Starting a recreational or medical cannabis company in Massachusetts? We’ve put together a guide covering everything from available license types to fees, local rules, and what you should include in a Massachusetts cannabis business plan. Jump to a section by clicking below, or go straight to our sample cannabis business plan.
Since question 3 passed in 2012, Massachusetts adults can possess up to 10 ounces of cannabis for medicinal use every 60 days if they have an electronic recommendation from a doctor or nurse. More than 93,000 patients have registered for medical marijuana use. Massachusetts medical marijuana sales for 2021 could be as high as $300 million.
Thanks to question 4’s passage in 2016, Massachusetts adults 21 and over can possess up to 10 ounces of cannabis for recreational use--including up to one ounce in public. Businesses can grow and sell recreational and medical marijuana and products, as long as edibles don’t look like candy and aren’t shaped like a fruit, animal, or person. Recreational cannabis sales via Massachusetts dispensaries could reach $1.4 billion in 2021. People can grow up to 6 marijuana plants per person at home (maximum of 12 per household), either for medicinal or recreational use.
Medical Treatment Center: These are vertically-integrated cannabis businesses, meaning they grow and sell cannabis products to medical patients only.
Retailer: These are recreational dispensaries where consumers over the age of 21 can purchase marijuana products.
Cultivator: Marijuana cultivators, also called grow operations, grow cannabis plants indoors or outdoors for recreational or medical use. They might also process and package the product. Marijuana is then either sold through a dispensary or sold to a product manufacturer. Standalone medical grow operations are not allowed in Massachusetts.
Craft Marijuana Cooperative: A craft cooperative is a specific type of cannabis cultivator; like the standard cultivators, they can grow, package, process cannabis for sale to other cannabis establishments but not to the general public. Coops are limited to a total canopy of 100,000 square feet and must abide by the principles established by the International Cooperative Alliance (see here for a list of principles)
Product manufacturer: Cannabis manufacturers produce items like edibles, capsules, and oils. In Massachusetts, these manufacturers can wholesale or transfer these products to dispensaries, but not directly to the public.
Independent testing lab: Consumers and regulators alike demand consistency and quality control in cannabis products, which creates demand for marijuana testing labs. These labs use methods like liquid or gas chromatography to analyze products for CBD and THC content, pesticides, terpenes, bacteria, fungi, and heavy metals, to name a few.
Transporter: These businesses securely transport cannabis between marijuana establishments. They can be third-party companies, or they can be licensed cannabis cultivators or retailers that wish to also obtain a transporter license.
Delivery-Only: Delivery-only licensees can transport marijuana products from a marijuana retailer to the customer’s residential address. Delivery-only licensee cannot also operate a retail establishments. These licenses are limited exclusively to social equity program participants until 2022.
Research Facility: A research facility can’t sell marijuana, but it can grow and purchase it for research. Examples of marijuana research facilities could be a college, nonprofit, or corporation. No one under 21 can do cannabis research.
Microbusiness: This can be a Tier 1 cannabis cultivator (up to 5,000 square feet of canopy), product manufacturer (purchasing up to 2,000 pounds of marijuana per year), or both.
If you don’t want to grow, sell, manufacture, or test cannabis, you still have plenty of options. You can create an app, payment processing service, advertising and branding agency, ad network, consulting firm, pest management product, automated plant watering system, security service, or packaging and labeling service--the possibilities are endless.
Local governments may forbid cannabis companies or certain locations, so check city and county regulations.
Application fees: For recreational marijuana businesses, the application fee is $100 to $2,000 for cultivation (based on grow size and type--see page 10 of this PDF) and $1,500 for a retail store, testing lab, product manufacturer, transporter (including delivery-only), or microbusiness. For medical marijuana businesses in Massachusetts, the application fee is $3,500..
License fees: Medicinal cannabis companies must pay a $50,000 license fee in Massachusetts whether it’s a new or renewed license. Recreational cannabis retailers, product manufacturers, delivery-only licensees, and testing labs must pay a (much lower) $10,000 license fee. Recreational cannabis cultivators and craft cooperatives pay a license fee ranging from $625 to $50,000 (based on grow size and type--see page 10 of this PDF). Recreational cannabis microbusinesses only have to pay half the fee they would normally pay.
Working capital: Massachusetts requires medical marijuana companies to have at least $500,000 in working capital.
“Host community agreements”: Some Massachusetts cities require medical dispensaries to pay five- or six-digit fees as part of a “host community agreement” allowing them to operate there.
Monthly tracking system fee: Massachusetts requires cannabis companies (except for microbusinesses) to pay a monthly fee to use seed-to-sale tracking, an electronic system to document cultivation, growth, harvest, preparation, and sale of cannabis products.
A business plan is not required to get a medical marijuana business license in Massachusetts, but it will certainly make the process easier. Your application already has to include a management and operations profile, sources of capital, proposed business timeline, municipality certification, and plans for security, storage, transport, inventory, quality control, personnel, record-keeping, training, and diversity. Some of these naturally overlap with a business plan, so be smart and develop your business plan first, and your application will be easier and much more thorough. And if you plan on raising funding from investors, you definitely need a business plan.
Confused or overwhelmed yet? That’s normal. With such a highly regulated industry, and one with different rules in every state, starting a cannabis company can be very complex. Get help with your cannabis business plan from Masterplans, the industry leaders. We’ve worked with hundreds of cannabis entrepreneurs like yourself to create investor-ready documents and presentations so you can not only meet regulations but get the funding you need. Click below for your free, confidential consultation: