Bill HD.3588

HOUSE DOCKET, NO. 3588 FILED ON: 1/17/2025

HOUSE . . . . . . . . . . . . . . . No.

[Pin Slip]

The Commonwealth of Massachusetts

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In the One Hundred and Ninety-Fourth General Court
(2025-2026)

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An Act for cannabis market modernization.

Be it enacted by the Senate and House of Representatives in General Court assembled, and by the authority of the same, as follows:

Whereas, the cannabis industry has changed more rapidly than the regulatory framework governing the Massachusetts marketplace anticipated;

Whereas, more than a dozen marijuana retailers, medical marijuana dispensaries and marijuana cultivators went out of business in 2024, causing a loss of jobs and tax revenue in the Commonwealth;

Whereas, there is an impending threat of many more cannabis business closures in areas disproportionately impacted by cannabis criminalization, leaving businesses and low-income individuals employed bearing the brunt of regulations that are not commensurate with public safety, employee safety, or consumer needs;

Whereas, many social equity businesses are deprived by law of the most important incident of small business ownership: the ability to profit from the sale of the business and realize a return on investment;

Whereas, the appearance of hemp-derived THC intoxicating products on the shelves of package stores and gas stations created the greatest external threat to the existing regulated marketplace;

Whereas, a small, but significant number of cannabis businesses are in default of payment obligations, leaving a receivables crisis for many cannabis suppliers;

Whereas, the Cannabis Control Commission in its current structure has been beset by dysfunction and a lack of accountability; and

Whereas, reforms are needed to create a more stable and equitable cannabis industry in the Commonwealth.

SECTION 1. Section 1 of chapter 94G of the General Laws, as so appearing, is hereby amended by inserting as new definitions:-

“Agent registration card”, the identification card currently and validly issued by the commission to a marijuana establishment or laboratory employee or agent, but not to a licensee, which shall entitle the holder to perform services marijuana establishments or laboratories.

SECTION 2. Section 1 of chapter 94G of the General Laws, as so appearing, is hereby amended by inserting after the definition of “Mycotoxin” the following definitions:-

“Person or Entity Having Direct Control”, any person or entity having direct control over the operations of a marijuana establishment, which satisfies one or more of the following criteria:

(a) An owner;

(b) A person or entity that possesses a voting interest of 25 percent or greater in a marijuana establishment;

(d) A person or entity that has the right to control or authority, through contract or otherwise including, but not limited to: (1) To appoint more than 50% of the directors or their equivalent; (2) To appoint or remove corporate-level officers or their equivalent; or (3) To earn 25 percent or more of the profits or collect more than 25 percent of the dividends.

(e) A court appointee or assignee pursuant to an agreement for a general assignment or assignment for the benefit of creditors; or

(f) A third-party technology platform provider that possesses any financial interest in a marijuana delivery licensee including, but not limited to, a delivery agreement or other agreement for services.

“Person or Entity Having Indirect Control”, any person or entity having indirect control over operations of a marijuana establishment. It specifically includes any person or entity having direct control over 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.

SECTION 3. Section 1 of chapter 94G of the General Laws, as so appearing, is hereby amended by inserting after the definition of “Production batch” the following definition:-

“Owner”, any person or entity owning directly or indirectly through parent or holding company, or otherwise, 25 percent or more of the interest in a licensee.

SECTION 4. Section 4 of chapter 94G subsection (a1/2)(xxix), as so appearing, is hereby amended by inserting in subsection (a1/2)(xxix)(6) after the word “marijuana” the following words:-

provided that the commission shall not prohibit advertising, marketing and branding of sales, discounts, and customer loyalty programs within a Marijuana Establishment, through a Delivery service, on an internet website maintained by a Marijuana Establishment, or through an opt-in email marketing campaign;

SECTION 5. Section 4 of chapter 94G, as so appearing, is hereby amended by inserting after paragraph (6) of subsection (c) the following paragraph:-

(7) require a marijuana retailer to check identification of any consumer or patient at any location except the point of sale.

SECTION 6. Section 6 of chapter 94G, as so appearing, is hereby amended by adding after the word “Laws” as so appearing in subsection (b) the following words:-

provided that the commission shall not renew and shall not grant any extension of the license’s expiration date to any applicant for renewal that has not provided a certificate of good standing and tax compliance from the department of revenue dated on or before the date of expiration of the license. The commission shall suspend or revoke the license of any applicant for renewal who fails to comply with this section pursuant to section 4 of this chapter.

