Cannabis dispensary association drops suit over marijuana delivery rules

Stung by an exodus of members since it filed suit to block new cannabis industry rules permitting home delivery, the business group that represents most of the state’s brick-and-mortar marijuana shops announced Monday morning that it is dropping the legal challenge.

The Commonwealth Dispensary Association and its attorneys from Foley Hoag argued in a suit that the new delivery-only license types created by the Cannabis Control Commission violated the state’s marijuana law, which they said 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 when it filed its suit earlier this month.

The lawsuit was seen by some as an attack on the disadvantaged entrepreneurs and small businesses that the CCC’s new delivery model was intended to help and a number of retailers publicly broke from the CDA as news of the suit spread. Delivery-only licenses with the ability to buy marijuana wholesale will be available exclusively to participants in the CCC’s social equity program and economic empowerment applicants for the first three years.

“We are leaving because of our belief in creating economic opportunity for social equity applicants,” Cultivate, which has shops in Leicester and Framingham and was one of the first two non-medical retailers to open in the state, said. New England Treatment Access, one of the state’s largest marijuana firms with shops in Northampton and Brookline, and about 10 other companies also left the CDA in recent days, the Boston Globe reported.

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 delivery-only licenses will help level the playing field between large corporations and small businesses because the barriers to entry for delivery are less burdensome than those for retail licenses.

The CDA said the “difficult decision” to sue the CCC over the delivery rules was “supported by the vast majority of members” and “reflected our concerns on the negative impact these regulatory changes might have on the industry as a whole.” Still, CDA leaders said they decided “it is in the best interest of the industry and our members to drop the lawsuit.”

“We all need to be working together on achieving our many shared objectives, including increasing the participation of a diverse set of entrepreneurs in the industry,” the group said as it pledged to work with groups like the Massachusetts Cannabis Association for Delivery (MCAD).

Christopher Fevry, co-founder of Your Green Package and president of MCAD, said his organization was glad that the CDA dropped its suit, but said it’s not enough unless established and well-capitalized companies are willing to take tangible steps towards a more equitable and fair cannabis industry in Massachusetts.

“This represents an opportunity for all stakeholders to come to the table and have a meaningful conversation about how we can create cannabis equity,” Fevry said. He said a dialogue between his organization and some businesses is already underway.

It was no surprise earlier this month when the CDA lodged its suit against the CCC in Suffolk Superior Court. The organization opposed the commission’s regulations while they were in development last year and put out a statement after the CCC voted to adopt the regulations declaring that “this will not be the final word on delivery” and that the CDA was “prepared to contest the matter to ensure that policy continues to adhere to the statute and that the market is not upended.”

Grant Smith, an advocate who organized a Facebook boycott of the CDA and worked with others to ramp up pressure against the CDA, said the quick pivot from the CDA shows “just how powerful of a force” the cannabis activist community can be.

“I am beyond grateful to all those groups and individuals who were willing to stand up for what they believe in related to this issue, in spite of the dangers and pressures, as that is the basis of all human morality,” he said. “Make no mistake though, even in the press release announcing the end of the lawsuit ... the CDA decided to take a parting shot at the equity delivery model, yet again, because that model threatens the profits of non-equity owned retailers. That is the very same mentality that drove the CDA to attack the equity delivery model in front of the CCC and by way of this now defunct lawsuit, and it is crucial that such avarice not rear its head again going forward.”

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