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How to Apply for a Massachusetts Cannabis License

Massachusetts Cannabis License

How to apply for a Massachusetts Cannabis License 

Applying for a Massachusetts Cannabis License is the first step any cannabis entrepreneur that resides in the bay state should take care of. Lawmakers passed recreational cannabis legislation in July of 2017.  

The Cannabis Control Commission (CCC) is responsible for promulgating regulations relating to marijuana, processing business applications and issuing licenses, and creating policies and procedures which “promote and encourage full participation in the regulated marijuana industry by people from communities that have previously been disproportionately harmed by marijuana prohibition and enforcement and to positively impact those communities.

Types of Massachusetts Cannabis Licenses

  • Marijuana Cultivation License. A Marijuana Cultivator may cultivate, process and package marijuana, to transfer and deliver marijuana products to marijuana establishments, but not to consumers. There are 11 tiers of Marijuana Cultivator Licenses depending on the size of the canopy the applicant would use:
Tier 1: up to 5,000 sq. ftTier 7: 50,001 to 60,000 sq. ft
Tier 2: 5,001 to 10,000 sq. ft.Tier 8: 60,001 to 70,000 sq. ft
Tier 3: 10,001 to 20,000 sq. ftTier 9: 70,001 to 80,000 sq. ft
Tier 4: 20,001 to 30,000 sq. ftTier 10: 80,001 to 90,000 sq. ft
Tier 5: 30,001 to 40,000 sq. ftTier 11: 90,001 to 100,000 sq. ft
Tier 6: 40,001 to 50,000 sq. ft 
  • Craft Marijuana Cooperative. A type of Marijuana Cultivator which may cultivate, obtain, manufacture, process, package and brand marijuana and marijuana products to deliver marijuana to Marijuana Establishments, but not to consumers. In order to apply for this type of license, you’d need to have a team that consists of:
      • Massachusetts residents who have formed a limited liability company, limited liability partnership, or a cooperative corporation; 
      • A business may only have one Craft Marijuana Cooperative license; 
      • Members of a Craft Marijuana Cooperative may not have a controlling interest in any other marijuana establishment;
      • A Craft Marijuana Cooperative is not limited to a particular number of cultivation locations, but is limited to a total canopy of 100,000 square feet and three locations for activities authorized for marijuana product manufacturers;
      • One member of the Craft Marijuana Cooperative must have filed a Schedule F tax form (reporting farm income) in the past five years.
      • The Craft Marijuana Cooperative must operate according to the seven cooperative principles published by the International Cooperative Alliance in 1995.
  • Marijuana Product Manufacturer. A Marijuana Product Manufacturer is an entity authorized to obtain, manufacture, process and package marijuana and marijuana products, to deliver marijuana and marijuana products to Marijuana Establishments and to transfer marijuana and marijuana products to other Marijuana Establishments, but not to consumers.
  • Marijuana Retailer. A Marijuana Retailer is an entity authorized to purchase and deliver marijuana and marijuana products from Marijuana Establishments and to sell or otherwise transfer marijuana and marijuana products to Marijuana Establishments and to consumers. 
  • Marijuana Transporter. A Marijuana Transporter is an entity that may only transport marijuana or marijuana products when such transportation is not already authorized under a Marijuana Establishment license if it is licensed as a Marijuana Transporter:
      • Third-Party Transporter: An entity registered to do business in Massachusetts that does not hold another Marijuana Establishment license pursuant to 935 CMR 500.050 and is not registered as a registered marijuana dispensary pursuant to 105 CMR 725.000. 
      • Existing Licensee Transporter: A Marijuana Establishment that wishes to contract with other marijuana establishments to transport their marijuana and marijuana products to other marijuana establishments.
  • Marijuana Research Facility. A Marijuana Research Facility is an academic institution, non-profit corporation or domestic corporation or entity authorized to do business in the Commonwealth of Massachusetts. A Marijuana Research Facility may cultivate, purchase or otherwise acquire marijuana for the purpose of conducting research regarding marijuana and marijuana products. Any research involving humans must be authorized by an Institutional Review Board. A Marijuana Research Facility may not sell marijuana it has cultivated. 
  • Marijuana Microbusiness. A Microbusiness is a co-located Tier 1 Marijuana Cultivator, and/or Marijuana Product Manufacturer limited to purchase 2,000 pounds of marijuana from other Marijuana Establishments in one year. 

