Retailers file suit to void delivery rules

Making good on a warning issued months ago, the organization that represents most of the state’s marijuana retailers is suing the Cannabis Control Commission to invalidate the new regulations that create a separate category of businesses allowed to deliver non-medical marijuana directly to consumers.

The Commonwealth Dispensary Association opposed the commission’s regulations while they were in development last year and last week filed suit in Suffolk Superior Court asking a judge to void the regulations. The group and its attorneys from Foley Hoag argue that the new delivery-only license types violate the state’s marijuana law, which they say gives the retailers the right to deliver cannabis under their existing licenses.

“Simply, the CCC overstepped its authority and disregarded state law, radically upending the established rules that hundreds of small businesses and their host communities operated in accordance with since 2016,” the CDA said in a statement.

The CCC declined to comment on the ongoing legal matter, but Chairman Steven Hoffman was adamant late last year that the commission was on solid legal ground if the CDA carried out its threat to sue to overturn the commission’s 3-1 vote to adopt the new industry rules.

“That’s certainly their prerogative to do so. We made what we thought was the right decision, one that we stand by,” Hoffman told reporters about the threat from the CDA immediately after the CCC approved its regulations on Nov. 30. “We’re fully prepared to defend ourselves if that happens, but that is certainly outside of my control and outside of the commission’s control.”

The CCC’S new regulations create two delivery license types: a “marijuana delivery operator” that can buy products wholesale from growers and manufacturers and sell them to their own customers, and a “marijuana courier” that can charge a fee to make deliveries from Ccc-licensed retailers and dispensaries. Advocates have argued that deliveryonly licenses will help level the playing field between large corporations and small businesses because the barriers to entry for delivery are typically far less burdensome than those for retail licenses.

But the CDA, which said it represents 70% of the marijuana companies operating in Massachusetts, argues in its suit that the state’s recreational marijuana law, Chapter 94G, “explicitly mandates that Marijuana Retailers, which are heavily regulated and consumer-facing, shall be permitted to deliver” and that the CCC is violating the law by preventing existing retailers from delivering marijuana without first paying for and obtaining a deliveryspecific license. The law defines a marijuana retailer as “an entity licensed to purchase and deliver marijuana and marijuana products from marijuana establishments and to deliver, sell or otherwise transfer marijuana and marijuana products to marijuana establishments and to consumers.”

Delivery has long been allowed as part of the state’s medical marijuana program, but home delivery has never been allowed in the non-medical side of the industry.

The CDA’S lawsuit also claims that the regulations should be voided by the court because they were not approved by at least three “lawfully seated” commissioners.

The CCC voted 3-1 on Nov. 30 to adopt the regulations, but Commissioner Shaleen Title’s initial threeyear appointment to the CCC had lapsed Sept. 1 and she continued to serve on the commission as a holdover.

Hoffman voted in favor of the delivery regulations and Commissioner Jennifer Flanagan voted in opposition after an earlier attempt to delay delivery until 2023.