Massachusetts maps profit-focused plan for cannabis consumption sites

Massachusetts cannabis regulators are looking past basic consumption lounges, planning for brewery-style tasting rooms at cultivation sites and cannabis-friendly entertainment venues as part of the state’s social use program, according to its chief regulator.

The Cannabis Control Commission is preparing to release draft regulations for public comment following a framework announcement earlier this month. According to Bruce Stebbins, the commission’s acting chair, the commission plans to discuss a “red line version” of the regulations at its upcoming Tuesday meeting.

“First and foremost for the commission is whatever regulatory framework we end up adopting is going to focus on public health and safety,” Stebbins told Green Market Report last week.

The framework includes supplemental licenses for existing cannabis businesses, hospitality licenses for standalone venues, and event organizer permits. The supplemental license follows what other jurisdictions are using, where “you or I walk into a dispensary, we buy some product, we go into an adjoining” space, Stebbins explained. He added that cultivation facilities could offer experiences “similar to going to a brewery, you could sit in a tasting room.”

Event organizers would be able to host outdoor gatherings “with a number of vendors in music and food and engagement activities,” Stebbins said, noting this license type offers “a space for kind of a low startup cost for the event organizer licensee.” The program is exclusive to social equity participants, economic empowerment applicants, micro businesses and craft marijuana cooperatives.

The commission’s proposed rules would require venues to serve food—a mandate based on research showing it can slow THC absorption. The rules would also allow cannabis lounges to partner with neighboring restaurants for meal service, potentially helping both sectors boost revenue.

“We know that there are people out there that want to do infused dinners,” Stebbins said. “As we thought about food, we’re also thinking about what allowances do we want to make for different types of activities to happen within a consumption lounge.”

“I’m thinking also from the ROI – if I’m going to build out this space, how do I make it profitable? How do I make it a place to come with friends where there’s engagement activities going on?”

Stebbins sees opportunities for cross-business partnerships, particularly with the restaurant industry.

“You don’t have to serve the food yourself. You might be able to partner with an adjacent restaurant or somebody else,” he noted, adding “I’m a big economic development guy, so I always like looking at what are the cross-business opportunities that can help expand and grow the local economy.”

The commission is particularly focused on ensuring financial viability for operators, having learned from previous challenges with the state’s delivery program.

“We learned a lot creating the delivery license types and hearing from the industry that the delivery courier model was financially potentially a struggle,” Stebbins said.

Eight municipalities have expressed early interest in allowing consumption sites. Local communities must opt-in through ordinance changes or voter referendums before venues can open.

“I look at this reg process as start of a conversation,” Stebbins said. “We have a lot of questions. We don’t necessarily have all the answers, and this set of regulations and the promulgation process we’re going to go through is going to give us that feedback to see if our interests are aligned with the industry and they feel that they can create a compliant and successful business opportunity out of it.”