EON Urges CCC to improve ownership data transparency & tip line and urges Legislature to protect competition

Following up on a previous call for an investigation into alleged license cap violations, EON and members of our Mass. Cannabis Equity Council sent the following letter urging the CCC to improve ownership data transparency & tip line and urge the Legislature to protect competition.

Dear Acting Chair Stebbins and Commissioners Camargo, Concepcion, and Roy:

Thank you for your ongoing commitment to advancing and safeguarding the Legislature’s mandate that the Cannabis Control Commission “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” (M.G.L. c.94G, § 4(iv)).

Equitable Opportunities Now and our Mass. Cannabis Equity Council deeply appreciates the ongoing work of Commissioners and staff to establish a tip line for stakeholders to report violations of cannabis laws and regulations, including violations of cannabis ownership limits.

We particularly want to commend Commissioner Roy for her outspoken leadership on the tip line and for identifying the opportunity for the Commission to expand ownership data accessibility and transparency, similar to the records available on the Secretary of the Commonwealth’s website.

In follow up to our previous request for an investigation into allegations that Ascend Wellness owners are in violation of ownership limits, an anonymous tip line, disclosure of past investigations, and resolutions of ownership investigations (forwarded below), we are writing to urge you to take further actions to strengthen competition and fairness in the cannabis industry:

Invest in improved data accessibility and transparency as part of the Cannabis Control Commission’s planned technological upgrades
Strengthen and expedite plans for a complaint tip line
Endorse a policy statement and leverage legislative outreach to convey the Commission’s general support for protecting existing ownership limitations to support an industry that protects public safety, health, and welfare, and that promotes an equitable and fair marketplace
Enhance value of equity licenses through targeted regulatory reform

We appreciate your consideration of these recommendations and welcome the opportunity to discuss them further. Please don’t hesitate to contact EON Policy Co-Chairs Kevin Gilnack (kevin@masseon.com) and Armani White (armani@masseon.com) if we can ever be a resource or partner.

Invest in improved data accessibility and transparency

As the Commission evaluates how to continue to expand its data and technological accessibility, please ensure that improved transparency around license ownership is a critical component of your technological upgrades.

As Commissioner Roy recently pointed out, there is currently no simple way for the public to access comprehensive information about cannabis business ownership or to filter retailers by their status as social equity or disadvantaged businesses. This must change.

For example, the CCC’s retail finder does not allow users to filter retailers by status as a social equity or disadvantaged business, find delivery operators, or link to all the related public documents and ownership information related to that licensee.

The CCC’s License Tracker has a keyword search and sortable columns but no way to filter by license type or priority status, and only provides a link to the PDF of the Executive Summary for that license. The keyword search only searches the business name – it does not allow you to search by owner names contained in the PDFs. The Executive Summaries do not include any information about Positive Impact Plans or expedited review status, nor links to other licensee documents.

We urge the CCC to update its Find A Retailer and License Tracker tool to ensure that patients, consumers, and community members can:

Filter by status as Social Equity Business, Disadvantaged Business, unionized organizations, and other criteria as determined by the CCC, Massachusetts Cannabis Advisory Board, and stakeholders
Find delivery operators in their area
Access all publicly available licensing documents, including the Positive Impact Plans (PIPs)
- Report progress towards PIPs and Diversity Plans, if available
View the owners of each licensee and click on the owners’s name to view all associated licensees and licensing documents
- Redact all personal contact information and other private information such as social security numbers, birthdates, and other information that should be protected as identified by stakeholders

Potential Legislative Support

EON is proud to support the Cannabis Control Commission’s (CCC) FY25 supplemental budget request, particularly crucial funding for the Commission’s Social Equity Program and for technology upgrades needed for improved accessibility. As the CCC and Legislature determine how best to support necessary technological upgrades, we urge both to ensure that enforcement of ownership limitations and transparency around ownership are central to those discussions.

