Massachusetts Marijuana Retailer License Application

Applying for a Massachusetts Marijuana Retailer License is the first step any cannabis entrepreneur that resides in the bay state should take care of if they want to open a dispensary.

The Cannabis Control Commission (CCC) is responsible for promulgating regulations relating to marijuana, processing business applications and issuing licenses, and creating policies and procedures which “promote and encourage full participation in the regulated marijuana industry by people from communities that have previously been disproportionately harmed by marijuana prohibition and enforcement and to positively impact those communities.

According to the latest legislation, a Massachusetts Marijuana Retailer License is a legal document which authorizes entities to purchase and deliver marijuana and marijuana products from Marijuana Establishments and to sell or otherwise transfer marijuana and marijuana products to Marijuana Establishments and to consumers.

According to the CCC, similar to marijuana for medical use, edible marijuana products for adult use shall not be considered food and therefore Marijuana Retailers would not be subject to inspection by local Boards of Health under 105 CMR 590 unless local regulations requiring such inspections are promulgated.

A Marijuana Retailer provides a retail location which may be accessed by consumers 21 years of age or older or, if the retailer is co-located with a RMD by individuals who are registered qualifying patients with the Medical Use of Marijuana Program with a registration card.

How to apply for a Massachusetts Marijuana Retailer License

The first step to applying for a Massachusetts Marijuana Retailer License is to submit the license application fee and all three (3) sections of the application:

• Application of Intent,
• Background Check, and
• Management and Operations Profile.

Each section requires applicants to provide accurate information about the business, individuals and entities associated with the business and to demonstrate understanding of, and plans to comply with, the Commission’s regulations that are specific to the applicant’s license type, location, and scale. The adult- and medical-use license applications have essentially the same requirements with differences highlighted in the following sections.

In order to submit these sections, you’d need to create an account in MassCIPortal’s webpage and log into the portal, navigate through the page and start the application virtually.

Application of Intent

The Application of Intent (AOI) requires the applicant to disclose Persons or Entities Having Direct or Indirect Control in their application for licensure. Persons or Entities Having Indirect Control means any person or entity having indirect control over operations of a ME or MTC. It specifically includes any person with a controlling interest in an indirect holding or parent company of the applicant, and the chief executive officer and executive director of those companies, or any person or entity in a position indirectly to control the decision-making of a Marijuana Establishment (ME) or a Marijuana Treatment Center (MTC).

Applicants are encouraged to include individuals that exert control through the contribution of services. For example, an individual may exert control by making decisions about the establishment management or operations. Applicants do not need to disclose individuals who provide services and do not exert control. For example, applicants do not need to disclose consultants who consult but do not make decisions for the establishment.

In this phase, all applicants would have to disclose and submit the following:

• In-State Interests
• Out-of-State Interests
• Capital Resources
• Bond or Escrow
• Property Identification and Interest Documentation
• Host Community Agreement Certification
• Community Outreach Meeting Attestation and Documentation
• Plan to Remain Compliant with Local Ordinance
• Plan to Positively Impact Disproportionately Harmed People
• Application Fee

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Background Check

In this phase of the Massachusetts Cannabis License Application, all applicants must list all relevant individuals and entities along with all background disclosures and authorization forms. Each individual or entity listed in the Applicant of Intent section shall also be listed in the Background Check section. Individuals and entities will undergo an in-depth background check and individuals will submit to fingerprinting checks. 

The Commission is required to make a determination of suitability for licensure for each individual and entity listed on an application, which is based, in part on the background checks. Background checks will include, but not be limited to, a review of the following:

• Massachusetts’ and national criminal database records; 
• Massachusetts’ and national civil database records, including professional and occupational records; 
• The individual and entity’s involvement in other marijuana-related businesses; and
• Any actions taken against any license or registration held by the individual or entity. 
• Further, all applicants will be required to disclose the following information:
• A description of any criminal action, whether felony or misdemeanor, that resulted in a conviction, guilty plea, plea of nolo contendere, or admission to sufficient facts; 
• A description of any civil action, including actions related to a professional, occupational, or fraudulent practice; 
• A description of any administrative action, including actions related to a medical- or adult-use marijuana operation; 
• A description of any disciplinary action taken in any jurisdiction against a license, registration, or certification held by the individual or entity, such as a suspension or revocation, including, but not limited to, a license to prescribe or distribute controlled substances; and 
• A description of any license denial.

