Updated Dec. 19, 2019
Wednesday marks exactly one year since the first two recreational marijuana dispensaries opened in Massachusetts — Cultivate in Leicester and New England Treatment Access (NETA) in Northampton.
Since then, dozens have popped up across the state, with hundreds more in the pipeline.
The state's legal marijuana industry is far from being as expansive as that of Denver or Portland, but a look at the total number of applications for recreational marijuana licenses submitted in the first year shows it's growing at a consistent rate. This growth comes despite some bumps in the road, including a federal grand jury currently investigating host community agreements in more than half a dozen Massachusetts cities and towns.
Each month, the Cannabis Control Commission (CCC) releases data that includes the status of every license application submitted to the agency since it started accepting adult-use proposals. All of these numbers have been calculated using the most recent data set from Nov. 7, and from the application summary presented to the CCC at their Nov. 7 meeting. It should be noted that some of the totals do not include the provisional and final license applications approved at the Nov. 7 meeting.
608 submitted license applications that are waiting for review, or have been reviewed and approved
To date, 231 applications have been considered by the CCC, and 77 of those applications have been given the go-ahead to commence operations. These include 32 dispensaries and 21 cultivation facilities. The CCC has also dealt out 21 final licenses and 129 provisional licenses. Four were denied.
The remaining 377 applications are either in the queue to be or are currently being reviewed by CCC staff.
An application can only land in front of the Commission for approval after the application itself is first deemed complete by CCC staff. Then, the full Commission has 90 days to take it up and grant it a provisional license. With a provisional license, business operators can start building or renovating the land or spaces in their host communities. Next, after construction is complete and the space has been inspected by the CCC, the Commission will consider the application for a full license. If a full license is issued, another inspection is completed and then — if deemed up to code — the business is allowed to commence operations.
David Rabinovitz, a business consultant in the state’s recreational marijuana industry, said he thinks part of the problem with the backlog of applications in the queue is a staffing shortage at the CCC.
“They need more people who can review the applications,” said Rabinovitz, who is also part of a group applying for a retail marijuana license. “I think that's impacted, likely, by money — what they have in their budget. And I suspect that's impacted by the slow roll out of the program. So, to a degree, I think it's sort of a vicious circle.”
Rabinovitz said the review of the application's completion is a lengthy process, and includes each applicant undergoing a background check and an inspection as to whether the application meets its municipality's bylaws. Once the application is pre-approved and deemed complete, then that 90-day countdown starts.
This means an application could sit for months — either under review or waiting to be reviewed — after being submitted. Rabinovitz said applicants are still paying rent on the properties for their proposed businesses during that time, even as their license applications are pending, which can eat away at an applicant’s capital.
David O’Brien, president and CEO of the Massachusetts Cannabis Business Association, agrees that staffing is part of the lag in the application process. He said the entire process — from starting to negotiate with a host community to final approval — can take upwards of a year. But, he said, these delays aren’t permanent.
"My suspicion is you'll see the number of retail [dispensaries] double probably [during] the next three to six months, and then it'll probably double again. That’s based on what's in the pipeline," O’Brien said. "So we'll have 100 retail establishments open, I'd say before long, probably by fall or winter of next year."
Recently, the CCC approved a new policy where certain applications in the remaining pool of applicants will be expedited. These applications include those for Independent Testing Labs, but also for applications for social equity program participants, outdoor cultivators, micro businesses, minority-owned, veteran-owned and women-owned businesses.
3,510 incomplete but open license applications
These are applications that have been started online in the CCC’s application portal. The CCC writes on its website that it encourages businesses to open an application so it can gather and upload all the required information on a rolling basis, since it does take a while to complete a license application.
David Rabinovitz said the way most cities and towns are developing host community agreements is a big reason why the application process can take months to finish.
In nearly all Massachusetts communities, prospective marijuana businesses are required to secure a location for their marijuana business before a town or city will negotiate a host community agreement with them. A host community agreement is a contract between a business and a community that dictates the terms for opening and operating a marijuana establishment in town, and contains everything from security plans to hours of operations for the facilities. It is executed, typically alongside local permitting from that community, before a business can submit an application to the CCC.
“Every landlord that has a piece of real estate that looks like it would be a good location for retail [dispensary] is going to have multiple suitors,” said Rabinovitz. “I saw a case where the landlord said that [the] property has no water, no sewer, no electricity. The foundation was broken and he expects that a cannabis operator who comes in is going to have to drop $100,000 to fix his building. And he wants premium rent rates on top of [that]. And when you have multiple parties bidding for the real estate, the price goes up and the terms go nuts.”
