Massachusetts Cannabis Dispensary Association Drops Delivery Lawsuit After Members Defect
An influential cannabis trade group in Massachusetts has dropped a controversial lawsuit over newly enacted home delivery rules after several of its members ended their involvement with the group.
In a statement issued on Monday, the Cannabis Dispensary Association (CDA), which represents brick and mortar marijuana retailers, said the decision to withdraw its legal challenge was “in the best interest of the industry” as well as its members.
The lawsuit, filed against the Cannabis Control Commission (CCC) on Jan. 13, sought to overturn new marijuana delivery regulations that favor social equity and economic empowerment applicants.
Under rules approved by the CCC last November, two recreational cannabis delivery license types — “marijuana couriers” and “marijuana delivery operators” — were established and made available exclusively to disenfranchised groups for a minimum of three years.
The CDA, upset that its dispensary members were being cut out, argued in its lawsuit that existing Massachusetts law granted established retailers the ability to deliver cannabis products directly to consumers.
“Because the Commission’s new delivery regulations are in direct contravention of the Commission’s enabling statute in allowing delivery but not by licensed Marijuana Retailers under their existing retail licenses, they cannot stand,” the lawsuit read.
“This is the opposite of supporting an inclusive industry,” Chris Fevry, the founder of Your Green Package and president of the Massachusetts Cannabis Association for Delivery (MCAD) said in an interview with MassLive last week.
Other groups, like Cannaclusive — a national organization that supports diversity, inclusion, and education in the cannabis industry — called for a boycott of dispensaries that did not oppose the CDA’s lawsuit.
Evidently, those calls were heard.
According to The Boston Globe’s Dan Adams, who covers the marijuana sector, Parallel-owned New England Treatment Access (NETA) was the first to exit the CDA last Friday.
"We won’t be party to things that directly conflict with our business goals and values, and that’s what this lawsuit is doing," Kim Napoli, Parallel’s director of corporate social responsibility and community affairs told Adams.
NETA’s departure triggered an exodus, as numerous companies began distancing themselves from the group over the weekend, including Garden Remedies, In Good Health, Cultivate, Sira Naturals, and Mayflower Medicinals, among others.
Major multistate operators Curaleaf and Trulieve also urged the CDA to drop the lawsuit, and TILT Holdings, which owns Commonwealth Alternative Care, said it was “extremely disappointed in the CDA’s decision to pursue litigation.”
“We spoke with leadership at the CDA and requested that they drop the lawsuit and instead reengage with the various stakeholders to identify and address the consequences associated with the current draft, as all parties will ultimately benefit from such an open dialogue,” TILT Holdings president Gary Santo said via a statement issued on Sunday evening.
The cacophony of dissent ultimately forced the CDA to reverse course, but not before the group lodged a parting shot at the diversity-minded delivery rules.
“The difficult decision to take legal action, supported by the vast majority of members, reflected our concerns on the negative impact these regulatory changes might have on the industry as a whole,” the CDA wrote. “For example, there are no limits on how many vehicles a wholesale delivery licensee can operate, which leads to the possibility of an ‘Amazon’ scale operation undermining both brick and mortar retail and smaller delivery operators.”
It’s unclear if some of the cannabis companies that exited the CDA will rejoin the group now that it has withdrawn the lawsuit.
Florida-based Trulieve applauded the CDA's decision but said it would no longer maintain its membership.
Massachusetts-based Curaleaf, the largest cannabis firm in the U.S., said it is "working with partners" to "move forward in a collaborative conversation with all parties on delivery licenses in MA."
"The best path forward must be forged by all, not some," Curaleaf wrote on Twitter.
For its part, MCAD has also pledged to work with the CDA and other stakeholders in an effort to advance the interests of social equity and economic empowerment candidates.
The CDA’s full statement is included below.
The CDA is a member driven organization with a firm commitment to building a robust cannabis marketplace which must include a level playing field and diverse representation. We have voiced strong support for increasing Social Equity and Economic Empowerment participation through efforts that directly address the greatest barrier to entry — access to capital — and will continue to advocate for new opportunities and programs that can make a difference.
The difficult decision to take legal action, supported by the vast majority of members, reflected our concerns on the negative impact these regulatory changes might have on the industry as a whole — for example, there are no limits on how many vehicles a wholesale delivery licensee can operate, which leads to the possibility of an “Amazon” scale operation undermining both brick and mortar retail and smaller delivery operators.
That being said, the CDA has determined it is in the best interest of the industry and our members to drop the lawsuit against the Cannabis Control Commission (CCC). 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.
Through numerous discussions with current members, we are confident that our membership fully supports the goal of increasing diversity of ownership and wealth generation opportunities in the Massachusetts cannabis industry; the CDA looks forward to working with organizations such as Massachusetts Cannabis Association for Delivery (MCAD) to find common ground on future topics and build a world class industry here in Massachusetts. The past several days have motivated our organization to look inwards, and outwards, to work together to create real positive change.