Applicants are not required to provide information about any conviction that has been sealed or expunged by court order.

Management and Operations Profile 

The information required as part of this section is an indicator that the applicant understands the legal requirements to operate an ME, including the Commission’s regulations, has plans that are specific to the applicant’s license type, location and scale. and will be able to operate in a lawful manner.

In order to comply with this phase of the Massachusetts Cannabis License application, all applicants would need to provide the following:

• Business Information, Articles of Organization, and Bylaws
• Certificates of Good Standing
• Business Plan, Liability Insurance Plan, & Proposed Timeline
• Summary of Operating Plans, Policies, and Procedures
• Diversity Plan

Taxes on retail sales

An excise tax is hereby imposed upon the sale of marijuana or marijuana products by a marijuana retailer to anyone other than a marijuana establishment at a rate of 3.75 per cent of the total sales price received by the marijuana retailer as a consideration for the sale of marijuana or marijuana products. The excise tax shall be levied in addition to state tax imposed upon the sale of property or services as provided in section 2 of chapter 64H of the General Laws and shall be paid by a marijuana retailer to the commissioner at the time provided for filing the return required by section 16 of chapter 62C of the General Laws. 

Any city or town may impose a local sales tax upon the sale or transfer of marijuana or marijuana products by a marijuana retailer operating within the city or town to anyone other than a marijuana establishment at a rate not greater than 2 per cent of the total sales price received by the marijuana retailer as a consideration for the sale of marijuana or marijuana products. A marijuana retailer shall pay a local sales tax imposed under this section to the commissioner at the same time and in the same manner as the sales tax due to the commonwealth.

All sums received by the commissioner under this section shall not be considered received on account of the commonwealth and shall at least quarterly be distributed, credited and paid by the state treasurer upon certification of the commissioner to each city or town that has adopted this section in proportion to the amount of such sums received from the sale or transfer of marijuana and marijuana products in the city or town.

What are the costs for a Massachusetts Cannabis License?

In order to obtain a Massachusetts Cannabis Retail License, there’s no minimum amount of capital resources that must be demonstrated. In this sense. In this sense we’d recommend any ME applicant to aim for $250,000 – $1,000,000 depending on the size and scope of their operation.

Further, applicants are required to set aside, either through a bond or an escrow account, an amount of money sufficient to cover the dismantling and winding down of the Marijuana Establishment. The amount set aside must be enough to cover the cost of satisfying any outstanding state or municipal sales tax obligations, costs incurred securing the licensee’s facility, and cost incurred for destroying the marijuana and marijuana products in its inventory. 

If the applicant acquires a bond, the applicant is required to set aside the total amount of their licensing fees as set forth in 935 CMR 500.005 or 501.005, even if the fees have been waived. If the applicant establishes an escrow account, the applicant must set aside at least $5,000 and is encouraged to set aside the total amount of their licensing fees, even if the fees have been waived. 

If the applicant acquires a bond, the bond should reflect the following:

• The applicant is the Principal;
• The Commonwealth of Massachusetts Cannabis Control Commission, 2 Washington Square, Worcester, MA, 01604, is the obligee; 
• The purpose of the bond is to cover any costs incurred by the Commission to satisfy any outstanding state and local sales tax obligations, costs incurred to secure any licensed marijuana facility, costs incurred to destroy the marijuana and marijuana products in its inventory, and to cover other costs incurred by the Commission or its designee in dismantling or winding down of the licensee’s facility in accordance with its policies and governing laws. 

If the applicant establishes an escrow account, the account should reflect the following:

• The Commonwealth of Massachusetts Cannabis Control Commission, 2 Washington Square, Worcester, MA, 01604, is the sole beneficiary; and 
• The purpose of the bond is to cover any costs incurred by the Commission to satisfy any outstanding state and local sales tax obligations, costs incurred to secure any licensed marijuana facility, costs incurred to destroy the marijuana and marijuana products in its inventory, and to cover other costs incurred by the Commission or its designee in dismantling or winding down of the licensee’s facility in accordance with its policies and governing laws

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