SEP Course Curriculum.pdf

Business Plan Creation and Development

Purpose: This course will provide a comprehensive overview of how to create and develop a working business plan and cost analysis. The course includes group application walk-through.

The Course Instructor will be available for one-on-one application walk-through based on participant interest and need. If unable to meet the demand for one-on-one sessions, the Course

Instructor will work with the Commission to seek an agreed-upon solution.

Learning Objectives: Participants will develop a fluid draft of their business vision, plan and cost analysis, and a checklist and framework of next steps. Participants will learn how to apply their business plan and use it to prepare for marketing and fundraising.

Regulations to Cover:

• 500.101(f)(2): Application Requirements

Components to consider:

• 500.101 - What is a Business Plan?

• What should be included in a business plan?

o What components make a business plan successful in a licensing application and with investors?

• Applying your business plan

• Using your business plan for marketing and fundraising with investors

• Summarizing your business plan/developing an “elevator pitch”

• Business plan tools and resources

Raising Capital in the Cannabis Industry

Purpose: This course will teach participants about avenues of raising capital, investment types and how to identify, connect with, and pitch to investors. The course will also provide insight into the challenges of raising capital, predatory practices, and navigating the industry due to federal illegality.

Learning Objectives: Participants will develop a plan to raise capital and understand different fundraising options, investment types, and predatory practices. Participants will also create and practice their pitches. The Course Instructor will provide a panel discussion with investors that provides (i) insights as to investor concerns and (ii) an opportunity for networking with participants.

Regulations to Cover:

• 500.101 (1)(a)4e-h: Application Requirements / Application of Intent

• 500.101 (1)(a)5: Application Requirements / Application of Intent

Components to Consider:

• What is Capital?

• Types of Capital

• Do I need capital? How much capital do I need?

o Disclosing Capital Amounts (Regulation Sections)

• Accessing capital needed based on budget and cost analysis

• Where to look for investors

• Types of investors

• How to screen/vet potential investors and investor red flags

• Do investors need ownership/equity/control?

• Challenges of raising capital (especially in context to ownership requirements to receive

SEP benefits)

• Overcoming challenges

• Tools and resources to connect with investors

Predatory Lending in the Cannabis Industry

Purpose: This course aims to heighten participants’ awareness of the issues of predatory lending practices. The course will assist participants in preventing, resolving, and protecting industry entrepreneurs from falling victim to predatory lending practices.

Learning Objectives: Participants will learn to manage the risk and rewards of cannabis financial lending practices. Participants will be able to:

• Define “predatory lending”

• Understand Massachusetts General Laws and Regulations

• Recognize predatory red flags

• Understand the dynamics of funding marijuana businesses

• Understand predatory lending tactics and how to avoid them

• Know how to establish sound and reliable lending resources

• Learn techniques to successfully raise capital in the cannabis industry

• Use their business plans to help guide them in avoiding predatory lending practices

Components to Consider:

Defining Predatory Lending in the Cannabis Industry

Predatory lending benefits the lender and ignores or hinders the borrower’s ability to repay a debt. Predatory lenders often target communities where few other credit options exist, which makes it more difficult for borrowers to shop around. If a lender charges triple-digit interest, does not check your credit score, or has a history of customer complaints, there's a good chance the loan is predatory.

Predatory lending practices are becoming more and more prevalent throughout the U.S. This type of lending takes advantage of the borrower and benefits only the lender. Unfortunately, the practice of predatory lending is not always illegal. Still, it can leave borrowers with a ruined credit record, and an unmanageable debt burden and is a leading cause of homelessness.

Predatory lenders tend to target certain groups of people. These include:

• Minorities

• Elderly

• Poor

Predatory Lending Tactics to be Aware Of

Predatory tactics include:

• Excessive and abusive fees

• Balloon payment: This is one very large payment at the end of a loan's term, often used by predatory lenders to make your monthly payment look low. The problem is you may not be able to afford the balloon payment and will have to refinance, incur new costs, or default.

• Loan flipping: The lender pressures a borrower to refinance, again and again, generating fees and points for the lender each time. As a result, a borrower can end up trapped by an escalating debt burden.

• Asset-based lending and equity stripping: The lender grants a loan based on your asset, e.g. a home or a car, rather than on your ability to repay the loan. When you fall behind on payments, you risk losing your asset. Equity-rich, cash-poor older adults on fixed incomes may be targeted with loans (e.g. for a house repair) that they will have difficulty repaying and that will jeopardize their equity in their home.

• Unnecessary add-on products or services, such as single-premium life insurance for a mortgage.

• Steering: Lenders steer borrowers into expensive subprime loans, even when their credit history and other factors qualify them for prime loans.

• Reverse redlining: Redlining, the racist housing policy that effectively blocked Black families from getting mortgages, was outlawed by the Fair Housing Act of 1968.23. In a kind of reverse redlining, minority business owners are often targeted by predatory and subprime lenders.

• Bait and switch: The bait and switch tactic lures barrowers with special offers and then changes course once the borrower has committed.