A Microbusiness licensee shall not have an ownership stake in any other Marijuana Establishment and a majority of its executives or members must have been residents of Massachusetts for no less than 12 months prior to application is eligible to apply for a Microbusiness license.

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HOW TO GET A MASSACHUSETTS CANNABIS LICENSE

How to apply for a Massachusetts Cannabis License

The first step to applying for a Massachusetts Cannabis License is to submit the license application fee -which will vary depending on what type of license you’ll be applying to- and all three (3) sections of the application: 

  • Application of Intent, 
  • Background Check, and 
  • Management and Operations Profile. 

Each section requires applicants to provide accurate information about the business, individuals and entities associated with the business and to demonstrate understanding of, and plans to comply with, the Commission’s regulations that are specific to the applicant’s license type, location, and scale. The adult- and medical-use license applications have essentially the same requirements with differences highlighted in the following sections.

Application of Intent

The Application of Intent (AOI) requires the applicant to disclose Persons or Entities Having Direct or Indirect Control in their application for licensure. Persons or Entities Having Indirect Control means any person or entity having indirect control over operations of a ME or MTC. It specifically includes any person with a controlling interest in an indirect holding or parent company of the applicant, and the chief executive officer and executive director of those companies, or any person or entity in a position indirectly to control the decision-making of a Marijuana Establishment (ME) or a Marijuana Treatment Center (MTC).

Applicants are encouraged to include individuals that exert control through the contribution of services. For example, an individual may exert control by making decisions about the establishment management or operations. Applicants do not need to disclose individuals who provide services and do not exert control. For example, applicants do not need to disclose consultants who consult but do not make decisions for the establishment. 

In this phase, all applicants would have to disclose and submit the following:

  • In-State Interests
  • Out-of-State Interests
  • Capital Resources
  • Bond or Escrow
  • Property Identification and Interest Documentation
  • Host Community Agreement Certification
  • Community Outreach Meeting Attestation and Documentation
  • Plan to Remain Compliant with Local Ordinance
  • Plan to Positively Impact Disproportionately Harmed People
  • Application Fee

Background Check

In this phase of the Massachusetts Cannabis License Application, all applicants must list all relevant individuals and entities along with all background disclosures and authorization forms. Each individual or entity listed in the Applicant of Intent section shall also be listed in the Background Check section. Individuals and entities will undergo an in-depth background check and individuals will submit to fingerprinting checks. 

The Commission is required to make a determination of suitability for licensure for each individual and entity listed on an application, which is based, in part on the background checks. Background checks will include, but not be limited to, a review of the following:

  • Massachusetts’ and national criminal database records; 
  • Massachusetts’ and national civil database records, including professional and occupational records; 
  • The individual and entity’s involvement in other marijuana-related businesses; and
  • Any actions taken against any license or registration held by the individual or entity. 

Further, all applicants will be required to disclose the following information:

  • A description of any criminal action, whether felony or misdemeanor, that resulted in a conviction, guilty plea, plea of nolo contendere, or admission to sufficient facts; 
  • A description of any civil action, including actions related to a professional, occupational, or fraudulent practice; 
  • A description of any administrative action, including actions related to a medical- or adult-use marijuana operation; 
  • A description of any disciplinary action taken in any jurisdiction against a license, registration, or certification held by the individual or entity, such as a suspension or revocation, including, but not limited to, a license to prescribe or distribute controlled substances; and 
  • A description of any license denial.

Applicants are not required to provide information about any conviction that has been sealed or expunged by court order.

Management and Operations Profile 

The information required as part of this section is an indicator that the applicant understands the legal requirements to operate an ME, including the Commission’s regulations, has plans that are specific to the applicant’s license type, location and scale. and will be able to operate in a lawful manner.

