control to multi-state operators.”
Commissioners of the Cannabis Control Commission, including Kimberly Roy, expressed concerns that raising the cap could lead to consolidation and reduce opportunities for social equity businesses. Roy referenced feedback from equity licensees who fear that larger companies could dominate the market, creating a scenario reminiscent of the “Walmart effect,” where a few large operators dominate the landscape, pushing out smaller businesses.
Supporters of the bill contend that it represents a compromise, especially since earlier proposals sought to increase the cap to nine or more dispensaries. Dominguez highlighted that local firms could potentially merge to form midsized companies, creating a more competitive landscape.
Gyasi Sellers, who operates Treevit, a cannabis delivery service under a social equity license, supports the change. He is currently in significant debt and believes that investment from larger businesses could be essential for his survival. “My entire livelihood depends on this change. Anything is better than closing the doors,” Sellers said.
Conversely, members of the Massachusetts Cannabis Equity Council, which consists of 18 social equity license holders, have raised alarms about the potential negative impact of lifting the ownership cap. Kobie Evans, co-owner of Pure Oasis, the first recreational dispensary in Boston, expressed that increasing the cap contradicts the goal of leveling the playing field for social equity applicants.
The House bill also proposes to increase purchasing and possession limits for cannabis, restructure the Cannabis Control Commission, regulate hemp-derived intoxicating products, and relax existing requirements for medical marijuana businesses. Despite these changes, the Senate has yet to show urgency in addressing the bill.
Nike John, owner of The Heritage Club dispensary and an early licensee under the social equity program, criticized the lack of consultation with equity operators during this process. “It seems like they’re doing this without consulting equity operators. We’ve reached out but haven’t been able to meet with anybody,” she said, highlighting the need for more inclusive dialogue in the legislative process.
As the debate continues, the Massachusetts cannabis industry remains divided over the proposed changes, with advocates for both sides presenting compelling arguments about the future of dispensary ownership in the state.
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