Equitable Opportunities Now was also proud to work with Sen. Jason Lewis on S. 53, An Act to Support Cannabis Equity Businesses. This bill, which was favorably reported by the Joint Committee on Cannabis Policy as S. 2597, begins to improve to the CCC’s retail finder.

In light of recent developments, we have urged the Senate Committee on Ways & Means to enhance S.2597 by adding language that ensures the CCC’s retail finder and license tracker enable the public to easily view license owners and their related licenses in addition to enabling patients and consumers to shop their values with more robust filters and searches.

While we hope that the Legislature will clarify the need for the CCC to improve its technology to make it easier for users to find equity and delivery businesses and ownership information, it does not need Legislative action to move this forward.

The CCC has the prerogative to enforce laws such as ownership limits and promote full participation in the industry. Data transparency and accessibility is a crucial tool in delivering on that mandate. We urge you to look to examples like the Secretary of the Commonwealth for how to enable the public to easily track relationships between businesses and owners and to revamp your retailer finder to address the priorities of equity businesses.

Strengthen and expedite tip line

We appreciate Commissioner Roy’s ongoing commitment to bringing a tip line to reality, the Commission’s attention to this matter, and the Commission staff’s support.

There are a host of topics on which the CCC should have a clear channel to receive allegations and complaints, including but not limited to:

Violations of ownership and control limitations
Workplace and worker safety concerns
Consumer, patient, and product safety
Municipal violations of equity and HCA policies
Workplace discrimination, intimidation, or harassment
Irregular lab results and practices
Concerns with Commissioner and/or staff behavior
Licensee violations of other regulations and laws
Waste and abuse

Ensuring that no individual or entity is able to circumvent our intentionally strict ownership limits and exercise excessive influence over the market is crucial for protecting competition, and an anonymous tip line is essential to ensuring licensees, investors, workers, and consumers are able to provide crucial information to the CCC for further investigation.

We are encouraged that a mechanism for reporting complaints, concerns, and allegations is under development and urge you bring it online as soon as possible and avoid creating unnecessary barriers to reporting by requiring complainants to identify themselves.

To reduce the risk of unfounded or malicious complaints through the system, while preserving the opportunity to report anonymously, we encourage you to consider the following:

Encourage complainants to be as detailed as possible
- Emphasize that Commission staff need sufficient details to form the basis for an investigation
- Reassure workers, investors, and other insiders of any applicable whistleblower for Massachusetts investors or workers, or other protections against retaliation, with links to more information
- Be clear about the circumstances under which the complainant’s name would become available to the reported person(s) or entities and/or the public, and what information would be protected
- Request as many details as possible such as
  - date(s) of instances
  - potential witnesses and individuals who might have relevant information
  - contact info of potential witnesses
  - ability to upload photos and documents
  - ability to write and format lengthy narrative descriptions
  - dropdown menu to select the category of complaint
  - any other fields that may be helpful depending on the type of complaint.
Commit to having a conversation with and providing updates about the investigation to individuals who provide their names and contact information
Encourage submissions by keeping all but the most essential fields optional
Allow a complaint to be submitted as long as it includes just one of the following:
- Name
- Agent registration number
- Phone number
- Email address
- Uploaded document(s) and/or photo(s)
- One or more people identified as witnesses or having additional information that includes name, email, and phone number
Acknowledge that while the CCC will attempt to investigate every credible complaint, acceptance of form submission does not guarantee investigators will have sufficient information to investigate every complaint
Provide transparency around complaints and investigations with an online portal that lists all complaints, self-reported incidents, and violations found and investigations led by Commission staff that includes
- how the incident/investigation originated
- licensee, municipality, owner, or entities involved
- category of potential violation(s) being investigated
- resolution (NODs, final orders & stipulated agreements, investigation closed due to lack of information, no violation found, or other resolutions)
Provide information on next steps complainants can take if they do not hear back or are unsatisfied with the resolution of their complaint, which could include
- Requesting a review of the complaint by the Chief of Investigations
- Contacting Commissioners, a designated Commissioner, and/or the Executive Director
- Referring the matter to another relevant agency such as
  - CCC HR Department
    - Commissioner or staff complaints
  - CCC Commissioners
    - Staff complaints
  - Mass. Department of Agriculture
    - Pesticides
    - Testing
    - Worker and workplace safety
  - Mass. Department of Public Health
    - Product safety
  - Mass. Commission Against Discrimination
    - Workplace discrimination or harassment
    - Commissioner or staff complaints
  - Mass. Attorney General’s Office
    - Ownership limit violations
    - Municipal equity and HCA violation
    - Wage & hour violation
    - Commissioner or staff complaints
  - Mass. Auditor and Office of Inspector General
    - Ownership limit violations
    - Waste and abuse
  - Mass. Governor
    - Commissioner or staff complaints
  - Mass. Treasurer
    - Commissioner or staff complaints
  - Mass. Superior Court
    - Municipal equity and HCA violation
    - Accounts receivable issues
  - U.S. Occupational Safety and Health Administration
    - Worker and workplace safety