SECTION 7. Section 7 of chapter 94G, as so appearing, is hereby amended by striking paragraph 1 of subsection (a) and inserting in place thereof the following words:-

(1) possessing, using, purchasing, processing and/or manufacturing not more than the 2 ounce equivalency of marijuana, marijuana concentrate, edible, beverage, and other ingestible products combined; ;

SECTION 8. Section 12 of chapter 94G, as so appearing, is hereby amended by inserting the following subsections:-

(i)(1) Any employee, agent, volunteer or other person required by the regulations promulgated pursuant to section 4 shall register with the commission prior to engaging in any on-site services to a marijuana establishment or laboratory related to the cultivation, harvesting, preparation, packaging, storage, testing or dispensing of marijuana. The commission shall issue a single agent registration card to an individual, which agent registration card shall entitle the holder to provide such services at one or more marijuana establishments or laboratories. An agent registration card shall be valid for seven years from the date of issuance. A licensee shall verify the validity of the agent registration cards, but shall not be required to obtain agent registration cards on behalf of its employees, agents, volunteers or other persons required by the regulations promulgated pursuant to section 4.

(2) The commission shall not require a fee for agent registration card requests made by a verified employee of any social equity businesses.

SECTION 9. Section 15 of chapter 94G, as so appearing, is hereby amended by inserting in the first sentence of subsection (a) paragraph (1) after the word “resources” the following words:- provided that the commission shall not require sampling of any batch of marijuana less than 40 pounds.

SECTION 10. Section 16 of chapter 94G of the General Laws is hereby amended by striking out the existing language in its entirety and inserting in place thereof the following section:-

Section 16. (a) No Person or Entity having Direct or Indirect Control may become a licensee or Person or Entity having Direct or Indirect Control of more than 9 marijuana retailers, 3 medical marijuana treatment center licenses, 3 marijuana product manufacturer licenses and 3 marijuana cultivator licenses, provided further that the commission shall not grant any license where such licensee or Person or Entity having Direct or Indirect Control would become a licensee or Person or Entity having Direct or Indirect Control of four or more marijuana retailers through the application for a new license. A licensee or Person or Entity having Direct or Indirect Control may only become a licensee or Person or Entity having Direct or Indirect Control of four or more marijuana retailers through a change of ownership or control request of a marijuana retailer license in good standing with the commission on the effective date of this section;

SECTION 11. Chapter 94G, as so appearing, is hereby further amended by adding the following sections:-

Section 23. (a) Notwithstanding section 4(a)(x) and section 5 of this chapter, or any other general or special law, rule, regulation, or order to the contrary, from the effective date of this section until 180 days after the publication of the report Joint Committee on Cannabis Policy of the General Court pursuant to subsection (b), the commission shall not issue any marijuana retailer, marijuana cultivator or marijuana product manufacturer license to any person, except through the grant of an application for change of ownership or control, unless such person has submitted a marijuana establishment license application that has been deemed complete by the commission prior to the effective date of this section or unless such person is a participant in the social equity program established by section 22 of this chapter.

(b) The Joint Committee on Cannabis Policy of the General Court shall conduct and publish a study analyzing the profitability and economic health of businesses licensed under this chapter. The study shall analyze the appropriate number of licenses to be licensed under this chapter, the adequacy of cannabis supply for patients and consumers, or whether an oversupply harms market participants, and the adequacy of the commission’s enforcement of its regulations with respect to cultivation tiers.

SECTION 12. Chapter 94G, as so appearing, is hereby further amended by adding the following sections:-

Section 24. (a) As used in sections 23-24, the following words shall, unless the context clearly requires otherwise, have the following meanings:-

“Artificially derived”, the creation of a chemical substance by a chemical reaction that changes the molecular structure of any chemical substance.

“Cannabidiol (CBD)” means a nonpsychoactive cannabinoid found in the cannabis sativa plant. CBD has the formula C21H30O2 and chemical structure, inclusive of stereochemical variations. CBD is not tetrahydrocannabinol.

“Cannabinoids” means compounds structurally defined as a diverse class of C21 or C22 terpenophenolic compounds found in Cannabis sativa L., their carboxylic acids, analogs, and transformation products. Cannabinoids, for the purposes of this chapter, shall include structurally unrelated cannabimimetic compounds. The main cannabinoids found in cannabis plants are Tetrahydrocannabinol (THC) and Cannabidiol (CBD). In addition to THC and CBD, there are more than 100 cannabinoids that could be identified.