• Black and Latinx homeowners particularly affected: Predatory mortgage lenders targets Black and Latinx homeowners aggressively in predominantly minority neighborhoods, regardless of their income or creditworthiness. Even after controlling for credit score and other risk factors such as loan-to-value (LTV) ratios, subordinate liens, and debt-to-income (DTI) ratios, data shows that Black Americans and Latinos were more likely to receive subprime loans at higher costs.

• Prepayment Penalty or Fees: Fees that lenders may attempt to charge and/or over charge if you pay off your loan early.

How to Avoid Predatory Lending

Knowing the right questions to ask is key, as many predatory lenders are viewed as established institutions such as banks, finance companies, mortgage brokers, attorneys, or real estate contractors.

• Educate yourself: Becoming more financially literate helps borrowers spot red flags and avoid questionable lenders. The FDIC has tips for protecting yourself when you take on a mortgage, including instructions for canceling private mortgage insurance (PMI), which is paid for by the borrower but protects the lender. FDIC also facilitates a MoneySmart

Podcast with tips on how to protect yourself while borrowing.

• Seek a variety of options: Shop around for your loan before you sign on the dotted line.

If you've experienced lending discrimination in the past, you'll understandably want to get the process over with as soon as possible. Don't let the lenders win this time;

comparing offers will give you an advantage.

• Ask questions: Don’t be afraid to ask lenders the same questions that they are asking of you. You need to understand what they have to offer you and your business. What is their investment portfolio? How successful are their investments? How familiar are they with the cannabis industry? The right questions are just as important to you and your business as it is to them.

Here are some tips to help you stay ahead of the game!

• Know what you are looking for.

• Know industry standards.

• Do your due diligence.

• Use accredited lenders.

• Do your homework, shop around.

• Borrow only what you need. Many predatory lenders will try to talk borrowers into signing for a loan that is larger than they need. The whole point of this is to get the borrower to default on the loan.

• Be aware of lenders trying to provide more than you need. If a lender is not concerned about your employees’ finances, then they’re probably more interested in having them default.

• Seek out and identify red flags. Before signing a loan agreement, fully understand the terms of the loan. Lenders who fail to define the terms are usually an indication of a predatory lender.

• Make sure the terms are what you can afford. Predatory lenders often try to structure https://www.fdic.gov/resources/consumers/consumer-assistance-topics/loans.html https://www.fdic.gov/news/podcasts/#moneysmart https://www.fdic.gov/news/podcasts/#moneysmart loan repayments so that they are virtually impossible to pay back. One common tactic is only charging the borrower the interest rate, which means they are never paying down the principal.

• Beware of special offers or attractive terms. Predatory lenders often make special offers to entice the borrower, but then have the borrower sign a loan agreement with a different set of terms

• Be aware of any prepayment penalties: These fees are incurred when the borrower tries to pay off the loan early or refinance the loan. Prepayment fees can be exorbitant.

• Look out for hidden balloon payments. This is a high fee that is due at the end of the loan. It is not disclosed to the borrower before they sign the contract. The borrower is encouraged to take this loan because of the lower upfront payments but then struggles to make payments later in the term of the loan.

• If a lender charges triple-digit interest, does not check your credit score, or has a history of customer complaints, there's a good chance the loan is predatory.

What To Do if You Are a Victim

The best method of escaping predatory loans is to avoid them in the first place. There are, however, a few things you can try:

• Report the Lender

• Use Your Right of Rescission

• Sue the Lender

• Refinance the Loan

Additional Terms and Concepts to Consider

• Convertible Notes: A form of short-term debt that converts into equity, typically in conjunction with a future financing round.

• Debt vs Equity Deals: Debt financing involves the borrowing of money and paying it back with interest. The most common form of debt financing is a loan. Debt financing sometimes comes with restrictions on the company's activities that may prevent it from taking advantage of opportunities outside the realm of its core business. Equity financing involves selling a portion of a company's equity in return for capital. The main advantage of equity financing is that there is no obligation to repay the money acquired through it.

• Term Sheet: A nonbinding agreement that shows the basic terms and conditions of an investment. The term sheet outlines the material terms and conditions of a potential business agreement, establishing the basis for future negotiations between a seller and buyer.

• Payment Terms: Payment terms provide clear details about the expected payment on a sale. Often, payment terms are included on an invoice and specify how much time the buyer must make payment(s) on the purchase.

Accounting and Taxes for Cannabis Businesses

Purpose: This course will provide a comprehensive overview and breakdown of accounting, tax law compliance, and guidelines. The course will also focus on 26 U.S.C. § 280E.

Learning Objectives: Participants will understand tax compliance, practices, violations, projections, and documentation associated with a cannabis business. Participants will understand procedures to ensure accurate recordkeeping, including inventory protocols in compliance with

935 CMR 500.105(8)(9). Participants will draft a written recordkeeping operating procedure and a checklist of required tax documents and next steps.

