State inspector board urges receiver to helm floundering Cannabis Control Commission
Inspector General Urges Receivership for Massachusetts Cannabis Control Commission Amid Governance Turmoil.
In recommending that the state Legislature place the Cannabis Control Commission into receivership, the Inspector General of Massachusetts told House members Tuesday that a flaw in the statute defining the roles of the executive director and the chairperson of the five-member commission could be the root cause of the ongoing turmoil roiling the CCC.
The flaw, as pointed out by Inspector General Jeffrey Shapiro, assigns almost identical responsibilities to both positions.
According to the statute, the chair of the CCC “shall have and exercise supervision and control over all the affairs of the commission. The executive director shall be the executive and administrative head if the commission and shall be responsible for administering and enforcing the law relative to the commission and to each administrative unit thereof.”
“It’s not about personalities,” Shapiro told the members of the House attending the information session called by Rep. Dan Donahue, D-Worcester, one of the chairpersons of the Joint Committee on Cannabis Policy. Only House members attended the morning session.
“Appointees come and go, the problems continue,” Shapiro said. Shapiro sent a letter to the legislators, Gov. Maura Healey and other constitutional officers June 18 to suggest immediate action after spending several months investigating the workings of the commission.
Shapiro suggested that appointing an overseer to run the agency, which regulates the state’s now $7 billion cannabis industry, will afford lawmakers time to review the problem and create a legislative fix. Shapiro suggested lawmakers act before the current legislative session ends to ensure the agency operates smoothly through the coming election cycle and new session.
Legislators balked at the suggestion, suggesting it was a “nuclear” option. However, Shapiro assured the lawmakers that municipal bodies have been placed in receivership in the past, and the lawmakers could decide how to proceed with the commission once they have the luxury of time.
The suggestion comes on the heels of the monthslong investigation and a letter sent by bicameral and bipartisan legislators to the Joint Commission on Cannabis Policy last fall requesting oversight by the state inspector general.
Since its formation in 2017 with the legalization of recreational-use marijuana, the CCC has seen the abrupt resignation of its chairman months before the expiration of his term. A second chair was suspended with pay in September and has since sued the commission and her appointing authority for relief.
The executive director went on paternity leave, then left, and the commission itself has waffled on who would sit as chairperson with the unfilled vacancy.
While concerned with his overall findings compiled over several months, Shapiro told the legislators that he was prompted to action when the four remaining commissioners stripped the interim executive director of power in order to focus on filling more than 20 vacancies in the agency, including an opening for executive director.
In her response to the June letter from Shapiro, Acting Commission Chair Ava Callender Concepcion assured the legislative leadership that the agency is a national trailblazer, regulates a $7 billion industry and brings in $322 million in tax revenue. She states that what is missing from the public discourse is the “commission’s remarkable success.”
Callender Concepcion points to the new regulations promoting equity “in our industry. At great effort, and on a short timeline, we developed regulations and implemented landmark legislation expanding opportunities for social equity businesses.”
While Shapiro acknowledged the agency regulates a $7 billion industry, he questioned whether the industry could have been more robust if the CCC had not been occupied with the inner turmoil and what legislators called a “power grab” over the course of its existence.
Shapiro called out the lengthy wait times for application reviews, which can take a year or more, wait times for enforcements and the lag between enacted changes in legislation and implementation of new laws.
“The length of time to review an application can have a financial impact on applicants, to find an appropriate location, in the right zone, with the right setbacks, and to hold that storefront for more than a year, sometimes almost two years,” he said. “I don’t believe it should be like that.”
Pointedly, Shapiro also discussed the change in rules for delivery services, a sector of the industry reserved for social equity applicants. A regulation requiring deliveries be made by a tandem team was nixed last fall and has yet to be implemented.
“Why should the state put the CCC in receivership now?” Shapiro asked rhetorically, answering that without changes to the statute, which can only be accomplished by lawmakers, the success of the agency is at stake. “The same problems will be repeated time after time.”
Shapiro also reiterated the mission of the agency — to ameliorate the damage caused by the U.S. War on Drugs and excesses of the carcel state and justice system on communities of color and to those lacking opportunities to exit poverty.
“There are issues that impede the Cannabis Control Commission from carrying out its mission,” Shapiro said. Inner turmoil, as well as the obsession with governance and creating an operational charter, have interfered with the agency’s mission, Shapiro contends, pointing out that the group has spent $160,000 and countless hours in executive session for mediation purposes to hammer out a governing document.
And Shapiro questions whether incoming employees and commissioners would be bound by that document.
“It could not be binding on anyone except those that sign it at that moment,” Shapiro said.
In her letter, Callender Concepcion also questioned Shapiro’s authority for requesting certain documents dating back to the inception of the agency and bridled at the investigators’ line of questioning of staff. While she recognized his statutory mandate to act to prevent and detect fraud, waste and abuse on the expenditure of public funds, she lodged a complaint that investigators were overstepping statutory authority.
“Most importantly,” Callender Concepcion added, “the OIG appeared to step into the exclusive purview of the Legislature, regarding the structure of the commission.”
Rep. Michael Soter, R-Bellingham, praised the analysis offered by Shapiro and suggesting the CCC was running like the “Wild West.” He suggested the commission was “spitting in the eye” of legislators and “want to do things by their own rules.”
Legislators discussed other state agencies with similar governing structures that don’t appear to have similar problems.
Shapiro said the CCC continues to suggest that he lacks the authority to pursue an investigation into the agency.
Rep. Aaron Saunders, D-Belchertown, was firm in his opinion that Shapiro has a statutory obligation to perform the investigation and inform the Legislature of his findings.
“The CCC has a duty to cooperate,” Saunders said, adding he hopes the agency gets the message “loud and clear,” that it is obliged to acquiesce to requests for information.
Rep. Donald Berthiaume, R-Spencer, said the investigation and hearing was “long overdue.” He discussed his displeasure with the CCC, the length of time to review applications and complete final inspections, and even instances of bullying by inspectors of cannabis workers.
“It can take two years to get final inspections. They almost put people out of business before a store is even open,” Berthiaume said. “I’ve heard many stories like that.”