“Cannabimimetic”, a compound that is not structurally a cannabinoid, but which can elicit a biological response similar to those produced by cannabinoids by acting directly or indirectly on cannabinoid receptors in the body.

“Delta-8-tetrahydrocannabinol (Delta-8-THC)”, a psychoactive cannabinoid compound found in the Cannabis sativa plant, but does not occur in naturally significant amounts. It has the chemical formula C21H30O2 and the chemical structure inclusive of stereochemical variations.

“Delta-9-tetrahydrocannabinol (Delta-9-THC)”, a psychoactive cannabinoid compound found in the Cannabis sativa plant, and the primary psychoactive compound found in marijuana. Delta-9 THC has the formula C21H30O2 and the chemical structure inclusive of stereochemical variations.

“Dry weight basis”, a method of determining the percentage of a chemical in a substance after removing the moisture from the substance. The ratio of the amount of moisture in a sample to the amount of dry solid in a sample.

“Decarboxylation”, a process of treating a cannabis material or product to remove carboxyl groups from the cannabinoids native in the plant, to form transformation products such as THC and CBD. Decarboxylation is commonly accomplished by application of heat. Decarboxylation is not considered a synthetic process.

“Hemp-derived cannabinoid product”, a product derived from hemp intended for human consumption, by means including, but not limited to ingestion, injection or inhalation, that contains more than .5 milligrams of total tetrahydrocannabinol (THC) per any serving or other individual unit, and 2.5 milligrams per multi-serving package, container, or packages or containers sold as a single unit.

“Intoxicating tetrahydrocannabinols”, naturally occurring, synthetically derived, artificially derived, isomerized, or synthetically converted tetrahydrocannabinols which, when consumed, have the potential to induce disturbances in nervous system function and may result in changes in cognition, perception, judgement, mood, consciousness, or behavior, that resolve with time.

“Isomers”, molecules or polyatomic ions with identical molecular formulae (i.e., the same number of atoms of each element) but distinct arrangements of atoms in space.

“Isomerization”, is the process in which a molecule, polyatomic ion or molecular fragment is transformed into an isomer with a different chemical structure.

“Tetrahydrocannabinol (THC)”, (i) all naturally, synthetically or artificially derived tetrahydrocannabinols, or any structural, optical or geometric isomers or analogs of tetrahydrocannabinols, which include but are not limited to, Delta-1 tetrahydrocannabinol; Delta-6 tetrahydrocannabinol; Delta 3,4 tetrahydrocannabinol; Delta-8 tetrahydrocannabinol; Delta-9 tetrahydrocannabinol; Delta-10 tetrahydrocannabinol, Delta-11 tetrahydrocannabinol; (ii) any other intoxicating tetrahydrocannabinols, (iii) any other naturally or artificially derived cannabinoid that has an intoxicating or psychoactive effect; and (iv) any other chemically similar compound, substance, derivative, or isomer of tetrahydrocannabinol.

“Tetrahydrocannabiolic acid (THCA)”, a naturally occurring cannabinoid compound found in the cannabis sativa plant. THCA is the precursor to THC through decarboxylation. THCA has the chemical formula C22H30O4.

(b) No person may engage in the sale or transfer of hemp-derived cannabinoid products or Tetrahydrocannabiolic acid (THCA) without receiving an intoxicating hemp endorsement from the commission. The commission shall impose and collect fees pursuant to section 4 for intoxicating hemp endorsements.

(c) The commission shall promulgate any necessary regulations to implement this section within 90 days of the effective date.

(d) This section shall not be construed to prevent the cultivation and production of hemp pursuant to sections 116-123 of chapter 128 of the General Laws, or to prevent the interstate transportation of hemp or hemp-derived products in compliance with federal law.

Section 24. Whoever violates section 23(b) shall be punished by imprisonment for not more than 1 year in the house of correction or by a fine of not more than $25,000 per day, or by both such fine and imprisonment.

