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State overhauls rules for medical marijuana outlets

Massachusetts health authorities Friday dramatically overhauled the process for granting licenses for medical marijuana dispensaries, aiming to streamline the system and remove politics.

Regulators from the administration of Governor Charlie Baker said the revamped licensing strips away the subjectivity and secrecy that had tainted the system under former governor Deval Patrick’s tenure. Controversy surrounding the previous system sparked more than two dozen lawsuits, leaving patients without any dispensaries 2½ years after voters approved marijuana for medical use.

“This change creates a more streamlined, efficient, and transparent process that allows the Commonwealth to maintain the highest standards of both public safety and accessibility,” Dr. Monica Bharel, the state’s public health commissioner, said in a statement.


Several marijuana company leaders said they were already prepared to reapply, signaling the start of what is likely to be a long line of applicants. While the 2012 state law capped the number of licenses awarded in the first year to 35, that period is now passed, and regulators are free to exceed that limit.

Just 15 dispensaries have received licenses to date, but none has opened.

Under the revised guidelines, dispensaries will be licensed in a format similar to other health care facilities, such as pharmacies. Each application will be judged on its merits using clear guidelines and will move forward when the company meets the overhauled standards, officials said. The old system involved scoring, essentially pitting applications against each other.

The health department will begin accepting applications June 29, and regulators said they will consider them in the order received.

Among the more notable changes: The department will make staff available to applicants throughout the process to provide technical support, according to the new guidelines. Marijuana company executives had complained about a lack of communication by state officials during the Patrick administration.


“Kudos to the Baker administration for changing things around that make a lot more sense,” said Catherine Cametti, known as Rina, a Walpole resident whose dispensary application received high marks under the old process but then was abruptly derailed by regulators when a background check found problems with one member of Cametti’s team.

The new system will retain several features from the previous one, including required letters of support from the community in which a company intends to locate a dispensary, and mandatory background checks on nearly everyone associated with a dispensary company.

But this time, the rules specify which offenses in an executive’s background will prevent the company from including that individual. The rules also allow companies to remove the person found to have an unsavory past, without jeopardizing the company’s application.

Problematic background checks wreaked havoc with the licensing process previously. Some companies were inexplicably knocked out of the running for problems found with an executive team member’s background, while others were awarded licenses despite problems.

“The last time, there were so many unknowns, and I felt they were changing things as they went along, and there were a couple of curve balls thrown in,” Cametti said. “To know what you are dealing with ahead of time is really important.”

Cametti said her company, Beacon Wellness Center, intends to apply again, probably in Norfolk County.

The Denver company Good Chemistry also said it intends to reapply. Good Chemistry had been awarded provisional licenses for dispensaries in Boston and in Worcester, then had them yanked away amid questions about the company’s local support.


“This appears to be a much more open and fair process,” said Jim Smith, a Boston attorney who represents Good Chemistry.

Smith said the company retained the site it had selected in Worcester for a dispensary, but has not made a decision about whether it would apply for an additional location.

Medical Marijuana of Massachusetts, the company once led by former US representative William D. Delahunt, also appears poised to move forward. The firm was stripped of three provisional licenses because of questions about its financial structure. Delahunt has since left the company.

Medical Marijuana of Massachusetts originally intended to give up to 50 percent of revenues to a management company run by the same executives as the marijuana firm, a plan regulators prohibited after it was detailed in the Globe.

Concerns about management structure plagued the old licensing process, with some companies losing licenses because they used related management firms, while others were allowed to proceed.

The new system provides guidelines about the use of outside management companies, suggesting that the marijuana companies keep management payments reasonable and within “fair market” values.

Jonathan Herlihy, chief executive of Medical Marijuana of Massachusetts, applauded the guidelines.

“Overall, I would say this new system is very, very good,” Herlihy said.

His company was one of dozens that sued state regulators over the licensing process, and a judge last month ordered officials to let Medical Marijuana of Massachusetts go ahead with plans to open dispensaries in Mashpee and Plymouth, ruling it was improperly stripped of licenses last year.


Kay Lazar can be reached at Follow her on Twitter @GlobeKayLazar.