At first glance, Apex Noire’s lawsuit to block Soul Cannabis from opening on the other side of Faneuil Hall Marketplace might seem like a simple salvo from one rival pot shop to another.
But the suit filed last month in Suffolk Superior Court underscores an issue much bigger than a feud between two competing businesses: When it comes to downtown Boston, how many cannabis stores are too many?
Boston’s zoning rules say a new marijuana retailer shall not open within a half-mile of an existing one. In practice, it’s quite different: The Zoning Board of Appeal has granted a number of variances to that buffer rule, primarily to reach a state-mandated minimum of 52 cannabis dispensary licenses within the city and to keep pace with a city rule that half of the licenses go to equity applicants, such as people of color or those in communities unduly affected by the federal government’s “war on drugs.”
As a result, downtown has become a major marijuana marketplace.
On Milk Street, you’ll see Cannabist, the oldest of the bunch given its start as a medicinal shop before adding recreational use transactions after voters legalized broader retail sales in 2016. Around the corner, on Devonshire, there’s Pure Oasis. Head toward the Rose Kennedy Greenway, and you’ll find Apex Noire on State Street, run by former city councilor Tito Jackson, as well as Primitiv, recently launched by former pro football player Gosder Cherilus on High Street, while Rasta Rootz is destined for Broad Street. Multistate chain Curaleaf has applied to open one in a former CVS on Winter Street, near the Boston Common. Ascend opened in 2021 on Friend Street, across from the TD Garden.
And then there’s Soul Cannabis, planned for the former Durgin-Park restaurant space at Faneuil Hall Marketplace.
Its application prompted Kathleen Joyce, chair of the Boston Cannabis Board, to call for a timeout on downtown dispensaries last November. Joyce said she liked some of the proposal’s unique traits, including its music focus. It would feature a recording studio, and one of the equity partners is Michael Bivins of New Edition and Bell Biv DeVoe. But Joyce expressed concerns about the density of shops, and wanted a market saturation report first.
By that point, the rush for cannabis gold was in full swing. Wholesale prices were crashing statewide amid a glut of supply. Remember the long lines at New England Treatment Access in Brookline four years ago? Now, NETA has many competitors in Greater Boston. It’s rare to see a big crowd at a dispensary anymore.
The city’s cannabis board hired consultancy Whitney Economics, which concluded that plenty of room remains in Massachusetts for more marijuana retailers. Founder Beau Whitney told the board in March that his analysis showed the same is true for the city of Boston, but that neighborhood-specific data was not available. Later in that meeting, the cannabis board approved the Soul Cannabis application on the condition that the ZBA waives the buffer requirement — something the ZBA did in August.
Tito Jackson didn’t need a consultant to conclude that downtown has reached its tipping point. Jackson spent three years on permitting, financing and renovations to launch Apex Noire, which opened in February. One of the attractions of his State Street location is its proximity to Faneuil Hall Marketplace just a block away.
His lawsuit argues that the ZBA exceeded its authority in exempting Soul Cannabis from the half-mile buffer because it did not cite any “special circumstances or conditions” that applied to the Durgin-Park site to justify the variance.
In an interview, Jackson points instead to market dynamics. He said he is fighting for the jobs of his 20 employees, and wants to ensure his business can be financially sustainable. Once complete, Jackson said his seven-story shop will offer a unique experience, combining retail sales with an edibles factory and a roof-deck bar and lounge.
Jackson’s business shares several key traits with Soul Cannabis: Both are equity applicants, giving them special consideration by the city. Both hope to offer areas where consumers can actually use products on-premise. (”Social consumption” is not allowed now, though the state Cannabis Control Commission is working on rules to allow it.) And, just like Soul Cannabis, Apex Noire needed a ZBA variance from the half-mile rule.
Soul Cannabis chief executive Eric Lawrence, meanwhile, said city regulators should treat downtown differently when applying that rule, because the central business district draws hordes of daily commuters, not to mention millions of tourists every year.
He views his proposal as dovetailing nicely with the Wu administration’s plans to revive Faneuil Hall and the downtown in general. Soul Cannabis won’t even open for another a year or two, he added, giving any competitor enough time to develop and secure a solid customer base. There’s more than enough foot traffic, he added, to support multiple dispensaries.
Michael Nichols, president of the Downtown Boston Business Improvement District, is starting to wonder about that.
Nichols believes the BID should help any dispensary looking to open within its borders — if it’s not in an area that raises public safety concerns, such as the Tremont Street corridor where the bulk of the BID’s police calls take place. Nichols knows Pure Oasis co-owner Kobie Evans has been public about his concerns regarding the market saturation, calling the situation “very, very scary” in a recent Globe article because of the increasing competition. With so many dispensaries downtown already, Nichols said, it’s hard to see how new entrants can succeed.
The City Council’s half-mile buffer may have been well-intentioned but has become impractical given the city’s ambitious equity goals and the fact dispensary owners often prefer to open in walkable business districts. But it does create the potential for a legal quagmire, giving competitors grounds to challenge variances issued by the ZBA to get around it. For example, Lawrence last year sued over a variance granted for a rival to his shop in Allston, though he said the situations are quite different from what’s happening at Faneuil Hall because so many more people walk by the downtown spots, and the two Allston locations are much closer to each other.
Kate Dineen, chief executive at business group A Better City, praised city officials for trying to fill vacant downtown storefronts and provide jobs for people and communities negatively affected by drug laws. But they risk business closings and more vacant stores, she added, if they approve too many. It’s shaping up to be a tough balance to strike.
So has downtown reached its saturation point?
Maybe a Superior Court judge or another consultant’s report will solve that riddle.
Or maybe market economics will provide the answer.