Countdown to cannabis
More than a year after state voters approved adult recreational marijuana use, 107 pages of draft regulations are in hand. After having those tentative rules batted around at public hearings over the next two months, starting in Pittsfield Feb. 5, the Cannabis Control Commission must firm up state law "935 CMR 500.000: Adult Use of Marijuana," by March 15.
The commission then dives into the business of receiving and approving applications in what its chairman admits is a "challenging" process.
But you can't hurry a plant.
Even before rules are in place, the commission is counting on an initial supply of cannabis from existing sources to feed the recreational market.
Thanks to the state's medical marijuana program, those supplies are out there. They include operations like Theory Wellness of Bridgewater and Great Barrington and the soon-to-open Berkshire Roots cultivation facility and dispensary on Dalton Avenue in Pittsfield.
Nick Friedman, president of Theory Wellness, expects his firm to be in the vanguard of recreational sales, both at its two current dispensaries and as a wholesale supplier to other retailers.
It's go time, he says.
"A facility should be preparing to start growing right now," Friedman said.
Meantime, entrepreneurs who still haven't broken in await their chance, hoping Massachusetts' rules provide opportunities for smaller growers, such as Berkshires farmers.
"This is estimated to be a billion dollar industry and we need to make sure western Mass. is not left behind," said State Sen. Adam Hinds, D-Pittfield.
Hinds said he and others are working with the Cannabis Control Commission and with prospective local cultivators to "ensure a level playing field."
"I am glad we appear to be on track for regulations to be completed March 15 as we move towards applications by April 1 and having stores open by July 1," Hinds said.
When recreational sales begin this summer, they will be the first to be regulated east of the Mississippi River. Local shoppers are expected to propel a business that grew to $6.7 billion in 2016 in North America and is likely to top $20 billion in revenue by 2021, as decades of resistance fall away.
Legal sales in California begin today, Jan. 1. While states including Washington and Nevada allow use, marijuana remains a controlled substance elsewhere, prohibited by the federal government.
As producers lock in, communities across the state, and in Berkshire County, remain befuddled by recreational weed sales.
Many are hedging their bets on the new cannabis landscape by opting to delay the start of retail sales.
Others cities and towns, though, are laying out welcome mats. Residents of Clarksburg voted last week to allow recreational marijuana sales in a small industrial zone on River Road (Route 8), near the town hall.
You still can't buy gas in Clarksburg, but in time shoppers may be able to grass up.
With its new bylaws, Clarksburg stands to secure something it sorely needs: new tax revenue. The state law allows communities to place a 3 percent tax on sales of recreational marijuana.
"Most of our towns are interested in diversifying their revenue sources, and this would be one way to do it," said Thomas Matuszko, assistant director of the Berkshire Regional Planning Commission.
Public health advocates, meantime, are expected to press for greater protections for minors than the draft rules provide.
"Marijuana is the No. 1 substance for which youth receive residential addiction treatment in Massachusetts," said Wendy Penner, director of prevention and wellness for the Northern Berkshire Community Coalition.
With full legalization, she is concerned that remaining brakes will be removed from use of a substance young people already view as normal and acceptable.
"They're perceiving this as not harmful," Penner said.
Steven J. Hoffman, chairman of the Cannabis Control Commission, is vowing to meet the July 1 start of recreational sales. That's already six months later than voters wanted, under the November 2016 referendum question.
In draft regulations published online late last month, Hoffman's panel goes where cannabis regulators in other states, like Colorado, initially feared to tread. The draft rules provide for "social use" of marijuana —- in short, allowing the drug to be consumed in public with other people.
That provision is expected to be controversial, as is how new marijuana businesses will be able to advertise their presence. Those issues consume pages in the draft regulations and get specific, as laws must.
Cities and towns will retain a great deal of local authority to regulate any such "social use" businesses, according to the draft rules.
While this is the first time the state has written rules for recreational marijuana sales, Massachusetts can take guidance from experiences in other states, such as Colorado, where a medical-only program evolved into adult recreational use.
When it comes to protecting young people, the state is considering policies shaped to deal with concerns about youth access to alcohol and tobacco. The commission's proposed rules, for instance, bar marijuana businesses from using cartoon images to entice interest from those under 21 — just as Joe Camel came in for a thrashing from anti-smoking advocates years ago.
Edible products cannot take the form of animals or fruits. And in fashioning logos, new cannabis businesses cannot use images of marijuana or play off the plant's many names and nicknames.
Penner, of the Northern Berkshire Community Coalition, suggests such rules only go so far in protecting young people.
"It ends up inevitably targeted to youth, because they're the next market," she said of cannabis marketing.
The adolescent brain, Penner and others in the health field note, remains a work in progress and is vulnerable to addiction.
The point now, she holds, isn't to undermine the ballot result but to understand the risk full legalization poses, at a time when cannabis use by Berkshires teenagers has been ticking up. Use among eighth-graders increased from 7 percent in 2013 to 11 percent in 2017, according to the coalition.
"It is really hard to have a nuanced conversation about this," Penner said, stressing that her goal isn't to roll back the law. "That is not what this is about."
One of 2018's expected cannabis leaders in the Berkshires hasn't even made its official arrival.
The people behind Berkshire Roots have been overhauling a building at 501 Dalton Ave. in Pittsfield to create 15,000 square feet of cultivation space plus offices and a dispensary for medical marijuana customers.
John E. Mullen IV, the outfit's CEO, says he expects to open as a medical dispensary by March, then apply for a license to sell to the recreational market as well.
Even before that, Berkshire Roots will expand to more than 35 employees. Some of those recruited worked in Colorado and have experience moving from medical to adult-use markets.
