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Long-awaited rules that will govern Rhode Island’s budding recreational cannabis market are finally coming, putting the state one step closer to issuing licenses for two dozen retail pot shops.
Rhode Island’s Cannabis Control Commission on Wednesday released 200 pages of draft regulations for public comment. Public comment will be open for 30 days, after which the commission will consider making any changes before final approval.
Proposed rules include new packaging and labeling requirements, how licenses will be awarded, a new quality assurance testing program, and criteria to apply for one of the six social equity licenses.
“It is a very monumental meeting for this commission,” Kimberly Ahern, who chairs the three-member commission, said to the crowd of cannabis workers and advocates who attended Wednesday’s 9:30 a.m. meeting.
It’s been a long road for the state to establish its recreational cannabis market, which was legalized by state lawmakers in 2022. Over a year passed before the three-member panel was even set up, which then needed staff to draft any proposals and to learn what other states have done in setting up their rules.
“This was almost a little bit like running a startup,” Ahern said. “I’m proud of this work and the team that got us here — my top priority as chair of this commission is to regulate cannabis in a way that is safe, equitable, and transparent.”
Currently, there are just seven previously authorized medical marijuana dispensaries in the state, leaving cultivars eager for new places to sell their products.
“We’ve got a large market that’s underserved right now and a base that hasn’t even been reached out to experience cannabis,” Jason Calderon, the vice president and CEO of Bonsai Buds, an Exeter-based cannabis cultivator, said in an interview.
Calderon said he was “extremely excited” to see the commission finally enter the next phase of the regulatory process.
“Obviously we still have a lot of hurdles we need to get through before this is real and we’re seeing applications come in and be viewed,” Calderon said.
Cannabis Control Commission Chair Kimberly Ahern, center, speaks at the panel’s Jan. 8, 2024, meeting. To her left is commissioner Robert Jacquard. Right is commissioner Layi Oduyingbo. (Christopher Shea/Rhode Island Current)
Lottery for licenses
Under the 2022 legalization, the commission can offer 24 new licenses to recreational dispensaries, with six reserved for social equity applicants and another six reserved for worker-owned cooperatives.
Licenses must be spread throughout six geographic zones, with a maximum of four stores per zone.
The proposed regulations call for a hybrid selection process in which applicants would first be screened based on qualifications before being placed in a lottery. All prospective retailers would have to pay an application fee of $7,500 and a yearly $30,000 licensing fee.
Though he voted in favor of the proposed regulation, Commissioner Robert Jacquard said he would prefer to see a solely merit-based approval system.
But Ahern said relying solely on the commission’s opinion could open them up to lawsuits and continue to bog down expanding Rhode Island’s retail market. Massachusetts’ Cannabis Control Commission was briefly sued in 2021 by a trade group that sought to block new delivery licenses meant for social equity applicants, but that case was dropped as the group faced an exodus of members. Minnesota’s Office of Cannabis Management canceled its planned license lottery in December after facing lawsuits from people who alleged they were unlawfully denied entry.
“My goal in this decision-making is to avoid further delay, which is certainly a theme we’ve heard in every public comment we’ve ever had,” Ahern said.
Narrowing the definition on social equity
The draft regulations also narrow down who qualifies for the six social equity licenses. Regulators have sought to refine the definition since November 2023 based upon examples in other state and federal agencies.
The proposed criteria for a social equity license requires applicants demonstrate at least 51% ownership and control by individuals directly impacted by past cannabis laws or economic disparities. Qualifying factors include convictions for nonviolent cannabis offenses or residency in disproportionately impacted areas — which can be determined by federal poverty level, unemployment rate, the number of students in a free school lunch program, and historic arrest rates by census tract.
Applicants can also qualify by having over half their work force come from a disproportionately impacted community.
A preliminary analysis presented to the commission in October found of the state’s 39 municipalities, only three met the criteria for a social equity zone set in Rhode Island’s 2022 law: Central Falls, Providence and Woonsocket. Some census tracts in Pawtucket and Newport also met the criteria.
Advocates have previously said these criteria are open to interpretation and filled with loopholes that can be exploited by those who didn’t actually interact with the criminal justice system.
Ahern on Wednesday said some had urged the commission to hold off on moving forward with social equity measures in favor of advancing the standard retail licenses more quickly.
“It wasn’t the right thing to do,” she said. “Our future social equity applicants are, by very definition, those who have been most impacted by the very fact that using and selling cannabis used to be a crime — all the while others have managed to make this their livelihood.”
Andre Dev, a founding member of the proposed cooperative PVD Flowers, commended the commission for prioritizing social equity in the industry.
“As we’ve seen in other states, that really leaves less capitalized workers and owners behind and creates real structural barriers to them getting into the market,” he told Rhode Island Current.
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“}]] Rhode Island’s Cannabis Control Commission Wednesday released its long-awaited draft rules released its long-awaited draft rules for governing the state’s recreational market. Read More