Ensuring that licensed businesses, owners, and municipalities are in compliance with relevant laws and regulations is one of the most fundamental roles of the Commission and we urge you to act with haste and thoughtfulness to get the tip line online and ensure it is designed to encourage legitimate and actionable complaints, without unnecessary barriers.

Endorse a policy statement and leverage legislative outreach to convey the Commission’s support for protecting existing ownership limitations

This is a robust lobbying effort underway by the largest and most politically connected operators to change the Commonwealth’s ownership limits. The proposed change would allow the most profitable multi-state operators (MSOs) to acquire more market share while reducing the number of equity operators – undermining the Commission’s mandate to foster full participation in the industry.

We are alarmed that owners of one MSO leading the lobbying effort to change the rules on applicants and licensees have been repeatedly accused of violating ownership rules, as discussed in our prior email below.

This cornerstone of the Commonwealth’s cannabis law is critical to protecting competition and giving social equity businesses the runway they need to succeed in this industry.

At a time when critical reforms to delivery are just coming online, the Cannabis Social Equity Fund is about to release its first full round of grants, social consumption is about to be unveiled, and we should be discussing extending the exclusivity period, it would be devastatingly disruptive to enable MSOs to dominate the market further by acquiring social equity businesses.

The overwhelming majority of cannabis social equity businesses strongly support preserving this aspect of the law because the success – and value – of their businesses depend on it.

The CCC’s ability to encourage full participation in the industry by those most harmed by the war on drugs also depends on the preservation of this crucial policy.

We were relieved that the Massachusetts House of Representatives rejected an effort to change the rules and that there was no similar effort in the Senate this year, but we fully expect large and well-connected operators to double down on their advocacy for this giveaway to MSOs in the upcoming 2025-2026 legislative session.

In anticipation of the quickly approaching next legislative session, we implore the CCC to endorse a policy statement in support of preserving existing ownership limits and use your legislative outreach to convey the Commission’s policy position to the Legislature.

While the Commission does not take positions on specific bills, its legislative outreach policy permits the CCC to advocate for general policies to support an industry that protects public safety, health, and welfare, and that promotes an equitable and fair marketplace. The Commission may also, by majority vote, approve policy statements to aid the Legislature on topics that fall under the agency’s purview.

Protecting competition and giving equity businesses an opportunity to succeed through enforcement and protection of ownership limits is central to the agency’s purview and essential to promoting an equitable and fair marketplace and we implore you to adopt a policy statement affirming the Commission’s general policy position that the current ownership limits are essential to protecting equity and competition.

The Commission’s legislative outreach policy has been crucial to advancing needed policies like HCA reform, the CSETF, and veterans’ access to medical marijuana. We urge you to build on the Commission’s history of leadership by standing with small, locally-owned businesses led by those most harmed by the war on drugs and speaking out in favor of protecting the current rules as this industry takes roots and gets off the ground.

