Pursuant to the legislature’s direction, the Cannabis Control Commission can start issuing adult use licenses after June 1 and the Commission has indicated that they will start issuing licenses soon.
We expect that a handful of previously medical-only cannabis dispensaries that are awarded adult use licenses will be dispensing both adult use and medical cannabis on July 1 or shortly thereafter. The lines will be very long. The few adult use dispensaries that open will likely run out of the recreational product in the first few days. Over the summer and into the fall, more adult use dispensaries will open including some that were not previously medical dispensaries, but there will be consumer frustration for at least the first six months because the dispensaries will not have enough adult use product to meet the demand.
The reason that the rollout is slow is because our legislature and Cannabis Control Commission have given much discretion to local governments as to whether they will allow adult use marijuana establishments to be located in the municipality and the conditions under which the establishments will be allowed. This has meant that more than half of the communities in the Commonwealth have temporarily or permanently banned recreational marijuana establishments and, even in those communities that allow the establishments, the negotiations with municipalities are difficult. Most municipalities ask that marijuana establishments give the municipality a minimum of 3% of their gross revenues plus donations for community organizations. Also, the government in most municipalities is moving very cautiously and tentatively, which means that the opening of establishments gets delayed.
Despite the licensing delays, Massachusetts is the first East Coast state that will be dispending adult use product and our regulatory structure is comprehensive. Because of this, there is a lot of interest from out of state operators and investors in the Massachusetts market. We expect that the frenzy will continue for a while.