“We need to make sure this is a fair process for everybody going forward, said Commissioner Britte McBride. “That means we need to create a standard. We can’t be treating one entity different than another entity.”
Sira Naturals is the first applicant to come before the commission for a change of ownership of this scale and type, although commissioners said there are more in the queue. (Three former change of ownership applications that were considered related to individual changes to executives or board members, rather than a company acquisition.)
Sira Naturals runs three medical marijuana dispensaries, in Cambridge, Somerville and Needham. It has secured licenses to cultivate, manufacture and transport marijuana for the recreational market.
Cannabis Strategies Acquisition Corp., a publicly traded company in Canada, announced in October that it had an agreement to buy Sira Naturals along with three Nevada-based marijuana companies and one company that operates in Nevada and Colorado.
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The Boston Globe recently ran a series of stories about marijuana companies that try to skirt limits on how many licenses a single company can hold in Massachusetts by entering management or investment agreements with the companies that run the dispensaries.
Commissioners indicated that they are taking these reports seriously.
Patrick Beyea, director of investigations at the Cannabis Control Commission, said he reviewed 100 publicly available documents filed with Canadian regulators and interviewed key people at both companies. He said he was assured that CSAC understood Massachusetts’ three-store cap and limit on total cultivation size and would abide by those rules. He was also told there were no investor contracts or management agreements.
Commissioner Shaleen Title said she was not comfortable voting to approve the purchase until she saw more documents, including those that are not publicly available.
“It’s in the public’s interest to scrutinize these transactions,” Title said.
Commissioners voted to request all documents relevant to ownership, control and cap limitations.
The commission’s next scheduled meeting is May 30, but they could schedule another meeting before then to approve the acquisition.
“In decision-making, we should be cognizant some of these deals have timelines, and we will be causing an economic impact if we don’t approve or disapprove within a certain timeline,” said Chairman Steven Hoffman.
Commissioners are also considering hiring a third party to help scrutinize the complex deals between marijuana companies and ensure they comply with state law.
Executive Director Shawn Collins said an outside person would not do a more diligent job than internal staff, but could match that performance, while increasing the commission’s bandwidth and giving state regulators the ability to act faster in evaluating transactions.