Sea Hunter, along with a large rival called Acreage Holdings, is using complex corporate structures to acquire or manage store licenses from the Berkshires to Cape Cod, commanding high-interest loans and strict management contracts as they become quiet titans of Massachusetts marijuana.
Their aggressive growth plans are not just pushing the limits built into the state law, but may be busting them entirely. Their early moves also threaten the state’s promise to not just legalize recreational marijuana but to make the marketplace for the drug a fair one in which diversity of ownership is prized and small players have a chance.
Massachusetts, in short, had hoped to get legalization right. But out of the gate, that dream faces an existential threat, the Spotlight Team has found.
Of the 12 recreational shops that have opened so far here, all but two are owned by or have ties to large, out-of-state investors or multistate operators. Meanwhile, out of more than 120 applicants approved for a state program aimed at helping startups from minority and disadvantaged communities, not one has opened yet, largely due to a lack of funding.
The chairman of the state board in charge of regulating the marijuana industry says he’s not aware of any license-limit violations at this time.
“You can’t control more than three licenses, whether it’s direct or indirect, through subsidiaries or holding companies or shadow companies,” said Steven Hoffman in an interview at the Cannabis Control Commission offices this week.
Hoffman, a former partner at Bain & Co., said he also wasn’t aware of companies openly bragging to investors about controlling up to four times the number of licenses legally allowed here.
“If somebody says they’re controlling 12 licenses in Massachusetts, that’s really a stupid thing to say in a public document,” he said, “because they’re not going to be able to go forward.”