The Bill Has Landed

No sooner said than done, the long-awaited conference committee bill amending Chapter 334 of the Acts of 2016 (the adult use cannabis referendum) has been released.  Our complete summary of the new legislation and a comparison to the referendum’s original language can be viewed here:

Summary of Cannabis Legislation

Some big picture highlights:

(1) The referendum’s one year head start for many medical marijuana licensees has been eliminated.  Instead, applicants for adult use licenses who are open and operating at the time of application (April 1, 2018) as registered medical dispensaries must have their licenses acted upon before anyone else, but all applicants will be eligible to apply at the same time. This narrows the “head start.”

(2)  For those applicants for adult use licenses who hold Provisional or Final Certificates of Registration with DPH for medical licenses, but may not be open, the CCC must provide an “expedited review.”

(3) RMDs are no longer required to organize as not-for-profit corporations. As we wrote about here, RMDs that are operating or are in queue at DPH may now reorganize as for-profit business entities, but the process could be technical and have important tax and other business implications.

(4)  A licensee is limited to holding three of each type of license: 3 adult use retail, 3 adult use cultivator, 3 adult use product manufacturer, and 3 medical marijuana licenses.

(5)  Applications for adult use licenses will be accepted on April 1, 2018.

(6)  Municipalities that voted in favor of the adult use referendum may not prohibit operation of any type of adult use establishment without a citywide or town-wide referendum.  Municipalities who voted against the adult use referendum may prohibit operation of any type of adult use establishment by vote of their elected body (e.g., City Council or Selectmen).

(7)  The effective tax rate is now a maximum 20%, increased from 12% in the referendum.

The bill now moves onto both chambers, which are expected to pass it without amendment.  There aren’t as yet any indications that Gov. Baker has reservations, so it’s a good bet that this will be the law going forward.

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