Regulations to Cover:

• 500.015 (8-9): General Operational Requirements for Marijuana Establishments o Inventory and Transfer o Recordkeeping

Components to Consider:

Accounting

• General financial records and accounting principles

• Assets and liabilities

• Monetary transactions

• Books of accounts, which include journals, ledgers, supporting documents, agreements, checks, invoices, and vouchers

• Sales records

Cannabis Taxes

• General tax documents and principals

• 26 U.S.C § 280E

• Tax compliance for cannabis businesses

• Violations

• Projections

• Open data platform: https://masscannabiscontrol.com/open-data/

Inventory and Transfer

• Real-time Inventory:

o Shall be maintained as specified by the Commission and in 935 CMR

500.105(8)(c) and (d) including, at a minimum, an inventory of cannabis plants;

cannabis plant-seeds and clones in any phase of development such as propagation, vegetation, and flowering; cannabis ready for dispensing; all cannabis products;

and all damaged, defective, expired, or contaminated cannabis and cannabis

Products awaiting disposal. A Marijuana Establishment shall:

▪ Establish inventory controls and procedures for the conduct of inventory reviews, and comprehensive inventories of cannabis products in the process of cultivation, and finished, stored cannabis;

▪ Conduct a monthly inventory of cannabis in the process of cultivation and finished, stored cannabis;

▪ Conduct a comprehensive annual inventory at least once every year after the date of the previous comprehensive inventory; and

▪ Promptly transcribe inventories if taken by use of an oral recording device.

• Inventory Record:

o Record of inventory shall include, at a minimum, the date of the inventory, a summary of the inventory findings, and the names, signatures, and titles of the individuals who conducted the inventory.

o A Marijuana Establishment shall attach plant tags to all cannabis, clones, and plants and attach package tags to all finished cannabis and cannabis products, and track all cannabis seeds, clones, plants, and cannabis products, using a seed-to-sale methodology in a form and manner to be approved by the Commission.

• Recordkeeping:

o Records of a Marijuana Establishment must be available for inspection by the

Commission, on request. The financial records of a Marijuana Establishment shall be maintained in accordance with generally accepted accounting principles.

Written records that are required and are subject to inspection include, but are not necessarily limited to, all records required in any section of 935 CMR 500.000, in addition to the following:

o Written Operating Procedures as required by 935 CMR 500.105(1);

o Inventory Records as required by 935 CMR 500.105(8);

https://masscannabiscontrol.com/open-data/ o Seed-to-sale Tracking Records for all cannabis products as required by 935 CMR

500.105(8)(e);

• The following personnel records:

o Job descriptions for each employee and volunteer position, as well as organizational charts consistent with the job descriptions;

o A personnel record for each Marijuana Establishment agent. Such records shall be maintained for at least 12 months after termination of the individual's affiliation with the Marijuana Establishment and shall include, at a minimum, the following:

▪ All materials submitted to the commission pursuant to 935 CMR

500.030(2);

▪ Documentation of verification of references;

▪ The job description or employment contract that includes duties, authority, responsibilities, qualifications, and supervision;

▪ Documentation of all required training, including training regarding privacy and confidentiality requirements, and the signed statement of the individual indicating the date, time, and place he or she received said training and the topics discussed, including the name and title of presenters;

▪ Documentation of periodic performance evaluations;

▪ A record of any disciplinary action taken; and

▪ Notice of completed responsible vendor and eight-hour related duty training.

o A staffing plan that will demonstrate accessible business hours and safe cultivation conditions;

o Personnel policies and procedures; and o All background check reports obtained in accordance with M.G.L c. 6 § 172, 935

CMR 500.029, 935 CMR 500.030, and 803 CMR 2.00: Criminal Offender Record

Information (CORI).

• Business records, which shall include manual or computerized records of:

o Assets and liabilities;

o Monetary transactions;

o Books of accounts, which shall include journals, ledgers, and supporting documents, agreements, checks, invoices, and vouchers;

o Sales records including the quantity, form, and cost of cannabis products; and o Salary and wages paid to each employee, or stipend, executive compensation, bonus, benefit, or item of value paid to any persons having direct or indirect control over the marijuana establishment.

o Waste disposal records as required under 935 CMR 500.105(12); and o Following closure of a Marijuana Establishment, all records must be kept for at least two years at the expense of the Marijuana Establishment and in a form and location acceptable to the Commission.

Municipal Approval Process

Purpose: This course will provide a comprehensive breakdown of the municipal process, including the differences between municipality requirements, how the municipal process relates to the application for licensure at the state level, and the processes and municipal documentation required for community outreach meetings and the application for a Marijuana Establishment, per 935 CMR 500.101(a)(6)(7)(8)(9)(10).

Learning Objectives: Participants will understand the municipal process, documentation requirements, and how to navigate the process including bans and zoning. Participants will develop a clear strategy for their community outreach meetings and next steps. Participants will be briefly introduced to Host Community Agreements (HCAs) requirements.

Regulations to Cover:

• 500.101 (a)(8): Application Requirements - Application of Intent

• 500.170: Municipal Requirements

Components to Consider:

What is a Municipality

• 351 Cities and Towns in Massachusetts

Differences Between Each Municipality

• Define bans, moratoriums, and zoning

• Understanding the municipal bylaws and zoning laws - what are bylaws and zoning laws and where can they be found?

• Differences between municipal process/es and state process and how are they related

Navigating the Municipal Process?

