Following several rounds of revisions and public comment solicitations since July 2020, the Massachusetts Cannabis Control Commission (CCC) on November 30 gave final approval to revise the 935 CMR 500 adult-use regulations. A key feature of the new regulations is significant amendments to existing rules governing the Delivery-Only and Microbusiness Delivery Endorsement license types. The CCC published its final regulations in late December and they will take effect in early January 2021.
In addition to changing the “Delivery-Only” license to a “Delivery Courier” license, which will automatically convert all existing pre-certified Delivery-Only applicants to Delivery Courier applicants, the new regulations have created a third type of delivery license: the “Delivery Operator” license. This new license allows approved licensees to procure and warehouse “finished marijuana products” from licensed product manufacturers, cultivators, microbusinesses, or craft marijuana cooperatives, and then both sell and deliver such products directly to consumers without the need for a retail storefront. Delivery Operator licensees may “white label” products (i.e., place their own branding on finished products packaged and sold to the Delivery Operator licensee by other licensed providers).
Additionally, all Delivery licensees will now be permitted to sell marijuana accessories, marijuana establishment-branded goods, and non-edible items directly to consumers.
The new regulations have increased the economic empowerment and social equity applicants’ exclusivity period for Delivery Courier, Delivery Endorsements, and Delivery Operator licenses from two to three years (beginning on the date the first Delivery Courier licensee receives a notice to commence operations).
Finally, and importantly, the CCC has clarified licensees may hold up to three retail licenses and up to a combined total of two Delivery Courier and/or Delivery Operator licenses.
While many of the changes seem to have moved in the direction of creating more opportunities in the delivery space, groups representing cannabis retailers have stated they are likely to bring legal challenges. Of particular concern is the ability for Delivery Operator licensees to warehouse and sell product without obtaining a retail license.
Robert J. Munnelly, Jr. is a regulatory lawyer at the Boston law firm Davis Malm. He has extensive experience dealing with legal issues faced by clients in highly regulated industries such as electricity, communications, natural gas and water. His experience in these areas led him to representing existing businesses and those seeking to do business in the emerging Massachusetts cannabis market.