BROCKTON — The advent of legalized marijuana delivery services in Massachusetts offers the ultimate convenience for pot smokers, and a new license allowing for delivery straight from wholesale warehouses is seen by regulators as an avenue to further social equity in cannabis business licensing, allowing those with limited resources to set up shop without the more costly overhead of a brick and mortar retail store.
In some cases, those deliveries could arrive from warehouses far outside of the city, which would be unable to collect any tax revenue on the transaction. And there’s a fear that this model could lead to an Amazon-like corporate takeover of the state’s budding marijuana industry.
So, what does that mean for cities and towns that have already worked diligently to set up licensing, zoning and host community agreements to mitigate the impact of legalized marijuana sales on traffic and public safety? And what will it mean for those retail marijuana business license holders who have been building up their proposed pot shops, only to be undercut by delivery services coming from distant wholesale facilities?
Brockton Councilor-at-large Winthrop Farwell is asking those questions in an order he filed for next Tuesday night’s city council meeting, calling on the state to hit the brakes on proposed regulations for marijuana delivery services under consideration by the state’s Cannabis Control Commission. The commission recently adopted revisions to draft regulations creating a new class of warehouse-to-front-door delivery licenses, which it calls a “wholesale delivery license,” on top of existing plans for a more limited delivery license for couriers that would deliver products from existing retail pot shops and dispensaries. The commission is now collecting public comment on recent changes to the proposed regulations — collecting them by email at email@example.com — ending on Oct. 15.
“If these regulations go through, we’re going to be helpless,” Farwell said. “The problem with these delivery regulations is that it would allow a warehouse in Amesbury or Spencer, Mass., to do retail delivery to people in Brockton. And we would get none of the revenue from these deliveries. We purposely did not get into home delivery in Brockton because we wanted our own manufacturers and retailers to get up and running, and wanted to find out the impact on the city in terms of municipal services. It’s a public safety issue. We already have pizza and Chinese food delivery people who are held up.”
The cannabis commission is expected to consider feedback and vote on finalized delivery regulations on Oct. 20. For the first three years, the delivery licenses are being made available exclusively to participants in the Cannabis Control Commission’s social equity and economic empowerment programs, which were established to provide a pathway and assistance for minority-owned businesses and others from places disproportionately impacted by laws against marijuana.
Farwell’s city council order would authorize the city solicitor to make a request to the Cannabis Control Commission to delay the implementation of home delivery regulations by six months, in order to allow the city to study the impact of home delivery by outside vendors, including how it could impact public safety services, city tax revenue and the five companies that recently received licenses to open retail marijuana stores in Brockton, on top of the existing In Good Health dispensary operating on West Chestnut Street.
The Enterprise reached out by email on Wednesday to the Cannabis Control Commission seeking comment for this story but did not receive a reply by deadline.
The state’s proposed marijuana delivery regulations would allow for sales of marijuana in communities that voted against allowing marijuana retail businesses from opening there, Farwell said. That includes East Bridgewater, Easton and Whitman, which voted to ban retail marijuana shops during a 2018 special election.
Lisa Green, assistant town administrator for Whitman and soon-to-be interim town administrator, said it seems like the town would be powerless to stop marijuana deliveries from warehouses and retailers coming from outside.
“It would be a concern,” Green said. “The town would have no authority, just as we don’t have any authority to stop people from Amazon making deliveries. Voters of Whitman have determined they’re not interested in having marijuana sold retail in the town. That’s not going to trump state law.”
Another group that is concerned is the Massachusetts Municipal Lawyers Association, representing city solicitors across the state, which recently sent a letter to the Cannabis Control Commission, warning of cities and towns being undermined in their oversight and shorted tax revenue, while having to deal with the impacts of delivery businesses headquartered in other communities. The group also warned of powerful, deep-pocketed Amazon-like delivery services supplanting local retail business stakeholders.
“The fear is ultimately, though now limited to social equity and economic empowerment applicants, these delivery entities will be taken over by a large Amazon type venture and retailers will be put out of business,” wrote Ellen Callahan Doucette, president of the MMLA. “Based on private projections of the delivery market, the technological advancements of online ordering and delivery software, already existing financial barriers and the ability to scale a delivery model business, there exists a potential for a lack of the desired outcome of these regulatory changes.”
When it presented the new regulations last month, Massachusetts Cannabis Control Commissioner Britte McBride said the limitation of three wholesale delivery licenses and retail licenses to one single entity will allow the commission to prevent a small number of licensees from controlling or attempting to dominate the state’s regulated marijuana market.
“This is a first in the nation endeavor in terms of setting it up this way,” McBridge said during the Sept. 24 commission meeting. “I’m sure there will be a lot of ideas shared with us throughout the next few weeks.”