• Where to begin and who to contact

Contacts vary by municipality, licensees/applicants should begin with City

Councilors/Alderman, local civic or community advocacy groups, zoning boards, and city and town websites. Applicants should start at the municipal level first as it is important to follow the municipal process.

Community Outreach Meeting

An important requirement in the application process for licensure as an adult use Marijuana

Establishment is the Community Outreach Meeting.

Community outreach and engagement can be done successfully by being informed and prepared to share information about a proposed Marijuana Establishment.

The Community Outreach Meeting must be documented in the Application of Intent packet and must be conducted within six months prior to filing the Application of Intent. For example, if an applicant files its Application of Intent on November 1, 2018, the Community Outreach Meeting must have occurred after May 1, 2018.

Where to Hold the Meeting: Check with the city or town and local civic associations groups on best places to hold the meeting. It is difficult to predict how many people will attend a

Community Outreach Meeting, so you may want to find a large assembly space, city or town halls, local schools, or other places of assembly. Any space used should be accessible under the

Americans with Disabilities Act Accessibility Guidelines.

Meeting Notice: An applicant must ensure that the meeting notice includes the time, place, and subject matter of the meeting and the proposed address of the Marijuana Establishment. A template is available on MassCannabisControl.com.

At least 7 calendar days prior to the meeting, the notice must be:

• Published in a newspaper of general circulation in the city or town (please make sure to check the newspaper’s publishing deadlines to make sure you give yourself sufficient time);

• Filed with the town or city clerk, the planning board, the contracting authority for the municipality, and local licensing authority for adult use of cannabis, if applicable; and

• Mailed to abutters of the proposed address of the Marijuana Establishment, owners of land directly opposite on any public or private street or way, and to the abutters

(neighbors) within 300 feet of the property line of the petitioner as they appear on the most recent applicable tax list, notwithstanding that the land of any such owner is located in another city or town (the town or city clerk may be able to assist with the abutters list).

https://masscannabiscontrol.com/wp-content/uploads/200908_Community_Outreach_Public_Notice_Template.pdf

Conducting the Meeting: The purpose of the Community Outreach Meeting is to explain the proposed Marijuana Establishment’s purpose and provide information about potential impacts to the neighborhood and community as a whole. Applicants should consider asking a respected community member to run the meeting as a neutral facilitator, such as a town moderator, other municipal official, or community leader. The applicant may wish to consider doing a presentation of their proposal first, including all the essential information discussed below, then allowing an opportunity for the public to ask questions. It may be helpful to have visuals for the audience, such as pictures of the location as it is currently and how it would look once completed, and enough information regarding security measures to provide reassurance without compromising the security plan.

Essential Information for the Community Outreach Meeting: An applicant will need to have the following information gathered prior to the meeting:

• Location of the proposed Marijuana Establishment

• What type(s) of Marijuana Establishment will be sited at the location?

• Is the proposed Marijuana Establishment allowed under current zoning bylaws/ordinances or is a zoning amendment required for the site?

• Is the proposed Marijuana Establishment allowed by right or does it require local zoning permitting? What permits are required?

• Is there a local licensing regulation pertaining to Marijuana Establishments?

• Is there a local Board of Health regulation pertaining to Marijuana Establishments?

• Does the proposed location comply with the 500-foot buffer zone from existing public or private school buildings (K-12)? Do local bylaws or ordinance create a smaller buffer zone?

• If the applicant is moving into an existing building or building a new one, will its premises comply with the security requirements set forth in 935 CMR 500?

• What steps will be taken by the Marijuana Establishment to prevent diversion to minors?

• Information demonstrating how the applicant intends to ensure that the location will not constitute a nuisance to the community as defined by law

• A plan for how the Marijuana Establishment will positively impact the community. If the applicant is a marijuana retailer, be aware of whether the municipality has passed the local tax option and be prepared to answer questions

• Be familiar with the Host Community Agreement requirements and be prepared to answer questions about them

Municipal Requirements and Documents needed at the Municipal Level to Complete State Process

• Municipal Application (if applicable)

• Outreach Meeting

• Host Community Agreement –why is this important to the state process

• Location – letters of Intent for space or other documentation

Host Community Agreements (HCAs)

Purpose: This course will provide a comprehensive overview of Host Community Agreements

(HCAs) and navigating the municipal process involved.

Learning Objectives: Participants will understand the purpose of HCAs, and how to execute a reasonable agreement with the municipality. Participants will develop a community outreach meeting strategy and a checklist of next steps.

Regulations to Cover:

• 500.101 (a) (8): Application Requirements - Application of Intent

Components to Consider:

What is a Host Community Agreement (HCA)?

Under state law, Marijuana Establishments and Medical Marijuana Treatment Centers must execute Host Community Agreements with the municipalities (Host Communities) in which they plan to operate. The HCA identifies the stipulations and responsibilities of both the municipality and the applicant or licensee.

A Marijuana Establishment with multiple physical locations, such as a craft marijuana cultivation cooperative, must execute an HCA for each municipality in which it has a physical presence.

