What happened at the Cannabis Control Commission?

As issues — and damning headlines — pile up at the agency, Massachusetts officials are hoping to appoint a receiver before the end of the legislative term.

They say where there’s smoke, there’s fire. And lately, it seems that the smoke is billowing from the Cannabis Control Commission.

From high staff turnover rates, slow rollout of regulations, lengthy wait times for licenses, ongoing governance issues, and an alleged hostile work environment, Massachusetts officials are saying enough is enough.

“The Cannabis Control Commission has faced what sometimes feels like an endless stream of scandals,” said Sen. Michael Moore, D-Millbury, in a statement, requesting an oversight hearing, which happened last week. “The public deserves some accountability on why these issues have proven so hard to stamp out.”

With the CCC requesting a 23% funding increase during fiscal 2024 budget negotiations, Moore says it is critical the agency has plans to “right the ship” since “millions of our tax dollars are at stake.”

Moore filed legislation to create an internal special audit unit within the commission. If passed, the legislation would delegate oversight responsibilities to an audit unit within, but not subject to, the commission’s control.

Moore has since filed an amendment to create a receiver for the commission under the economic development bill, but the Senate rejected the amendment. The only hope for a receiver would be through his initial legislation in February, which is stuck in committee.

Last week, Inspector General Jeffrey Shapiro asked the state Legislature again to appoint a receiver for the commission before the end of the term on July 31.

Shapiro hopes the receiver will turn around the leaderless commission as the Legislature works to reorganize the 7-year-old agency.

“The Cannabis Control Commission is a rudderless agency without a clear indication of who is responsible for running its day-to-day operations,” Shapiro said in a statement.

However, acting Chair Ava Challender Concepcion disagrees with these statements, saying her “staff are hard at work growing and maintaining a safe, effective, and equitable medical and adult-use marketplace.”

The cannabis industry has generated more than $7 billion in sales for the state, she pointed out.

Concepcion says that “a receiver would come in cold and stymie productivity just as our hiring process for a permanent executive director is underway.”

So, how did the Cannabis Control Commission get to this point?

In November 2016, slightly more than half of Massachusetts residents voted to pass Ballot Question 4, which legalized the possession, use, production and sale of adult-use cannabis.

The following year, Massachusetts created a new agency, the Cannabis Control Commission, to support the implementation of adult-use cannabis. The regulatory body comprises five commissioners appointed by the governor, the attorney general, and the treasurer.

There has been a high turnover rate among leadership positions at the commission in recent years.

In May 2022, Steve Hoffman, the agency’s then-chair, resigned months before his five-year term expired. He was the only remaining commissioner of the five people initially appointed to the oversight body in 2017. He did not give a reason for his departure.

Only a year into office, Chair Shannon O’Brien — a former state treasurer and the 2002 Democratic candidate for governor vs. Mitt Romney — was suspended from her position in September 2023 after an investigator’s report concluded that O’Brien made “racially, ethnically, and culturally insensitive statements,” including “public statements that could reasonably be perceived as creating the impression that … diverse candidates were not qualified for the CCC role.”

After much discussion and debate, the commission appointed Concepcion as acting chair and has continued to vote her in as acting chair at subsequent meetings.

The inspector general says the turnover leads to confusion regarding who is in charge, who manages whom, and frustration over the ongoing public drama.

The commission has more than 20 vacancies. Many are critical leadership positions, including executive director, general counsel, chief of investigations and enforcement, deputy general counsel, enforcement counselor, and HR manager.

Questions over the mediation efforts are swirling.

Towards the end of Hoffman’s reign, he began work to get a mediator to get “buy-in” from the commissioners, executive director and staff on governance.

The inspector general notes that these efforts have lasted longer than the employment of several commissioners and professional staff, including those seeking mediation.

Between June 20200 and December 2023, the commission held 16 executive sessions to discuss mediation and its governance charter and paid at least $16,000 for the work.

In response to the inspector general, Concepcion said in a letter that a blueprint for a governance structure is in the final stages of legal review and will be discussed at a public meeting.

“The challenges at the commission are far from secret,” the letter said. “We are committed to resolving them.”

Other issues have riled the commission as well.

In January 2022, the death of a Holyoke cannabis worker stirred up the commission, especially since it took months for the commissioners to learn about it. The executive director at the time decided not to share the news, raising questions about who was in charge.

In March 2023, a data breach occurred in which the commission sent a cannabis blogger a spreadsheet containing 17,000 rows of cannabis employees’ data and other confidential information.

In September 2023, a state audit found that over $10,000 of produce contained materials past the expiration date for testing, which could result in a “potential public health risk and loss of consumer confidence.”

In December of last year, the commission voted to eliminate the “two driver rule,” which requires marijuana deliveries to be handled by two drivers, because it adds significant cost to the service. However, by the May 9 meeting, the commission indicated that removing the rule was still several months away, adding confusion and lingering costs to marijuana businesses.

In addition, there have been complaints about the length of time the Cannabis Control Commission takes to process registration applications, conduct investigations, and complete enforcement actions.

One of the intentions of the initial ballot question was to open social cafes, but the commission has yet to formalize a license for social consumption businesses.

“For the last eight years, we could have had a whole new industry,” said Moore.

However, Concepcion notes the commission has accomplished a lot over its short tenure.

After six years in existence, she notes, the industry is producing $1 billion in sales annually from adult-use marijuana establishments.

The industry also provided $322 million in tax and non-tax revenue in fiscal year 2023 alone.

In June, the commission approved a measure allowing the legal transportation of cannabis to Dukes and Nantucket counties to counter an illicit market surge during the tourist season.

Enforcement actions include one of the largest fines ever issued to Trulieve, in Holyoke, for $350,000 for unsanitary conditions and workplace safety issues.

“With a new executive director on the horizon, the commission is on the precipice of writing a new chapter,” Concepcion said in a statement. “One that builds on our work expanding and maintaining a safe, well-regulated, and equitable cannabis industry.”

The inspector general calls for action by the soon-approaching end of the legislative calendar on July 31.

“I do not make this recommendation lightly, but I do make it urgently,” Shapiro said in a statement. “Waiting until the next legislative session to begin is fraught with risk and uncertainty. That will impact an emerging industry that is already struggling to gain a solid footing.”

Even though Moore’s amendment to create a receiver for the commission through the economic development bill failed, there is still hope that his initial legislation could come out of committee and pass.

He said that if nothing is done, it will start to affect the viability of these operations and the potential for new companies to enter the social equity program, which helps establish cannabis businesses in communities that have been disproportionately harmed by marijuana prohibition and enforcement.

Because cannabis sales are still federally illegal and subject to strict restrictions, lenders are not financing any of these stores.

“So there’s personal money at stake here,” Sen. Moore said.

Moore said that for someone investing their life savings to start a business and “fall in this mess,” there is a potential for “seeing your life savings disappear before your eyes.”