Massachusetts cannabis regulators freeze cultivation licenses
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Massachusetts regulators approved a freeze on new licenses for cannabis grow sites.
Why it matters: The state's flower supply far exceeds demand, with the price of an eighth of an ounce of pot falling to barely $14.
- Customers aren't buying more pot even as it becomes cheaper, citing rising costs for daily necessities and increased scrutiny over mold and yeast contamination.
Driving the news: The Cannabis Control Commission voted, 3-1, to approve a freeze (Commissioner Bruce Stebbins voted no).
- The freeze will start June 16 and last at least four months, at which point commissioners would review whether there's still a large oversupply of flower.
Zoom in: The freeze doesn't apply to micro-business license applicants who are in the social equity or economic empowerment programs.
- Nor would it apply to existing licensees, including those seeking to shrink or expand their canopy.
- The CCC also stopped short of freezing other license categories, including dispensaries.
- Commissioner Kim Roy told Axios earlier this month that a retail license freeze didn't make sense when lawmakers had just voted to lift the cap on those licenses from three to six.
State of play: Massachusetts has between 2.8 million and 4.3 million square feet of space to grow cannabis, but not all of that canopy is in use.
- The latest estimate on canopy usage wasn't immediately available Thursday.
Threat level: The fall of flower prices amid rising operational costs has dealt a major blow to businesses across the state's cannabis industry, not just cultivators.
- 124 businesses shut their doors last year, and so far 37 cannabis businesses surrendered their licenses or let them expire, per the CCC.
- 31 businesses are in receivership, including seven cultivators, and another 30 are in the pipeline, CCC Chair Shannon O'Brien said.