Negotiating HCAs

As with any agreement, terms should be negotiated between willing parties to the contract. In this context, the parties to the HCA are the owners or otherwise authorized representatives of the

Marijuana Establishment and the contracting authority for the municipality. The parties should negotiate and agree to their respective responsibilities. The parties should also be aware of and abide by the constraints imposed by the plain language of M. G. L. c. 94G, § 3(d). It is clear from the statute, that the Legislature intended for a municipality to act reasonably in negotiating with a

Marijuana Establishment that seeks to operate within its community. The costs and impacts of hosting a Marijuana Establishment will understandably vary from municipality to municipality and negotiated HCAs should reflect the impacts on the host community.

It is also important that the parties to the HCA be mindful of not only the statutory language in

M. G. L. c. 94G, but also the context in which an HCA is required to be negotiated. Applicants for licensure as a Marijuana Establishment are strongly encouraged to seek legal advice from a licensed attorney regarding the negotiation of an HCA.

Legality and Contents of the HCAs

Section 3(d) of chapter 1 94G should be read in conjunction with M. G. L. 64H and 64N, the statutes that allow for the taxation of adult-use marijuana. Taken together, these statutes authorize and limit the assessments allowed on marijuana, marijuana products and Marijuana

Establishments. All HCAs should include terms that describe the conditions that the municipality and Marijuana Establishment must satisfy for that establishment to operate within that host community. Individual conditions can vary widely.

Taxes

The Legislature explicitly authorized municipalities to adopt an optional local excise tax of up to

3%, as applied to retail transactions, in addition to state sales and excise taxes. In so doing, the

Legislature established the ceiling for state-authorized taxes that may be assessed on a Marijuana

Establishment:

• the 6.25% sales tax;

• the 10.75% excise tax on marijuana and marijuana products; and

• the optional 3% local tax, which may be applied to retail sales only.

Community Impact Fee

The community impact fee authorized by G.L. c. 94G, § 3(d) is optional and separate and apart from the taxes described above. To be authorized, a community impact fee included in an HCA must meet certain legal requirements. The fee charged must be in exchange for a benefit that is sufficiently specific and special to the Marijuana Establishment and assessed in such a way that it justifies assessing the cost to this limited group as opposed to the general public, even if the public sees some benefit. Moreover, the fee should be reasonably designed to compensate the municipality for the costs of providing the benefit. Accordingly, any HCA structured consistent with G. L. c. 94G, § 3(d), may include a community impact fee, provided that the community impact fee does not amount to more than 3% of the gross annual sales of the Marijuana

Establishment and meets the legal requirements of permissible fees. A community impact fee included in an HCA must be more than simply called a community impact fee; it must be structured appropriately.

Term

The community impact fee is limited to a term of 5 years. At, or before, the conclusion of the term of the preceding community impact fee, the parties may choose to negotiate a new, optional community impact fee which shall similarly be limited to a term of 5 years or less.

Additional Tools and Resources

• https://masscannabiscontrol.com/host-community-agreement/ https://masscannabiscontrol.com/host-community-agreement/

Agent Recruitment and Training

Purpose: This course will provide a comprehensive overview of how to recruit, register, and train Marijuana Establishment agents per 935 CMR 500.0029 through 935 CMR 500.033. §

280E.

Learning Objectives: Participants will understand the registration process of Marijuana

Establishment agents as well as denial, revocation, and voidance of registration cards per regulations. Participants will also develop a recruitment plan and understand qualifications and required training(s) for Marijuana Establishment agents.

Regulations to Cover:

• 500.030: Registration of Marijuana Establishment Agents

• 500.029: Registration and Conduct of Laboratory Agents

• 500.005 (2-3): Fees o Registration Card Holder Fees o Fingerprint-based Criminal Background Checks Fees

• 500.031: Denial of a Marijuana Establishment Agent Registration Card

• 500.032: Revocation of a Marijuana Establishment Agent Registration Card

• 500.033: Void Registration Cards

• 500.802: Suitability Standard for Registration as a Marijuana Establishment Agent

• 500.803: Suitability Standard for Registration as a Laboratory Agent

Components to Consider:

What/Who is a Marijuana Establishment Agent:

Definitions:

• A Marijuana Establishment Agent is a board member, director, employee, Executive, manager, or volunteer of a Marijuana Establishment, who is 21 years of age or older.

Employee includes a consultant or contractor who provides on-site services to a

Marijuana Establishment related to the cultivation, harvesting, preparation, packaging, storage, testing, or dispensing of cannabis.

• A Laboratory Agent is an employee of an Independent Testing Laboratory registered in accordance with 935 CMR 500.029, who transports, possesses or tests cannabis in compliance with 935 CMR 500.000.

• A Registration Card or Agent Registration Card is an identification card issued by the

Commission to a Marijuana Establishment or Laboratory Agent. The Registration Card allows access into Commission-supported databases. The Registration Card facilitates verification of an individual Registrant's status including, but not limited to, the identification by the Commission and Law Enforcement Authorities of those individuals who are exempt from Massachusetts criminal and civil penalties under St. 2016, c. 334 as amended by St. 2017, c. 55, and 935 CMR 500.000.

