(BOSTON 6/18/2024) — Massachusetts Inspector General Jeffery Shapiro today issued a letter urging that the Legislature take immediate action to appoint a receiver to assume day-to-day management of the beleaguered Cannabis Control Commission (CCC) until broader legislative action can be taken to reform the agency’s governance structure. The letter comes after a limited review conducted by the Office of the Inspector General (OIG) found the CCC lacked a clear leadership hierarchy with well-defined responsibilities and duties.
“For the past two years, CCC’s staff, including its commissioners, have spent considerable time and money seeking to clarify roles and responsibilities. As of the date of this letter, it does not appear the CCC, on its own, is any closer to resolving these issues,” the letter states. Inspector General Shapiro goes on to say that a public agency responsible for collecting $322 million in revenue in FY23 must operate better.
“Perpetual scandal, mismanagement, and staffing issues have plagued the Cannabis Control Commission since day one. Seven years later, the CCC remains a black eye on the legal cannabis industry in Massachusetts,” said Senator Michael Moore (D-Millbury). “For years I have been calling for action to bring more transparency and accountability to the CCC because I believe cannabis consumers, business owners and employees, and everyday taxpayers deserve better. While Inspector General Shapiro’s initial review findings are damning of the CCC’s current leadership, they do not surprise me. I hope that the Massachusetts Legislature will heed the Inspector General’s call to action and appoint a receiver to begin plugging the holes at this agency while lawmakers evaluate how we can reform the CCC to work better for everyone.”
“The Cannabis Control Commission is a rudderless agency without a clear indication of who is responsible for running its day-to-day operations. Today I am asking legislative leaders to take immediate action to appoint a receiver and, in short order, address the underlying issues in the enabling statute so that the agency can function properly, maintain its budgeted revenue stream, and provide clarity and certainty for its stakeholders,” Inspector General Jeffery Shapiro said. “For two years, the Commission has spent considerable time and money with a consultant drafting a governance charter to clarify roles and responsibilities. They are no closer to resolving these issues as I write this, therefore, immediate action must be taken to prevent the further waste and uncertainty.”
In recent years, the Cannabis Control Commission has been the subject of dozens of news reports for allegations including long wait times for legal permits, inaccurately labeled and unsafe product being sold, the inadvertent release of personal information of every cannabis industry employee in the state, a toxic work environment, and numerous suspensions, resignations, and leadership shakeups, amongst other issues. The CCC has spent almost $200,000 on mediation to resolve leadership disputes over the past three years with no work product to show for it and, with two weeks left in the fiscal year, approximately $192,000 on outside legal counsel during FY24 amongst three separate law firms, up over a $100k from last fiscal year.
While it has been facing personnel issues and leadership turmoil, the CCC has been slow rolling desperately needed regulatory reform and policy changes. Social cannabis consumption sites, approved by Massachusetts voters as part of the original ballot initiative legalizing recreational cannabis, are still waiting on a regulatory framework by the CCC nearly ten years later. Changes to cannabis delivery service policy allowing delivery drivers to travel alone – a policy change strongly advocated for by minority-owned dispensary owners – have yet to be implemented six months after being approved by the commission. Other policy changes including to the Social Equity Program and to the Cannabis Social Equity Trust Fund also remain in flux. The agency’s General Counsel was recently ordered to begin drafting these changes, but it was later announced that the Counsel is departing from the CCC.
Inspector General Shapiro’s letter points to the CCC’s disfunction as a result of a “unclear and self-contradictory” enabling statute. “For instance, the statute says the chair has ‘supervision and control over all the affairs of the commission,’ while the executive director is the ‘executive and administrative head of the commission.’ These descriptions, in the absence of better defined authority and responsibilities, have empowered individuals in leadership roles to assert competing visions of the chair’s, executive director’s, and commissioners’ roles,” the letter states.
In its closing section, the Office of the Inspector General calls for urgency in bringing reform to the CCC. In the short term, the letter endorses the appointment by the Legislature of a receiver with the authority to manage the day-to-day operations of the agency before the end of the 2023-24 legislative session on July 31st. Long term, Inspector General Shapiro urges the Legislature to revise the overall governance structure of the CCC as he believes that the commission’s structure is “not suitable” for operating an agency overseeing the legal cannabis industry in Massachusetts.
Previously, Senator Moore introduced a bill that would ensure the quality, efficiency, and integrity of the CCC’s operational and regulatory functions through the establishment of an Inspector General Special Audit Unit. The unit would exist within, but will not be subject to the control of the CCC, and mirrors special audit units within the State Police and the Department of Transportation.
Inspector General Jeffery Shapiro’s full letter can be found online here.
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