"We're pretty excited about being the first growing facility in Berkshire County," Mullen said. "It's a huge undertaking and a big investment financially and in time."
The company began gutting the space, the former home to a Salvation Army store, almost a year ago. An auto shop moved out of the back and a pool hall lost its lease this fall.
Now, the full space, nearly 26,000 square feet, will be devoted to the cannabis business.
On Friday, an inspector from the state Department of Public Health spent half the day checking the company's adherence to rules governing the latter stages of cannabis production, including flower processing and extraction of psychoactive ingredients.
"To make sure we have all of those things dialed in. It's highly regulated and you have to be on the top of your game," Mullen said.
As the market widens this year to include recreational, others will get a taste of that level of oversight.
"It's not going to be any less regulated," he said.
Guiding the growing operation is Dennis DePaolo, chief cultivation officer, backed up by Joe Baillargeon, Berkshire Roots' production manager. Investors in the company include Matthew C. Feeney, Andrea F. Nuciforo Jr. and Albert S. Wojtkowski, according to DPH documents.
Berkshire Roots and Theory Wellness are the only two dispensaries in Berkshire County. Another with a prospective address beside Berkshire Roots on Dalton Avenue, Heka Health, won early DPH approvals but has not moved forward. An attorney for the firm said earlier it planned to open last fall but the site at 531 Dalton Ave. is quiet.
And a fourth, Temescal Wellness, expects to open in Pittsfield in 2018 but has been focusing for now on its production facility in Worcester, said Julia Germaine, its chief operating officer.
Building a brand
Friedman, the Berkshires native who helped create Theory Wellness, said the year ahead offers his company a chance to reach more customers and expand its brand.
Having been open for months, both in Bridgewater and in Great Barrington, Friedman feels he and his colleagues, including CEO Brandon Pollock, are poised to make an "easy transition" into the recreational side. Theory Wellness will be applying to sell to the wholesale recreational market from its growing facility in southeastern Massachusetts.
"There's a lot of opportunity to be a leader in the field — and a lot of issues to work through as the new regulations are formalized," Friedman said. "The next milestone will be the final draft."
Looking ahead, Berkshire Roots will be seeking permission to open a second dispensary, likely outside of Berkshire County. And Theory Wellness may look for a third outlet.
Even as it considers growth, the company sees itself as a "craft" producer, given the 12,000-square-foot size of its cultivation plant. Its motto is "small-batch cannabis."
Friedman says he hopes the industry, still young in Massachusetts, keeps a place for smaller producers.
"I think the small-scale craft producers can be a value in the larger market," he said.
Nathaniel Karns, executive director of the Berkshire Regional Planning Commission, said it could be difficult for small operations to find their way. Those that do get into the cannabis trade early are likely to prosper, even if they sell out later to larger outfits.
"You have to sort of wonder with any kind of business if that isn't the natural flow of things," he said, citing the example of cable television in its early years, when small companies served communities.
"It will be interesting to watch it unfold," Karns said.
The website fivethirtyeight.com reported last week that in the last several years, the biggest cannabis companies nationally have been shouldering out small firms. The site notes that retail prices for cannabis typically fall after legalized sales begin, squeezing margins for small operators.
As the Boston Globe's Dan Adams notes in his latest "This Week in Weed" recap, the draft rules in Massachusetts seek to create opportunities for small business.
"Whether that's enough to make little outfits here viable remains to be seen," Adams writes.
The commission holds a mandate from the Legislature to provide opportunities to existing farmers.
Lawrence Davis-Hollander, an ethnobotanist interested in outdoor cultivation in Berkshire County, is concerned about wording in one draft regulation that says the growing area cannot be visible from a public place, such as a road.
"That is patently absurd. It's legal — hello?" said Davis-Hollander. "Either they are legalizing it or not."
At the Pittsfield hearing in October, he had asked commissioners not to set "overly onerous" rules for local farmers.
One of the many people watching the rule-making process, and looking for a way into the field, is Donna Norman of Otis.
She hopes to secure a license to sell cannabis as what she's calling the Calyx Berkshire Dispensary, somewhere in southern Berkshire County.
Her business name says a lot about her motivations. Calyx is the female part of the cannabis plant.
"I would love to be one of the first woman-owned cannabis stores in the Berkshires," she said. "It's giving us a voice in an industry that's always been a man's world. I don't think enough women are supported in business. This is our time."
She adds, "I am female. Hear me roar."
Norman was among several dozen people who offered comments at the October public hearing Hoffman's commission convened at Berkshire Community College. She pointed out at the hearing that cannabis use remains stigmatized.
One of her goals is to help overcome that, she said in an interview Saturday. That's in part why she applauds the commission's embrace of "social use," in which establishments could be licensed to allow people to consume cannabis together in public, under strict rules.
"You can't regulate an industry and not expect consumption anywhere," Norman said. "Massachusetts is looking far ahead and thinking out of the box. It's a very social thing, like alcohol."
Norman, who has worked in the finance field for three decades, said she continues to scout for possible retail locations in the county.
"The communities really need to support this industry," she said. "We need jobs. A lot of the communities are shooting themselves in the foot by putting in these moratoriums."
"I'm trying to tiptoe through the landmines and figure it all out," Norman said.
Though the rules for growing, transporting and selling weed to adults are not yet fully defined, one thing is clear, people in the business say.
Expect no shortage of customers.
"I think there will be a robust market to serve," Friedman said.
Larry Parnass can be reached at email@example.com, at @larryparnass on Twitter and 413-496-6214.
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