• A Card Holder is a Registered Qualifying Patient, Personal Caregiver, Marijuana

Establishment Agent, Medical Marijuana Treatment Center (MTC) Agent, or Laboratory

Agent who holds a valid patient or Agent Registration Card

Registration Application of Marijuana Establishment Agents

• A Marijuana Establishment shall apply for registration for all its board members, directors, employees, Executives, managers, and volunteers who are associated with that

Marijuana Establishment. The Commission shall issue an Agent Registration Card to each individual determined to be suitable for registration. All such individuals shall:

o be 21 years of age or older;

o have not been convicted of an offense in the Commonwealth involving the distribution of controlled substances to minors, or a like violation of the laws of

Other Jurisdictions; and be determined suitable for registration consistent with the provisions of 935CMR 500.800 and 935 CMR 500.801 or 935 CMR 500.802.

• An application for registration of a Marijuana Establishment Agent shall include:

o Full name, date of birth, and address of the individual;

o Aliases used previously or currently in use by the individual, including maiden name, if any;

o Copy of the applicant's driver's license, government-issued identification card, liquor purchase identification card issued pursuant to M.G.L. c. 138, § 34B, or other verifiable identity document acceptable to the Commission;

o Attestation that the individual will not engage in the diversion of Marijuana or

Marijuana Products;

o Written acknowledgment by the applicant of any limitations on his or her authorization to cultivate, harvest, prepare, package, possess, transport, and dispense Marijuana in the Commonwealth.

• Background information, including, as applicable:

o Description and the relevant dates of any criminal action under the laws of the

Commonwealth, or an Other Jurisdiction, whether for a felony or misdemeanor and which resulted in conviction, or guilty plea, or plea of nolo contendere, or admission of sufficient facts;

o Description and the relevant dates of any civil or administrative action under the laws of the Commonwealth, or an Other Jurisdiction, relating to any professional or occupational or fraudulent practices;

o Description and relevant dates of any past or pending denial, suspension, or revocation of a license or registration, or the denial of a renewal of a license or registration, for any type of business or profession, by any federal, state, or local government, or any foreign jurisdiction;

o Description and relevant dates of any past discipline by, or a pending disciplinary action or unresolved complaint by, the Commonwealth, or an Other Jurisdiction, with regard to any professional license or registration held by the applicant;

o a nonrefundable application fee paid by the Marijuana Establishment with which the Marijuana Establishment Agent will be associated; and o any other information required by the Commission.

• A Marijuana Establishment Executive registered with DCJIS pursuant to 803 CMR 2.04:

iCORI Registration, shall submit to the Commission a CORI report and any other background check information required by the Commission for each individual for whom the Marijuana Establishment seeks a Marijuana Establishment Agent registration, obtained within 30 calendar days prior to submission.

o The CORI report obtained by the Marijuana Establishment shall provide information authorized under Required Access Level 2 pursuant to 803 CMR

2.05(3)(a)2.

o The Marijuana Establishment's collection, storage, dissemination and usage of any CORI report or background check information obtained for Marijuana

Establishment Agent registrations shall comply with 803 CMR 2.00: Criminal

Offender Record Information (CORI).

o A Marijuana Establishment shall notify the Commission no more than one business day after a Marijuana Establishment Agent ceases to be associated with the establishment. The registration shall be immediately void when the agent is no longer associated with the establishment.

o An Agent Registration Card shall be valid for one year from the date of issue and may be renewed on an annual basis on a determination by the Commission that the applicant for renewal continues to be suitable for registration.

• After obtaining a registration card for a Marijuana Establishment Agent:

o A Marijuana Establishment is responsible for notifying the Commission, in a form and manner determined by the Commission, as soon as possible, but in any event, within five business days of any changes to the information that the establishment was previously required to submit to the Commission or after discovery that a

Registration Card has been lost or stolen.

o A Marijuana Establishment Agent shall always carry a Registration Card associated with the appropriate Marijuana Establishment while in possession of

Marijuana or Marijuana Products, including at all times while at the establishment or while transporting Marijuana or Marijuana Products.

o A Marijuana Establishment Agent affiliated with multiple Marijuana

Establishments shall be registered as a Marijuana Establishment Agent by each

Marijuana Establishment and shall be issued an Agent Registration Card for each establishment.

Registration Fees

• Registration Card Fee o An applicant for a Registration Card as a Marijuana Establishment Agent, a

Laboratory Agent, or any other position designated as an agent by the

Commission shall pay a nonrefundable application fee of $100 with any such application.

• Registration Card Renewal Fee:

o An applicant for a renewal of a Registration Card as a Marijuana Establishment

Agent, a Laboratory Agent, or any other position designated as an agent by the

Commission shall pay a fee of $100.

