Cannabis Control Commission Approves Local Equity Company Rolling Releaf For State's First Delivery Operator Pre-Certification

Today the Massachusetts Cannabis Control Commission (CCC) approved its first "Pre-Certification" for the newly created Delivery Operator license type, with local equity applicant Devin Alexander taking to social media to announce that his company, Rolling Releaf, had received formal approval for the status from the Agency.

The Pre-Certification process, unique to Massachusetts and the brain-child of former Cannabis Control Commissioner Shaleen Title, allows applicants seeking either type of delivery license (Cannabis Courier or Delivery Operator) to obtain an early sign-off from Commission staff before moving to the Provisional License stage of their application.

That early certification, in turn, aims to make it easier for delivery applicants -- all of whom, for at least the first three years, must be participants in the state's Social Equity (SE) or Economic Empowerment (EE) programs -- to locate property, raise capital resources and quickly obtain support from local host communities (who must sign a Host Community Agreement (HCA) with a company before a state-level license can be obtained).

Alexander also made history as the first Delivery Operator applicant to receive that local HCA from the town of Middleborough. As of now, there are five such HCA's issued to Delivery Operators statewide (with three of those HCA's belonging to Black-owned companies).

According to Commission data released last month, 91 Delivery Operator Pre-Certification applications have been opened, with 31 of those packets having been deemed fully submitted by CCC staff.

Speaking after the news was announced, Alexander told me that today's approval marks an important step on the journey towards making Rolling Releaf a reality; "The Pre-Certification is basically the equivalent of getting pre- approved for a Mortgage. It is meant to ease the process of obtaining Real Estate, Investors and a Host Community Agreement. We are now ready to obtain a Provisional License and look forward to the next part of this Marathon like process."

The new Delivery Operator license, including that three year period during which only participants in the state's Social Equity or Economic Empowerment programs may seek the license, was created in the summer of 2020 following a contentious series of public hearings in front of the state's Cannabis Control Commission. At the time, equity advocates (including Alexander, who is the Vice President of the Massachusetts Cannabis Association For Delivery) fought toe to toe with some of the most well funded companies in the entire state and came out victorious, having created the new license type despite a flurry of last minute objections from those wealthy brick and mortar retail operators.

Initially, in the summer of 2019, Commissioners had envisioned only an "Uber eats-style" model for the delivery of cannabis products; delivery companies under that model -- which still exists today as the "cannabis courier license type" -- could own a fleet of vehicles, pick up orders at retail price from existing brick and mortar retailers and then deliver indivudal orders to consumers (with the delivery company making their money on the delivery charge for each order).

That model began operations last week, with two companies (We Can Deliver Boston and Your Green Package) leading the roll out of the retailer-centric license.

The Delivery Operator license type, on the other hand, will allow equity delivery companies to own their own warehouse and vault, buy products from other manufacturers and cultivators, and deliver those products directly to consumers following an online sale.

That Delivery Operator license structure so threatened existing brick and mortar retailers, apparently, that a trade group representing such operators (the Commonwealth Dispensary Association, or CDA), filed suit against the equity delivery operator rules in January of 2021 - telling a judge that the retailers wanted not only the Delivery Operator license invalided, but the three year equity priority period as well (in short telling the judge that the group felt only existing brick and mortar retailers should have been able to conduct deliveries).

That lawsuit, however, was ill-fated. Within less than a week of the initial filing with the Court, the lawsuit was withdrawn by the CDA following a community-lead boycott of the group (leading 12 of its 40 or so members to resign in protest within just 4 days). As a result, both the Delivery Operator license and the three year equity priority period were able to move forward without any delay.

Applicants like Alexander hope that, with so many hurdles cleared to reach this point in the process, the wait for provisional (and then final) licensure will pass quickly.

With nearly 141 operational retailers, and the potential of 91 - or more - Delivery Operators, customers in the Commonwealth may be presented with a slew of new purchase options for adult use cannabis in the next 12 months.

That increase in purchase options, however, will also need to dovetail with a rapid increase in the rate of approvals for cultivation licenses (to ensure that existing cultivators do not create a functional market oligopoly in order to drive down quality while driving up price). Currently, 47 or so cultivation licenses (that would double the state's flower canopy) have obtained provisional licensure but must now go through the exhaustive process to bring those locations to the point where a final license can be secured (something that is far more difficult for a cultivation license as opposed to the other license types, for a number of reasons).

Resources:

Cannabis Control Commission Delivery FAQ: https://masscannabiscontrol.com/applicants-licensees/frequently-asked-questions/#delivery

My video overview of that new Delivery FAQ: https://www.facebook.com/100009397287681/videos/2973145166342030