The Boston Strangler – How Landlords Control Massachusetts Marijuana Licensing Now
What looked good on paper has turned into a nightmare for cannabis businesses
The road to hell is paved with good intentions, and the Pubic Policy college degree was created to find the potholes and fix them.
I should know, I have a Public Policy degree from the University of Chicago.
The Massachusetts Cannabis Control Commission had the greatest of intentions when they designed their marijuana business licensing applications and procedures, but it has turned into a nightmare for all applicants, especially social empowerment (SE) candidates and economic empowerment candidates (EE).
David Rabinovitz outlines the problem very well on the latest episode of In the Weeds. Landlords, due to a poorly designed system, now control who and who doesn’t get a license for a cannabis dispensary in Massachusetts.
Click the video below to listen to David explain what the problem is right now.
Let me explain. The way the current Massachusetts licensing program works is that applicants must get their team together, get their funding, have an agreement in place with a landlord in a host community, and then submit their application for a dispensary license to the Cannabis Control Commission. As David points out in this 15-minute interview, the problem now is that only a few landlords will work with cannabis companies in communities that have approved marijuana businesses. Hence, demand for a single physical location is through the roof. When demand outstrips supply, prices can go way, way up in a bubble formation. The landlord is now in a nodal position. In public policy terms, that means he or she has way more power and authority then they look like on paper or compared to their compensation position. A common example in public policy class is the CEO’s private secretary. He or she makes X on paper and is listed as a secretary, but in reality, that person knows a ton of private information, can decide who gets to see the CEO and who does not.
In Massachusetts, the intent of the Cannabis Control Commission was good, but the design was wrong. Right now, landlords have 5 to 6 groups bidding one on location because no one can get a license without a landlord’s agreement in hand. This is causing rents to skyrocket, leaving SE and EE applicants out in the cold. Major cannabis can outbid and agree to all sorts of landlords demands because they have the time, money, and lawyers to do it.
Again, watch this 15-minute clip on YouTube as David lays out the problem, or bottleneck to getting more dispensaries, and SE and EE applicants, in the cannabis system.
The good news is that there is a simple fix and it is what should have been designed into the plan on day number one. Make the process go something like this:
- Get your team together
- Get your funding finalized and secured
- Pick out your host community and submit your application
If the team and funding partners are approved they get a provisional license, you now have 120 days to find a location that will accommodate your dispensary or cannabis business. You come back 120 days from when the provisional license was issued with either a landlord letter or lease for a location. If the landlord is local, he or she could come to the final license approval meeting.
That removes the landlord being able to pick and choose big cannabis companies with deep pockets over local applicants or SE and EE applicant who just don’t’ have funds or knowledge base yet to compete. If you put the landlord after the provisional license, then applicants can shop locations and landlords have to take a tenant just like any other business model, as if a pizza shop or flower shop wanted to open in the same location in the building.
I hope to see the Cannabis Control Commission fix this very fixable problem at a future meeting because the little guy has no chance is landlords control the game.