Protect Equity & Competition in MA’s Cannabis Industry by Preserving License Ownership Limits

Advance Economic Equity

Protect Against Market Consolidation

Ownership limits prevent a small number of large multistate operators (MSOs) from dominating the market, ensuring opportunities remain for small and equity-focused businesses.

Vertically integrated MSOs are already driving a race to the bottom with wholesale and retail pricing.

Preserve Value of Equity Licenses

States like Arizona have shown that lifting ownership limits leads to a devaluation of equity licenses, often reducing their worth from millions to mere thousands.

Of the 26 people who won the AZ cannabis equity license lottery, most sold… for much less than their value. At least four received as little as $35,000 for their licenses. (Arizona Republic)
Among 13 Arizona dispensaries that have opened to date using a social equity license, just one of them is owned by an original licensee without support from a corporate dispensary. (Arizona Center for Investigative Reporting)

Encourage Local Investment

By limiting ownership, Massachusetts encourages local entrepreneurs and small business owners to thrive, fostering community wealth rather than concentrating profits in out-of-state corporations.

Several national cannabis license brokers confirm that tMA’s market is attractive to out-of-state owners looking to expand.

Maintain a Level Playing Field

All current licensees and applicants entered this industry with the expectation that lawmakers wouldn’t make radical changes to laws that would drastically change business conditions – particularly changes that make it even harder for equity businesses.

Equity and general applicants have built business plans based on current ownership limits.

After years of struggling under overly strict regulations and systemic benefits favoring large, vertically integrated operators, businesses deserve an opportunity to take root and grow without changes that devalue their businesses and make it harder to raise capital from non-MSO investors.

Support Social Justice

Honor the Will of Question 4, Mass. Sess. Laws, ch. 55 (2017), & Mass. Sess. Laws, ch. 180 (2022)

Massachusetts’ cannabis ballot question & legislation intended to provide opportunities for communities disproportionately harmed by the War on Drugs. Ownership limits are a cornerstone of this commitment.

Enable the CCC to Deliver on Legislature’s Mandate

When Legislators rewrote Question 4 in 2017, they required the CCC to promote and encourage full participation in the regulated cannabis industry by people from communities that have previously been disproportionately harmed by marijuana prohibition and enforcement and to positively impact those communities.

Mass. law preventing the concentration of licenses is a critical policy for advancing the Legislature’s mandate.

Protect Vulnerable Communities

Lifting the cap would create an uneven playing field, allowing wealthier MSOs to undercut minority-owned and equity businesses, further marginalizing these groups.

Protect Market Stability

Prevent a Race to the Bottom

Enabling the largest, most profitable operators to expand their market share could lead to more extreme price wars that destabilize the market, driving small operators out of business.

Give Equity Businesses a Chance to Thrive

The social equity fund is just starting robust grants, delivery is just becoming profitable, & social consumption is imminent. Businesses need stability and predictability for these opportunities to blossom.

Encourage Diverse Product Offerings

A competitive, decentralized market fosters innovation and diverse product options for consumers.

Ensure Long-Term Market Health

Maintaining limits prevents market consolidation that could lead to monopolistic practices and reduced consumer choice.

Inspire Economic Development

Foster Job Creation

A diverse market supports a greater number of small businesses, which collectively create more local jobs than a consolidated market dominated by a few large players.

Attract New Investors & Entrepreneurs

Ownership limits make Massachusetts an appealing state for new out-of-state investors and cannabis entrepreneurs, promoting innovation and growth without jeopardizing competition.

Learn from Other States

Don’t follow Arizona’s lead

Removing ownership limits led to equity licenses being bought out cheaply by MSOs consolidating the market and undermining social equity goals.

“Just four of the original 26 social equity lottery winners still have an equity stake in the lucrative licenses. Existing corporate dispensaries now own half the licenses outright, with private investors holding equity in 10 more.” (Arizona Center for Investigative Journalism)
“Senate Bill 1262, introduced by Republican Sen. Sonny Borrelli, seeks to restore power to… people from marginalized communities… It would also allow the state Attorney General’s Office to investigate and punish entities that exploited those individuals.” (Marijuana Moment)

Avoid this Pattern of Negative Outcomes

States with lax ownership regulations often experience reduced investment in social equity programs and increased barriers for smaller operators.

Policy and Legislative Goals

Support for Equity-Focused Legislation

Policymakers should focus on measures like increasing the impact of the Cannabis Social Equity Trust Fund, improving technical assistance and prioritization, and reducing operational costs for small businesses rather than increasing MSO market share.

Ensure Fairness in the Legislative Process

Any significant changes, such as lifting the cap, deserve thorough hearings and stakeholder input rather than backroom deals or rushed amendments.

Encourage Consumer Protection

Stimulate Competitive Pricing

A diverse marketplace ensures fair pricing for consumers, whereas consolidation often leads to a lack of competition and higher costs.

Support Quality

Smaller, locally owned businesses often prioritize quality over mass production, benefiting consumers.

Don’t buy into misleading MSO propaganda

Check out EON’s factsheet debunking the MSO-Funded
Banks & Co. and Whitney Economics Study: “A Rising Tide Lifts All Boats: Analysis and Recommendations for Increasing the Cannabis License Cap.”

SPEAK OUT NOW

SIGN ON TO OUR LETTER to Gov. Healey and Legislative Leaders urging them to reject ownership limit changes to show our collective solidarity.
EMAIL YOUR LEGISLATORS directly right now using our easy online form to remind your state Representative and Senator what’s at stake and how important this issue is to you.