After being shuttered during the COVID-19 pandemic, Massachusetts Gov. Charlie Baker announced recreational marijuana stores can reopen on May 25 for curbside delivery only as part of a comprehensive statewide reopening plan unveiled Monday.
Massachusetts is the only state with legal marijuana that ordered adult-use stores to close during the pandemic. Shops have been shut down since March 24, when Baker issued an order requiring businesses considered non-essential to cease operations in an effort to slow the spread of COVID-19, the disease caused by the new coronavirus.
Even though they’ll be able to sell marijuana again, the financial losses are significant for the state’s small cannabis companies. Many of the state’s marijuana businesses have laid off or furloughed workers during the pandemic.
Baker said in March that he believed recreational stores staying open would attract customers from outside of Massachusetts to drive in and purchase marijuana. Though stores were already implementing social distancing and other health and safety measures, and though some argued that the majority of customers come from within miles of the store, Baker did not budge.
While the reopening of stores will bring a sigh of relief, marijuana businesses have struggled during the pandemic like just about every other industry. But, unlike many other industries, cannabis businesses are not eligible for federal relief through the Paycheck Protection Program because marijuana remains illegal on the federal level.
Through the pandemic, Cannabis Control Commission Chairman Steven Hoffman has said the recreational market could be operated safely, pointing to the continued operation of the medical market as an example.
Earlier this month, a group of cannabis industry representatives met with the 17-member advisory board appointed by Baker to compile a report on reopening the state and pitched the safe reopening of the recreational market. Representatives at the meeting were the Commonwealth Dispensary Association, Joseph Lusardi, the CEO of Curaleaf, Amanda Rositano, the president of NETA, Jay Youmans, a principal at Smith, Costello & Crawford and Kobie Evans, a co-founder of Pure Oasis in Boston, the first economic empowerment applicant to open in the state.
Unlike recreational businesses, medical marijuana dispensaries were considered essential by Baker and have been open. The state Cannabis Control Commission has allowed medical marijuana businesses to offer curbside pickup to patients and has said patient renewal certifications can be submitted after a phone consultation.
With the closure of adult-use businesses came a spike in the number of medical marijuana patients.
There were 72,502 certified, active patients in April, reported Cannabis Control Commission Executive Director Shawn Collins during the commission’s monthly meeting on May 7. That number of certified, active patients is up from 63,720 in March, which is roughly a 14% increase. The increase indicated what many had already believed: that many people who use marijuana as medication were relying on the recreational market and had not previously registered with the state’s medical program.
The CCC in April allowed the recreational market to support the medical market with wholesale transfers, addressing concerns about the medical supply chain considering all the new patients.
An attempt to reopen recreational stores earlier in the pandemic was unsuccessful. A group of recreational pot shops and an advocate launched a lawsuit against the governor in an effort to be considered essential business during the pandemic, arguing that Baker allowing medical marijuana centers and liquor stores to operate, but not adult-use businesses, was unconstitutional.
A Massachusetts judge did not reverse Baker’s order, but did say he saw a clear path to how recreational stores could open with safety in mind.
The full impact of the recreational closure remains to be seen. The state and municipalities are going to see a significant decrease in tax collections from nearly two months without recreational sales. Recreational marijuana is subject to sales tax at 6.25%, excise tax at 10.75% at the state level, and up to 3% tax at the local level. The local level tax is distributed to towns and cities that are home to recreational marijuana stores. Marijuana purchased by medical patients is not subject to tax.
With thousands more medical patients than before the pandemic who may not return to the taxed recreational market, the state could see a drop in tax collections even as sales ramp back up.
And then there’s the effect on businesses. Some industry representatives have feared financial losses during the pandemic could mean some stores will not survive.