Cannabis Control Commission drafts new regulation for recreational delivery companies repackaging and reprocessing products

The Cannabis Control Commission discusses the whitelabeling of cannabis products on Sept. 10, 2020. Photo courtesy of Pixabay

By Devyani Chhetri
BU News Service

BOSTON – The Massachusetts Cannabis Control Commission took a second glance Thursday at an Aug. 28. regulation that created a new license allowing marijuana delivery companies to become mobile retailers. The regulation also said that delivery companies would not be allowed to repackage and reprocess the products they receive from cultivators and product manufacturers. 

However, they will be allowed to “white label,” to affix their own logo, brand and manufacturing details on the products. 

The regulation, championed by industry stakeholders, will give delivery licenses only to social equity and economic empowerment applicants for an “exclusivity” period of three years.

Commissioner Britte McBride, who is leading the draft on the regulation, said that the regulatory language, currently in its “rough draft” phase, had three issues that needed to be fleshed out.

According to McBride, the first issue was tiering, which refers to making categories for enforcement and compliance. Next came repackaging, which would mean wrapping or resealing marijuana in new packaging without changing its chemical composition. Finally, reprocessing – combining or reconstituting the properties in the flower by adding cannabis oil. 

McBride said that tiering, applied in the commission’s cultivation licenses, may not be applicable to delivery companies.

“There might be a particular volume or size of locations that may require additional resources from our staff, which might need tiering of licenses,” she said. “But wholesale that requires warehousing mitigates the need for tiering.” 

But Commissioner Shaleen Title disagreed and said that tiering shouldn’t be limited to enforcement costs. She said that categorizations should also consider the size of the businesses involved.

“I would be fine with just two tiers, small business or not small businesses, based on our definition for fee waiver purposes,” she said.

Down the line, Title said, the commission will realize that certain barriers need to be addressed. For instance, if the condition of fee waivers comes up, the tiers categorizing businesses as small and otherwise will decide to whom waivers can be applied.

For now, the commissioners agreed that tiering was being taken out of consideration following clarification from Chairman Steven Hoffman. Hoffman, like McBride, felt that tiering wasn’t required.

The agenda moved onto repackaging and reprocessing. Based on his discussion with enforcement representatives, Hoffman anticipated substantial differences in compliance costs between wholesalers who did the repackaging and reprocessing, and ones that did not.

He suggested two scenarios: the first included having two delivery license types where one allowed repackaging and reprocessing, and the other did not.

The other scenario would not allow delivery companies to repackage and reprocess and instead would require that cultivators or manufacturers to supply the packaged product.

Hoffman also suggested allowing white labeling so that wholesalers could build their brand. McBride seconded his suggestion and said that enabling white labeling either at the product manufacturer level or the wholesale level would let companies maintain their business model and not incur additional costs.

Title, however, said that she was adamant about delivery businesses having the option to repackage. 

“There is a consistency issue,” she said. The commission recently changed regulations for retailers to repackage. Delivery operators, as mobile retailers, should also be allowed to do the same, she said. 

Amid differences, the commissioners found consensus in passing a motion to restrict delivery companies from repackaging and reprocessing. These draft recommendations, Hoffman clarified, will be opened to a public hearing on a later date. 

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