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Massachusetts eyes end of medical marijuana vertical integration

Regulators in Massachusetts are considering eliminating the vertical-integration requirement for medical cannabis operators, a move that would open up the industry to stand-alone operations that would cost less to launch.

Dispensaries in the state currently are required to cultivate and process most of the medical marijuana they sell, but they can buy limited amounts from other operations.

There were 60 vertical MMJ licenses in Massachusetts as of the second quarter of 2020.

The Massachusetts Cannabis Control Commission (CCC) discussed the potential for lifting the requirement during an online meeting Monday and said they would seek public comment before deciding, the Boston Business Journal reported.

It’s unclear whether the commission could take action or whether lawmakers would need to.

“Right now, the law says there has to be vertical integration,” CCC Chair Steven Hoffman said, according to the Business Journal.

“There’s a question about whether we can, within that, allow people to only do one or two, rather than all three of the operations. The answer to that is unclear, and we’re going to solicit public comment and we’re going to have a debate.”

The commissioners indicated they would like to keep the per-company cap at three licenses each for cultivation, processing and retail.

Public comment on the draft regulations will be taken until Aug. 14. The commission is scheduled to vote on the final regulations in September.

Additionally, the commission is considering tougher regulations on businesses that fail testing for pesticide or heavy metals.

The new Marijuana Business Factbook projects that Massachusetts MMJ sales will reach $220 million-$265 million this year, up from $165 million-$205 million in 2019.