• Finger-print Criminal Background Check Fees:

o All persons required to submit fingerprints shall pay a fee to be established by the

Massachusetts Secretary of Administration and Finance, in consultation with

Massachusetts Secretary of Public Safety and Security and the Commission, to offset the costs of operating and administering a Fingerprint-based criminal background-check system.

o The Commission may pay the fee on behalf of applicants or reimburse applicants for all or part of the fee on the grounds of financial hardship.

o Any fees collected from fingerprinting activity under 935 CMR 500.000 shall be deposited into the Fingerprint-based Background Check Trust Fund, established in M.G.L. c. 29, § 2HHH. 500.029:

Denial of a Marijuana Establishment Agent Registration Card:

• Each of the following, in and of itself, constitutes full and adequate grounds for denial of an Agent Registration Card for a Marijuana Establishment Agent, including Laboratory

Agents:

o Failure to provide the information required in 935 CMR 500.029 or 935 CMR

500.030 for an Agent Registration Card;

o Provision of information on the application that is deceptive, misleading, false or fraudulent, or that tends to deceive or create a misleading impression, whether directly, or by omission or ambiguity;

o Failure to meet the requirements set forth in 935 CMR 500.029 or 935 CMR

500.030 for an Agent Registration Card;

o Revocation or suspension of an Agent Registration Card in the previous six months;

o Failure by the Marijuana Establishment to pay all applicable fees; or o Other grounds, as the Commission may determine in the exercise of its discretion, that are directly related to the applicant's ability to serve as a Marijuana

Establishment Agent, or that make the applicant unsuitable for registration;

however, the Commission will provide notice to the applicant of the grounds prior to the denial of the Agent Registration Card and a reasonable opportunity to correct these grounds.

• The Commission may delegate a Registrants’ suitability determinations to the Executive

Director, who may appoint a Suitability Review Committee, in accordance with 935

CMR 500.800. Suitability determinations shall be based on credible and reliable information.

• Executive Director may institute a suitability review based on a recommendation from

Enforcement staff that background check information would result in or could support an adverse suitability determination. All suitability determinations will be made in accordance with the procedures set forth in 935 CMR 500.800.

Training of Marijuana Establishment Agents

• Compliance

• Standards of Procedures (SOPs)

• Industry best practices

• How to develop an employee training program and what to include

Revocation of a Marijuana Establishment Agent Registration Card

• Each of the following, in and of itself, constitutes full and adequate grounds for revocation of an Agent Registration Card issued to a Marijuana Establishment Agent, including Laboratory Agents:

o Submission of information in the application or renewal application that is deceptive, misleading, false or fraudulent, or that tends to deceive or create a misleading impression, whether directly, or by omission or ambiguity;

o Violation of the requirements of the state marijuana laws, including 935 CMR

500.000;

o Fraudulent use of a Marijuana Establishment Agent Registration Card including, but not limited to, tampering, falsifying, altering, modifying, duplicating, or allowing another person to use, tamper, falsify, alter, modify, or duplicate an

Agent Registration Card;

o Selling, transferring, distributing, or giving marijuana to any unauthorized person;

o Failure to notify the Commission within five business days after becoming aware that the Agent Registration Card has been lost, stolen, or destroyed;

o Failure to notify the Commission within five business days after a change in the registration information contained in the application, or required by the

Commission to have been submitted in connection with the application for an

Agent Registration Card, including open investigations or pending actions as delineated in 935 CMR 500.802, as applicable, that may otherwise affect the status of the suitability for registration of the Marijuana Establishment Agent;

o Conviction, guilty plea, plea of nolo contendere, or admission to sufficient facts of a felony drug offense involving distribution to a minor in the Commonwealth, or a like violation of the laws of an Other Jurisdiction; or o Conviction, guilty plea, plea of nolo contendere or admission to sufficient facts in the Commonwealth, or a like violation of the laws of another state, to an offense as delineated in 935 CMR 500.802 or 935 CMR 500.803, as applicable, that may otherwise affect the status of the suitability for registration of the Marijuana

Establishment Agent.

• In addition, a conviction of a felony drug offense in the Commonwealth, or a like violation of the laws of an Other Jurisdictions shall be adequate grounds for the revocation of a Marijuana Establishment Agent Registration Card.

• Other grounds as the Commission may determine in the exercise of its discretion, that are directly related to the applicant’s ability to serve as a Marijuana Establishment Agent, that make the Registrant unsuitable for registration. The Commission will provide notice to the Registrant of the grounds prior to the revocation of an Agent Registration Card and a reasonable opportunity to correct these grounds.

o The Commission may delegate a Registrants' suitability determinations to the

Executive Director, who may appoint a Suitability Review Committee, in accordance with 935 CMR 500.800. Suitability determinations shall be based on credible and reliable information.

o The Executive Director may institute a suitability review based on a recommendation from Enforcement staff that background check information would result in or could support an adverse suitability determination. All suitability determinations will be made in accordance with the procedures set forth in 935 CMR 500.800.

Void Registration Cards

• An Agent Registration Card issued to a Marijuana Establishment Agent, including a

Laboratory Agent, shall be void when:

o The agent has ceased to be associated with the Marijuana Establishment or

Independent Testing Laboratory that applied for and received the agent’s

Registration Card;

o The card has not been surrendered on the issuance of a new Agent Registration

Card based on new information; or the agent is deceased o A void Agent Registration Card is inactive and invalid

Suitability Standard for Registration as a Marijuana Establishment Agent

• Where to find suitability tables (935 CMR 500.802 and 500.803)

• Process for determining suitability and suitability hearing

Branding, Marketing, and Advertising

Purpose: This course will provide a comprehensive overview of how to brand, market and advertise a cannabis business, as well as labeling and packaging design of cannabis and cannabis products per 935 CMR 500.105(4) through (7).

