Mass. cannabis regulators consider freezing grow licenses
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Massachusetts regulators want to press pause on issuing new licenses for cannabis grow sites in hopes of stabilizing the struggling market.
The big picture: Massachusetts' cannabis industry is grappling with high operational costs, red tape and an oversupply of flower.
Catch up quick: Several cultivation sites and retailers have closed as wholesale prices drop, including Ayr Wellness' facility in Milford in August.
- Ayr's closure resulted in 157 job losses.
- Meanwhile, the average price for an eighth of an ounce of pot fell to a new low of $14.20 in November, per Cannabis Control Commission data. (In 2021, the average price was $45.)
State of play: The commission is planning a public hearing on freezing cultivation licenses, though it hasn't set a date yet.
- Commissioners, who on Thursday approved a motion directing the CCC to organize a hearing, are seeking testimony not only on a cultivation license moratorium but also a freeze on other license types.
- If approved, the freeze wouldn't apply to a business that has already applied for a cultivation license.
What they're saying: "I think the industry would breathe a sigh of relief," Commissioner Kim Roy said.
- "It's trying times right now for a lot of these license [holders] — and all of them, all the way up to retail, everyone in the supply chain is feeling it."
- But, she added, public feedback is crucial in informing the commission's next steps.
By the numbers: Massachusetts has nearly 3 million square feet of land for cannabis farming and another 700,000 square feet that could eventually come online, Roy said.
- That total would amount to more land per adult age 21 or older than Connecticut, which has higher cannabis flower prices, and Maine, per Roy.
- Commissioners said they hope pausing new licenses will help stabilize the market.
Zoom out: A statewide freeze is rare, but not unheard of.
- Oregon has had a yearslong moratorium on new licenses with few exceptions.
Between the lines: The pause could also offer breathing room to the beleaguered commission.
- Regulators have many issues to address, ranging from bolstering worker safety standards and enforcement to setting up a legal market for pot lounges.
- "It's clear that obviously this could provide the ability for us to focus more on public health and safety," Chair Shannon O'Brien tells Axios, adding that she has been asking how regulators could be more transparent and accountable.
What we're watching: State legislators are negotiating the final terms of a cannabis reform bill that, among other things, would let cannabis companies obtain more dispensary licenses.
- That could mean more license applications and other changes the commission would need to adapt to during a cultivation license freeze.