Enhance the value of equity licenses through targeted regulatory reform

We recognize that a very small number of cannabis social equity business leaders see a loosening of rules on MSOs as a path for a profitable exit from the industry. However, such a change would invite a race to the bottom, with windfalls for a chosen few and even more challenging market conditions for the majority of equity businesses who don’t wish to sell in the near or distant future.

Allowing MSOs to control more market share by acquiring equity businesses not only undermines the will of voters, the Legislature, and the Commission, it will also make it harder for equity business leaders to raise capital or sell their licenses in the future by making the Commonwealth’s market less appealing to small and medium-sized owners and investors from other states looking to expand into Massachusetts.

We urge Commissioners and staff to work together with stakeholders and the Legislature to advance meaningful, targeted regulatory reforms that will reduce costs and increase profitability, value, and opportunities for success for cannabis social equity businesses.

Regulatory reforms needed to support social equity businesses include:

Extending exclusivity for delivery and requiring a study to demonstrate sufficient progress toward full participation before it can be removed
Establishing workable social consumption regulations with low barriers to entry and at least five years of exclusivity
Providing dedicated support staff to answer questions from equity applicants and licensees
Convening stakeholders to discuss the potential merits and drawbacks of
- Statewide exclusivity period for all license types
- Statewide 1:1 licensing ratio for all license types
- Statewide cultivation canopy limit
- Other statewide licensing moratorium or cap proposals, provided the existing ownership limits stay in place.
Implementing medical vertical de-integration with equity exclusivity to better serve patients in Areas of Disproportionate Impact and open additional revenue channels for equity licensees
Further reducing or eliminating fees for equity businesses
Ensuring prioritization of equity businesses at all stages of processing application and licensing submissions and when scheduling inspections and other meetings
Incentivizing licensees to stock products from equity cultivators and manufacturers through leadership rankings and Positive Impact Plans
- Tracking and publishing data on licensee commitments and progress toward purchasing from equity businesses
Allowing delivery to No Towns and hotels
Reforming agent registration and badging to enable one badge per agent and end wasteful duplication
Reforming advertising, sales, and reward program regulations to enable small businesses to compete
Aligning our adult use and medical program with other states regarding potency and purchase limits and patient and doctor registration reciprocity
Improving the retail finder
Funding the Social Equity Program
Launching anonymous tip line
Conducting a comprehensive review of all licensee ownership for compliance, either as part of a forensic audit or standalone effort
Improving ownership data transparency and accessibility

Conclusion

Thank you again for all of your work to advance a more equitable cannabis industry in Massachusetts and for your attention to this matter. The Legislature has set – and the CCC is working hard to support – an ambitious vision for equitable economic opportunity, and we look forward to working together toward that vision.

Should you have any questions or wish to discuss this matter further, please contact Equitable Opportunities Now Policy Co-Chairs Armani White (armani@masseon.com) and Kevin Gilnack (kevin@masseon.com).

Thank you,

Shanel Lindsay, Equitable Opportunities Now
Devin Alexander, Rolling Releaf (Newton)
Sean Berte, Firehouse (Boston)
Ross Bradshaw, New Dia & Equitable Opportunities Now (Boston)
Christopher Fevry, Dris Brands
Kevin Gilnack, Equitable Opportunities Now (Lowell)
Nike John, The Heritage Club (Boston)
Brian Keith, Rooted In Newbury St (Boston)
Drudys Ledbetter, Zèb Boutique (Boston)
Laury Lucien, Cami Flower
Kim Napoli, Esq., Strain Station, LLC & Massachusetts Cannabis Advisory Board
Mario Signore, Green Flash Delivery
Jeff Similien, Lowkey
Philip Smith, Freshly Baked
Ruben Seyde, Delivered Inc.
Shaleen Title, Parabola Center
Tristan Thomas, Black Economic Council of Massachusetts
Armani White, Firehouse & Equitable Opportunities Now (Boston)

