Massachusetts social equity advocates call for investigation into MSO license ownership

Multistate operator Ascend Wellness (CSE: AAWH-U.CN) (OTCQX: AAWH) is facing calls for a formal investigation into its footprint in Massachusetts, where social equity advocates seized upon a media report that the company has violated state cannabis business ownership caps.

The Black Economic Council of Massachusetts (BECMA) and Equitable Opportunities Now (EON) have sent a letter to the state Cannabis Control Commission and state lawmakers, urging authorities to “immediately initiate an investigation and full review of all license ownerships” by Ascend, according to a press release.

The letter came in the wake of a report by independent journalist Grant Smith Ellis, who cited unnamed cannabis industry sources when he reported that Abner Kurtin, the executive chairman of Ascend, “owns/controls between 6-9 licenses” in Massachusetts. That, Smith Ellis noted, would be a violation of the state’s strict three-license cap per owner and could be a legal headache for Ascend.

“Considering that one of the leading voices in favor of lifting the license cap is allegedly in violation of these very limits, we urge the Cannabis Control Commission (CCC) to immediately initiate an investigation and full review of all license ownerships to ensure strict compliance with the CCC’s regulations and the Commonwealth’s anti-monopoly, pro-competition, and pro-equity policies – starting with Ascend Wellness,” the letter reads. “This review should prioritize practices for providing greater transparency in license ownership.”

Violations of the three-license cap are not limited to Ascend, the letter claims, but rather is a trend that extends to others in the industry who “are using family members and others as straw purchasers, exercising control not reflected in CCC documents, and otherwise violating ownership limits to exercise excessive influence over this fragile emerging market.”

“The CCC must demonstrate its commitment to market integrity by strictly enforcing the Commonwealth’s ownership limits,” the letter asserts. “We urge the CCC to conduct a comprehensive review of all license holders to ensure no violations of ownership limits by using relatives or associates.”

The letter from BECMA and EON also cited state lobbying records, which it said showed that Ascend has spent $30,000 thus far this year in efforts to lift the three-license cap. The letter also noted a similar ownership allegation was made in a 2021 lawsuit against Kurtin, which charged that he “invested in, lent money to, or attempted to develop more than three” Massachusetts cannabis businesses. Kurtin is also one of the largest owners of Ascend.

In addition to investigating Kurtin and Ascend, BECMA and EON asked for regulators to establish a new anonymous tip line for whistleblowers to safely report similar violations and for lawmakers to give the CCC all the resources it needs to “preventing market consolidation.”

Many of the same coalition also claimed responsibility for killing a legislative amendment that would have rolled back the same three-license cap earlier this year.

A spokesperson for Ascend did not immediately respond to a request for comment Wednesday.