SECTION 13. Chapter 94G of the General Laws, as so appearing, is hereby amended by inserting after section 24 the following section:-

Section 25. It shall be unlawful for any licensee under this chapter to receive credit, directly or indirectly, for marijuana or marijuana products sold or delivered to any licensee engaged in the sale of marijuana or marijuana products for a period of not more than sixty days. Nothing in this chapter shall require any licensee to extend credit to any other licensee. The credit period shall be calculated from the date of the delivery of the marijuana or marijuana products to the purchasing licensee to the date when the purchasing licensee discharges in full the indebtedness for which the credit was extended. If any licensee does not discharge in full any such indebtedness within such sixty day period, the indebtedness shall be overdue and such licensee shall be delinquent within the meaning of this section. Within three days after a licensee becomes delinquent, the licensee who extended the credit shall mail a letter of notice by certified mail to the commission and a copy thereof to the delinquent licensee. The notice shall contain the name of the delinquent licensee, the date of delivery of the marijuana and marijuana products, the amount of the indebtedness remaining undischarged, and all available proof of the indebtedness and delinquency. Within five days after receipt of such a letter of notice, the commission shall post on its website the name and address only of the delinquent licensee in a complete and current delinquent list containing the names and addresses of all delinquent licensees. Such posting shall constitute notice to all licensees of the delinquency of such licensee.

If a licensee is seriously damaged in his business by riot, insurrection, civil disturbance, fire, explosion or by an act of God, so-called, the licensee may file an application with the commission requesting that the provisions of the first paragraph of this section be suspended as to him for a reasonable period. The commission shall set down the application for hearing within twenty-one days and shall notify all licensees engaged in selling to said applicant of the hearing and give all interested parties the right to be heard. Pending such hearing, the commission may, after an investigation and determination that the facts as stated by the licensee in his application would constitute reasonable grounds for relief, order that such licensee shall not be posted as delinquent. If the commission finds it is in the public interest to do so, it may suspend the application of said first paragraph with respect to the applicant for such period as it may consider to be reasonable and in the public interest. Such action shall not deprive licensees of all legal rights available to them for the collection of the indebtedness and shall be contingent on such terms and conditions as the commission shall determine.

No licensee under this chapter shall sell or deliver, directly or indirectly, marijuana or marijuana products to a licensee whose name is posted on the delinquent list, except for payment in cash on or before delivery, and no licensee who is posted on the delinquent list shall purchase or accept delivery of any marijuana or marijuana products except for payment in cash on or before delivery.

The commission shall not authorize a change of ownership or control of a licensee on the delinquent list until all delinquencies are satisfied and the commission has removed the licensee from the delinquent list under this section, except for approval of court-appointed receivers or trustees under a voluntary assignment for the benefit of creditors, provided that prior approval of such assignment is obtained from the commission after notice to all creditors has been given and reasonable time allowed for objections by all creditors.

Upon full discharge of the indebtedness for which a licensee was posted, the licensee who filed the letter of notice of delinquency shall, within twenty-four hours thereafter, notify the commission, by mailing a letter by certified mail addressed to the commission of the discharge of the indebtedness. The commission shall immediately strike the name of the delinquent licensee from the list.

Notwithstanding and in lieu of any other penalty in any other provision of this chapter, any person who violates any provision of this section shall be punished by a fine of not more than five thousand dollars.

The provisions of this section shall apply to all credit extended after April the first, two thousand and twenty.

The commission shall promulgate any necessary regulations to implement this section within 90 days of the effective date.

SECTION 14. Chapter 128 of the General Laws, as so appearing, is hereby amended by inserting after section 124 the following section:-

Section 125. The attorney general may make a complaint or seek indictment against any person for the sale of hemp or hemp-derived products that are not approved for use, ingestion, or inhalation by consumers by the Department and the Department of Public Health where such person does not hold a license authorizing the sale of such hemp or hemp-derived products from the Department or the Cannabis Control Commission. Any person, 90 days after the filing of a complaint with the attorney general, or sooner if the attorney general assents in writing, and within 3 years after the sale of hemp or hemp-derived products, may institute and prosecute in his own name and on his own behalf, or for others similarly situated, a civil action for injunctive relief to enjoin the sale of such hemp or hemp-derived products and any other relief the court may deem just and equitable. Any person instituting such action shall be deemed aggrieved and jurisdiction for such action shall lie in the superior court department whether or not the person has suffered monetary damages. Any person who prevails in such an action shall be awarded treble damages, if any, the costs of the litigation and reasonable attorneys' fees.

Name:	District/Address:	Date Added:
Meghan K. Kilcoyne	12th Worcester	1/16/2025