———- Forwarded message ———

From: Kevin Gilnack
Date: Wed, Sep 4, 2024 at 2:16 PM
Subject: BECMA, EON, & social equity business leaders request urgent review for potential ownership cap violations, anonymous tip line

Dear Senate President Spilka, Speaker Mariano, Chair Gomez, Chair Donahue, Acting Chair Roy, and Commissioners Camargo and Stebbins:

We deeply appreciate the House’s rejection of Amendment 10 to the Economic Development bill (H.4789), which would have compromised that mandate by enabling the largest, most profitable companies to dominate more of the market at the expense of cannabis social equity businesses. We also commend every Senator for not filing a similar amendment.

As you may be aware, the Massachusetts Cannabis Equity Council is an advisory committee to Equitable Opportunities Now of Economic Empowerment and Social Equity Program business leaders that came together to oppose changes to the Commonwealth’s license caps and changes to “ownership definitions, and more than 40 cannabis community leaders have signed a petition urging this misguided proposal be rejected.

Ascend Wellness and other large operators and influential figures are leading the effort to change the license cap. Given the considerable lobbying efforts by Ascend and other multistate and politically connected operators, we are deeply troubled by reports from local cannabis blogger Grant Smith Ellis. He alleges that “Abner Kurtin, an owner of Ascend Wellness, allegedly owns/controls between 6-9 licenses in the state of Massachusetts,” a potential violation of the Commonwealth’s license cap.

Considering that one of the leading voices in favor of lifting the license cap is allegedly in violation of these very limits, we urge the Cannabis Control Commission (CCC) to immediately initiate an investigation and full review of all license ownerships to ensure strict compliance with the CCC’s regulations and the Commonwealth’s anti-monopoly, pro-competition, and pro-equity policies – starting with Ascend Wellness. This review should prioritize practices for providing greater transparency in license ownership.

Furthermore, given that allegations of Ascend violating the state’s license cap date back to at least 2021, it is very concerning that the CCC has not already investigated and publicly reported the results. According to the Oct. 29, 2021 complaint filed in St. Fleur, Marie et al vs. Kurtin, Abner et al (21-84CV02475) “Kurtin and [Gregory] Thomaier hold equity positions in, manage, have authority over, or direct entities… that invested in, lent money to, or attempted to develop more than three (3) retail cannabis dispensaries or cannabis cultivation facilities in Massachusetts.” If an investigation into the reported 2021 allegations was conducted, we urge staff and Commissioners to address the results of the investigation at a public meeting.

We further urge the Legislature to ensure the Commission has the necessary resources and clear mandates to uphold compliance with your laws preventing market consolidation.

While the allegations against Mr. Kurtin are the most high-profile and publicly reported potential violations of the license cap, it is widely known within the industry that some owners are using family members and others as straw purchasers, exercising control not reflected in CCC documents, and otherwise violating ownership limits to exercise excessive influence over this fragile emerging market.

The CCC must demonstrate its commitment to market integrity by strictly enforcing the Commonwealth’s ownership limits. This should begin with a thorough investigation into the ownership structure of Ascend Wellness and its affiliations with other operators. Additionally, we urge the CCC to conduct a comprehensive review of all license holders to ensure no violations of ownership limits by using relatives or associates.

The CCC should also immediately establish an anonymous tip line and online form for reporting potential violations of ownership limits and efforts to evade them, and the CCC, Legislature, and other state agencies should ensure that workers, investors, and anyone else with information about potential violations of ownership limits are aware of their rights and potential whistleblower protections.

Should the CCC need additional staff or external expertise to complete this investigation and review, we strongly urge the Legislature to allocate the necessary resources for the Cannabis Control Commission to ensure compliance with the Commonwealth’s laws – beginning with Ascend Wellness.