PROVIDENCE — One of Massachusetts’ top cannabis officials offered advice for Rhode Island Tuesday morning as state lawmakers here kick off the debate on legislation to legalize recreational marijuana:
Plan ahead.
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Steven Hoffman, chairman of the Massachusetts Cannabis Control Commission, told a gathering of businesspeople at a Greater Providence Chamber of Commerce meeting that – speaking from his own experience – Rhode Island leaders should waste no time in addressing several issues, including:
- The rights of employers if adult use of marijuana is legalized
- The lack of banking for new marijuana businesses
- The need for baseline research and studies of cannabis use at the state level
- The coordination among state and local officials in implementing the law
And if the legalization of recreational marijuana is passed, Hoffman said, the state should proceed carefully, not quickly.
“Do not succumb to the pressure to get this done fast,” Hoffman said to the crowd of more than 100. “This is really hard. Do not cave to the pressure to rush.”
Hoffman’s comments come as the Senate Finance and Judiciary committees prepare to hold a joint hearing Tuesday afternoon on Article 20 of Gov. Gina M. Raimondo’s proposed budget that would legalize and heavily regulate the adult use of marijuana. The House Finance Committee has scheduled a hearing on Article 20 on Wednesday.
Raimondo’s proposal estimates about $14.3 million in gross tax revenue by the end of fiscal 2020.
Hoffman and four Massachusetts Cannabis Control Commission members have led the Bay State’s move to legalization of recreational use of marijuana, which was approved by a statewide referendum in 2016. (Hoffman acknowledged Tuesday that he voted against it.)
The rollout has been slow. The first two retail stores opened in November, after months of hashing out issues such as licensing procedures and tracking the marijuana plants from seed to sales. Since then, licensing has ramped up.
“Really what we’re doing here, in my opinion, is a gigantic startup.” said Hoffman, whose background is in finance and business. “I’ve done startups before, but I’ve never done one this complicated, this controversial and this public.”
“Not everybody’s happy, but I’m proud of what we’ve done,” Hoffman said, adding that he’s “incredibly cognizant of the work we have left.”
The work that’s left is something Rhode Island can get a jump on now, Hoffman said.
One area is employment law. While it’s legal in Massachusetts for adults to consume marijuana, employers in Massachusetts – and Rhode Island – have the right to test workers for narcotics and fire anyone who tests positive.
“It sounds like the [Greater Providence Chamber] is adamant about not changing that,” Hoffman said. “But think about the implications.”
He recounted how a Massachusetts woman who had state approval for medicinal marijuana was fired when she tested positive for marijuana use. “It’s absolutely the right of the employer to do so, but we got tremendous amount of pushback on this.”
Legislation has been filed this session to prevent employers from firing workers with medical marijuana card for testing positive. “We’re dealing with this issue a year and a half after we launched; get ahead of it if you can because it’s going to be an issue,” he said.
A related matter are landlord and tenant rights and whether smoking marijuana can be banned by a landlord. “I don’t have a solution for you, I just have a strong recommendation to think about that ahead of time,” Hoffman said.
Another big challenge: Banking.
Hoffman said most banks won’t work with recreational marijuana businesses because it’s not legal on a federal level, making it difficult for these startups to survive. Hoffman said he’s persuaded five small banks and credit unions in Massachusetts to do business with the recreational-marijuana industry. “With 13 stores open, that’s adequate,” he said. “But that’s certainly not going to be adequate as this industry expands.”
Adding to the complications, the Federal Reserve Bank of Boston “will not accept marijuana cash,” Hoffman said, meaning that local banks can only recirculate the cash through their ATM network.
Even getting cash from the marijuana businesses to the bank isn’t easy. Hoffman said armored car services are federally regulated and won’t pick up marijuana-related money because of the federal law prohibiting marijuana use.
“[The banking issue] is incredibly complicated. Get started working this issue as quickly as possible, long before legislation is passed, long before you start implementing it,” Hoffman said.
Hoffman also recommended state leaders collect baseline data on marijuana use now, so questions about the effects of legalization on underage use, for example, can be answered later. “The state of Colorado can’t answer those questions because they did not do baseline research before they launched,” he said. “Make sure you [collect baseline data] so you can answer those questions. You can’t go back in time.”
Hoffman also recommended that the state collaborate with municipalities early on. “There are 351 cities and towns in Massachusetts, and I would say there are 351 different strategies that the cities and towns have employed” with marijuana enforcement, Hoffman said.
About 40 municipalities have banned marijuana establishments and 135 had moratoriums, ending last Dec. 31. “It’s messy,” Hoffman said. “It’s got to be collaborative and you’ve got to engage with the cities and towns as early as possible.”
William Hamilton is a PBN staff writer. Email him at Hamilton@PBN.com.