In order to comply with this phase of the Massachusetts Cannabis License application, all applicants would need to provide the following:

  • Business Information, Articles of Organization, and Bylaws
  • Certificates of Good Standing
  • Business Plan, Liability Insurance Plan, & Proposed Timeline
  • Summary of Operating Plans, Policies, and Procedures
  • Diversity Plan

Additional requirements for certain license types

In addition to all the requirements mentioned above, Massachusetts Cannabis License applicants would have to comply with additional requirements depending on what type of license they are applying for. If you want more information regarding this, you can always contact a professional so they can lend you a hand through this complex process.

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APPLY FOR A MASSACHUSETTS CANNABIS LICENSE

What are the costs for a Massachusetts Cannabis License?

In order to obtain a Massachusetts Cannabis License, applicants for licensure as a ME have no minimum amount of capital resources that must be demonstrated. However, applicants that want to become an MTC must demonstrate capital resources of $500,000 on their first application and an additional $400,000 for the second and third applications.

However, we have to emphasize that this is just the minimum capital requirement, and there’s no reason why you shouldn’t budget for more in order to be set for a license. In this sense. In this sense we’d recommend any ME applicant to aim for $250,000 – $1,000,000 depending on the type of license they’d want while MTCs should be aiming for $750,000 or higher. 

Further, all applicants are required to set aside, either through a bond or an escrow account, an amount of money sufficient to cover the dismantling and winding down of the ME or MTC. The amount set aside must be enough to cover the cost of satisfying any outstanding state or municipal sales tax obligations, costs incurred securing the licensee’s facility, and cost incurred for destroying the marijuana and marijuana products in its inventory. 

If the applicant acquires a bond, the applicant is required to set aside the total amount of their licensing fees as set forth in 935 CMR 500.005 or 501.005, even if the fees have been waived. If the applicant establishes an escrow account, the applicant must set aside at least $5,000 and is encouraged to set aside the total amount of their licensing fees, even if the fees have been waived. 

If the applicant acquires a bond, the bond should reflect the following:

  • The applicant is the Principal;
  • The Commonwealth of Massachusetts Cannabis Control Commission, 2 Washington Square, Worcester, MA, 01604, is the obligee; 
  • The purpose of the bond is to cover any costs incurred by the Commission to satisfy any outstanding state and local sales tax obligations, costs incurred to secure any licensed marijuana facility, costs incurred to destroy the marijuana and marijuana products in its inventory, and to cover other costs incurred by the Commission or its designee in dismantling or winding down of the licensee’s facility in accordance with its policies and governing laws. 

If the applicant establishes an escrow account, the account should reflect the following:

  • The Commonwealth of Massachusetts Cannabis Control Commission, 2 Washington Square, Worcester, MA, 01604, is the sole beneficiary; and 
  • The purpose of the bond is to cover any costs incurred by the Commission to satisfy any outstanding state and local sales tax obligations, costs incurred to secure any licensed marijuana facility, costs incurred to destroy the marijuana and marijuana products in its inventory, and to cover other costs incurred by the Commission or its designee in dismantling or winding down of the licensee’s facility in accordance with its policies and governing laws.

Key Points on Massachusetts Cannabis Legislation

Home grow in Massachusetts?

  • YES, The law allows an individual over 21 years of age to grow up to six plants in their home.

Social Equity in Massachusetts Cannabis Laws?

Bare Minimum Criteria Towards Restorative Justice:

  • Expungement? YES
  • Social Equity Provisions? YES
  • Portion of Taxes Allocated to Impacted Communities? YES

Cannabis Possession Rules in Massachusetts

  • You can possess 1 ounce outside or 10 ounces at home

Licenses Available in Massachusetts

  • Marijuana Cultivation License.
  • Craft Marijuana Cooperative.
  • Marijuana Product Manufacturer. 
  • Marijuana Retailer. 
  • Marijuana Transporter. 
  • Marijuana Research Facility. 
  • Marijuana Microbusiness. 

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