A communication from Councillor Zondervan, transmitting a memorandum regarding proposed amendments to the Cannabis …

Subject: Proposed Changes to the Cannabis Business Permitting Ordinance

Introduction I offer these proposed changes in response to concerns raised by my colleagues and members of the public at the April 11, 2019 Ordinance Committee hearing. I believe these simple changes will address many of the concerns raised and will allow us to move forward expediently with one of the most equitable cannabis licensing processes in the Commonwealth.

The biggest proposed change is to simply exclude non-priority applicants entirely, and to limit Priority B applicants to RMDs that are already operational or permitted in the city. I have included a red-lined version of the draft ordinance immediately following descriptions of the proposed changes. Add low-income Cambridge residents to Priority A This expands the definition of a “Group A Priority Applicant” to also give priority to Cambridge residents making below 50% of AMI.

The window to qualify for Economic Empowerment designation has closed at the state level, so this would create an avenue for people to continue to qualify based on their economic status. A geographical preference on its own lets anybody buy their way in.

Change Priority B to Exclude Future RMDs

This changes the definition of a “Group B Priority Applicant” to exclude future RMDs (ones that aren’t already operating/permitted in the city at the time of ordination) from obtaining priority status. I’m also proposing here to exclude existing RMD’s from obtaining priority A status.

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Changes to Permitting Preferences for Priority Applicants

Here I’m proposing to strike the two-year exclusionary period in section 4A, which means the city would ONLY issue permits to Priority applicants, indefinitely. I’m also proposing that we strike section 4B entirely, which would mean that the city would NEVER issue permits to non-Priority applicants. Future councils could of course change either of these, of course.

Changes to Permitting Requirements

Here I am proposing we strike sections 5A2 and 5A3 entirely. By excluding all non-priority applicants indefinitely, we are giving priority applicants a huge advantage. With that change, it makes sense to strike these sections because we don’t want to put burdensome requirements on priority applicants that could ultimately undermine their success. As written, the city could deny a license renewal if a minority-owned business hires 49% minority employees. I don’t think that is consistent with our intent.

We should trust our priority applicants to have every incentive to lift up their own communities, without imposing additional restrictions on them and unnecessarily giving the city more power to oppose them.

Clarify Host Community Agreement Process

Where it is mentioned in both 5A10 and 6, we should clarify that the host community agreement is negotiated through the City Manager’s office.

Enforcement

We should remove the “3 strikes you’re out” provision in section 8 because even a single violation of selling to an underage minor should be punishable by denial of license.

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Chapter 5.50 Cannabis Business Permitting

1. Purpose This ordinance is intended to create a separate local permitting requirement for Cannabis Retail Store, Cannabis Cultivator, Cannabis Product Manufacturer and/or Cannabis Transporter (collectively “Cannabis Business”) applicants to certify compliance with certain conditions in the public interest prior to being permitted to operate a Cannabis Business in the City. The City deems it to be in the public interest to give initial permitting preferences for Cannabis Businesses to Priority Applicants, as defined herein.

2. Definitions Cannabis Business. A Cannabis Retail Store, Cannabis Cultivator, Cannabis Product Manufacturer and/or Cannabis Transporter. Cannabis Cultivator. An entity licensed by the Massachusetts Cannabis Control Commission as a Marijuana Cultivator to cultivate, process and package cannabis or marijuana, and to transfer cannabis or marijuana to other cannabis or marijuana establishments, but not to consumers. A craft marijuana cooperative as defined by state regulation is a type of Cannabis Cultivator.

Cannabis Product Manufacturer. An entity licensed by the Massachusetts Cannabis Control Commission as a Marijuana Product Manufacturer to obtain, manufacture, process and package cannabis or marijuana products and to transfer these products to other cannabis or marijuana establishments, but not to consumers. Cannabis Retail Store.

An establishment authorized to sell or otherwise transfer cannabis or marijuana products to consumers for use off the premises, but not to cultivate, manufacture, process, or package cannabis or marijuana products, in accordance with applicable state laws and regulations.

A Cannabis Retail Store may be licensed to operate as a Cannabis or Marijuana Retailer or registered as a Medical Marijuana Treatment Center, also known as a Registered Marijuana Dispensary (hereafter “RMD”), or both, in accordance with applicable applicate state laws and regulations. Cannabis Transporter. An entity, not otherwise licensed by the Cannabis Control Commission, that is licensed to purchase, obtain, and possess cannabis or marijuana, or

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cannabis or marijuana products, solely for the purpose of transporting, temporarily storing, selling and distributing them to cannabis establishments, not for selling to consumers. Priority Applicant. A person, corporation, or other legal entity applying for a Cannabis Business permit pursuant to this Chapter to operate in the City who is: a. Group A Priority Applicant.

An Economic Empowerment or Social Equity Program Applicant certified as such by the Commonwealth’s Cannabis Control Commission; or a Women or Minority Owned business as certified by the Commonwealth; or a Cambridge resident earning less than 50% of AMI in the tax year prior to application-- to be known as Group A Priority Applicants.

b. Group B Priority Applicant. An RMD operating within the City at the time of ordination that will sell cannabis products in a Cannabis Retail Store pursuant to the Commonwealth’s medical use of marijuana laws, either alone or in addition to operating as a licensed marijuana retailer pursuant to the Commonwealth’s adult use of marijuana laws-- to be known as Group B Priority Applicants. Those who qualify as Group B priority applicants cannot also qualify for Group A.

3. Applicability This Chapter shall apply to any proposed Cannabis Cultivator, Cannabis Product Manufacturer, Cannabis Retail Store, or Cannabis Transporter that is seeking licensure from the Cannabis Control Commission on or after the effective date of this Chapter. This Chapter shall not apply to RMDs that have already been permitted in the City and are not seeking licensure as a Cannabis Retail Store for retail cannabis sales prior to the effective date of this ordinance (“Existing RMD”).