Learning Objectives: Participants will have a clear understanding of permitted and prohibited branding, marketing and advertising requirements. Participants will also understand labeling and packaging design limitations and will develop a branding, marketing and advertising strategy and checklist for next steps.

Regulations to Cover:

• 500.105 (4-7): General Operational Requirements for Marijuana Establishments o Marketing and Advertising Requirements

Components to Consider:

• What is Branding?

• What is Marketing?

• What is Advertising?

Branding, Marketing, and Advertising Requirements

• Permitted Practices

a. A Marijuana Establishment may develop a business name and logo to be used in labeling, signage, and other materials; provided however, that use of medical symbols, images of marijuana, or related paraphernalia images, that are appealing to persons younger than 21 years old, and colloquial references to cannabis are prohibited from use in this business name and logo;

b. Sponsorship of a charitable, sporting or similar event, except that advertising, marketing, and branding at or in connection with such an event is prohibited, unless at least 85% of the audience is reasonably expected to be 21 years of age or older, as determined by reliable, current audience composition data;

c. A Marijuana Establishment may display, in secure, locked cases, samples of each product offered for sale and subject to the requirements of 935 CMR 500.110.

These display cases may be transparent. An authorized Marijuana Establishment

Agent may remove a sample of marijuana from the case and provide it to the consumer for inspection, provided that the consumer may not consume or otherwise use the sample, unless otherwise authorized herein;

d. The establishment may post prices in the store and may respond to questions about pricing. The Marijuana Establishment shall provide a catalogue or a printed list of the prices and strains of marijuana available at the Marijuana Establishment to consumers, and may post the same catalogue or printed list on its website and in the retail store;

e. A Marijuana Establishment may engage in reasonable marketing, advertising and branding practices that are not otherwise prohibited in 935 CMR 500.105(4)(b) that do not jeopardize the public health, welfare or safety of the general public or promote the diversion of marijuana or marijuana use in individuals younger than

21 years old. Any such marketing, advertising and branding created for viewing by the public shall include the statement "Please Consume Responsibly", in a conspicuous manner on the face of the advertisement and shall include a minimum of two of the following warnings in their entirety in a conspicuous manner on the face of the advertisement:

i. "This product may cause impairment and may be habit forming."

ii. "Marijuana can impair concentration, coordination and judgment. Do not operate a vehicle or machinery under the influence of this drug."

iii. "There may be health risks associated with consumption of this product."

iv. "For use only by adults 21 years of age or older. Keep out of the reach of children." or

v. "Marijuana should not be used by women who are pregnant or breastfeeding."

f. All marketing, advertising and branding produced by or on behalf of a Marijuana

Establishment shall include the following warning, including capitalization, in accordance with M.G.L. c. 94G, § 4(a½) (xxvi):

i. This product has not been analyzed or approved by the Food and Drug

Administration (FDA). There is limited information on the side effects of using this product, and there may be associated health risks. Marijuana use during pregnancy and breastfeeding may pose potential harms. It is against the law to drive or operate machinery when under the influence of this product. KEEP THIS PRODUCT AWAY FROM CHILDREN. There may be health risks associated with consumption of this product. Marijuana can impair concentration, coordination, and judgment. The impairment effects of Edible Marijuana Products may be delayed by two hours or more. In case of accidental ingestion, contact poison control hotline 1-800-222-

1222 or 9-1-1. This product may be illegal outside of MA.”

• Prohibited Practices

a. Advertising, marketing, and branding in such a manner that is deemed to be is deceptive, misleading, false or fraudulent, or that tends to deceive or create a misleading impression, whether directly or by omission or ambiguity;

b. Advertising, marketing and branding by means of television, radio, internet, mobile applications, social media, or other electronic communication, billboard or other outdoor advertising, or print publication, unless at least 85% of the audience is reasonably expected to be 21 years of age or older as determined by reliable and current audience composition data;

c. Advertising, marketing, and branding that utilizes statements, designs, representations, pictures or illustrations that portray anyone younger than 21 years old;

d. Advertising, marketing, and branding including, but not limited to, mascots, cartoons, brand sponsorships and celebrity endorsements, that is deemed to appeal to a person younger than 21 years old;

e. Advertising, marketing, and branding, including statements by a Licensee, that makes any false or statements concerning other Licensees and the conduct and products of such other Licensees that is deceptive, misleading, false or fraudulent, or that tends to deceive or create a misleading impression, whether directly or by omission or ambiguity;

f. Advertising, marketing, and branding through certain identified promotional items as determined by the Commission including, but not limited to, gifts, giveaways, discounts, points-based reward systems, customer loyalty programs, coupons, or

"free" or "donated" marijuana;

g. Advertising, marketing, and branding by a Licensee that asserts that its products are safe, or represent that its products have curative or therapeutic effects, other than labeling required pursuant to M.G.L. c. 94G, § 4(a½) (xxvi), unless supported by substantial evidence or substantial clinical data with reasonable scientific rigor as determined by the Commission;

h. .Advertising on any billboards, or any other public signage, which fails to comply with all state and local ordinances and…