Read more: Mass. Marijuana Businesses Want Changes To Host Community Agreements
147 applications submitted in Worcester County
Worcester County has the most license applications of any county in Massachusetts. Of the 77 statewide applications allowed to commence operations, nearly a third of them are in Worcester County. From there, the total number of applications per county drastically drops. Berkshire County has the second-highest number of total applications — submitted and approved — with 59. This is followed by Middlesex County in third place with 58 applications, and Plymouth County in fourth place with 55 applications.
David O’Brien, president and CEO of the Massachusetts Cannabis Business Association, said land is cheaper as you move toward the western half of the state. This could be important for a general applicant who does not have a lot of saved money in the bank, especially when the application process could take between a year and 18 months to complete.
Read more: Weed Is Flying Off The Shelves In Mass. But Compared To Other States, We're Lagging
“I think probably because it's not downtown Boston, for example, the real estate's cheaper out in Worcester County," O’Brien said. “And when you go further west out into the Berkshires and Hampden, Hampshire, Franklin and Berkshire County are [also] probably even cheaper real estate because there's more of it.”
24 retail marijuana license applications in both Worcester and Holyoke
Worcester and Holyoke are tied for the most license applications of any municipality, submitted or approved, in the entire state, with 24 each. Behind them is Fitchburg, with 23 applications; Pittsfield with 22; Northampton with 18; and Uxbridge with 15. Worcester, Fitchburg and Uxbridge are also all in Worcester County.
Blake Mensing, a regulatory lawyer specializing in the legal marijuana industry in Massachusetts, represents businesses as they go through the licensing process, from host community agreement to hearings in front of the CCC.
Mensing found that communities west of I-495 are generally more accepting of cannabis, with some wholeheartedly embracing the industry.
“Community impact fee dollars and retail excise tax dollars [taxes collected from marijuana sales] can solve real problems, especially when you have municipalities that have lost an industry or seeking to bring more jobs to town,” Mensing said.
Read more: Boston Moves Forward With Second Pot Dispensary For An Empowerment Applicant
Mensing said cheaper rent in the western half of the state is definitely a draw for prospective businesses. But, he said a community that embraces the industry is even more attractive.
“Those towns that want this kind of industry in town make it easier for applicants,” Mensing said. “So, having a simple step-by-step process to figure out how to get a host community agreement or even a complex one, as long as it’s in writing, that helps applicants know what they have to present in order to be deemed worthy of receiving a host community agreement.”
56 medical marijuana businesses approved for recreational marijuana licenses
These 56 medical marijuana businesses' approvals include provisional and final licenses for recreational marijuana, as well as orders to commence operations. Of these 56 businesses, two are independent testing labs that test medical marijuana products and have now been approved to also test recreational products.
This does not include license applications that have been submitted but have not been reviewed by CCC staff. Forty-one other businesses have applied and been approved for provisional, final and commence recreational marijuana licenses, bring the total to 97.
Businesses can apply for a recreational license as a general or priority candidate, including a medical marijuana priority candidate. State law requires that the CCC prioritize reviewing and approving recreational licenses for Registered Marijuana Dispensaries (RMDs) with final or provisional medical marijuana licenses.
According to David O’Brien with the Massachusetts Cannabis Business Association, the system is somewhat designed to make it easier for medical marijuana applicants to expand their businesses.
In Massachusetts, vertical integration is required by law to operate a medical marijuana license. This means that when medical marijuana businesses applied for licenses, they were required to build all aspects of production, from the dispensary to cultivation to product manufacturing. You couldn’t simply build and own just a medical marijuana dispensary.
Now, as medical marijuana companies are applying for recreational licenses, it’s financially easier for them to expand their current operations to include a recreational component because all other aspects of their business already exist.
“Those that spent money in the early days on medical to get them up and open, have a bit of an advantage in that if they are open for medical on a given site, no municipality can stop them technically from co-locating and opening up a retail [space] provided they go through the local and state process,” O’Brien said.
WGBH News reached out to the Cannabis Control Commission for comment and they have declined to publicly do so.
Correction: A previous version of this story incorrectly stated that 157 marijuana license applications were submitted in Worcester County. There were in fact 147 license applications. Likewise, the article incorrectly stated which counties ranked second, third and fourth for the most license applications in the state. Previously, the article stated Middlesex County was in second place, and Bristol and Plymouth Counties were tied for third and fourth place. Berkshire County, not Middlesex County, has the second-highest number of total applications with 59. Following Berkshire, in third place is Middlesex County with 58 applications. In fourth place is Plymouth County with 55 applications. Additionally, a previous version of this story stated that Pittsfield was in Worcester County. It is, in fact, in Berkshire County.
