Metro

Who will get to regulate new Mass. pot industry?

State Treasurer Deborah B. Goldberg. Suzanne Kreiter/Globe staff

Suzanne Kreiter/Globe staff/file

State Treasurer Deborah B. Goldberg.

In a new skirmish in the political war over regulating retail marijuana in Massachusetts, the state treasurer is asking lawmakers for $10 million to pay for upfront costs and arguing against legislative efforts to strip her office of cannabis oversight responsibility.

Deborah B. Goldberg, Massachusetts’ top marijuana regulator, is scheduled to testify Monday before the Legislature’s Joint Committee on Marijuana Policy, noting her office has spent substantial time preparing to oversee the industry and readying an infrastructure to protect public health and safety.

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“It would be very difficult to start from scratch all over again,” the Brookline Democrat said in an interview, and doing so “would probably cost more for the taxpayers.”

Several legislators have floated the idea of taking Goldberg’s authority away or diluting it significantly. And at least one bill before the committee does just that.

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In draft testimony, Goldberg notes that the treasurer’s office has spent hundreds of hours learning about the industry and its regulation, and now has expertise. Her staff has traveled across the country to conduct on-the-ground research.

And her office has already developed budget plans and organizational charts, as well as lists — of potential commissioners to oversee the industry, and of qualified companies to track marijuana from seed-to-sale to thwart the drug from being diverted to the black market.

In the draft testimony, she also points out the nuts-and-bolts considerations of creating a new bureaucratic agency.

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Current law — which legalized adult possession and use of marijuana — calls for her to appoint a three-person Cannabis Control Commission to oversee the details of retail pot in Massachusetts. That commission must create a slew of regulations on everything from advertising to measures to keep the drug out of the hands of children.

Three marijuana commissioners, an executive director, a chief investigator, and other professional staff must be hired. “Those personnel will need offices, computers, and other equipment to do their jobs,” Goldberg is expected to say Monday, noting that officials in her office are already working to find the new agency physical space.

Although Goldberg was personally opposed to legalization, her office began preparing for it months before the Nov. 8 vote. She had said before the vote that if the measure passed, the Legislature ought to delay retail sales and restrict marijuana edibles, among other actions.

On Friday, House Speaker Robert A. DeLeo praised the work of Goldberg and her staff in preparing to oversee the commercial marijuana industry.

“On the other hand,” he said on Boston Herald Radio, “I’d be remiss if I didn’t say I think we ought to wait for the committee on marijuana to come back with their recommendations in terms of what type of structure is going to be set up.”

Senator Jason M. Lewis, who authored a bill that would take away much of the treasurer’s authority on regulating retail sales, said it’s not about Goldberg or her staff, who he believes have done a “great job.”

But the Winchester Democrat said the marijuana oversight authority should be appointed by several elected officials, rather than just one. That’s meant to dilute any one elected official’s power and minimize the influence the industry might have over regulators.

The decisions those regulators make will have an enormous impact on industry profits, and he said he wants to ensure public health is put ahead of financial gain.

Lewis also said a three-member commission doesn’t provide the necessary expertise to regulate such a complicated industry — which involves issues ranging from agriculture to addiction to law enforcement — and needs more members. That, he said, bolsters the case for dispersing power over who gets to appoint them.

Goldberg is asking for $10 million in the fiscal year that runs from July through June 30, 2018. Commercial marijuana shops are expected to open in July 2018, so the state won’t see any tax revenue from retail sales until next summer.

Goldberg’s $10 million funding request includes $2.6 million in yearly personnel costs, $5.8 million in administrative expenses, and other costs for facilities, equipment, and consulting, according to a draft budget obtained by the Globe.

She argues that the amount — small in a more than $40 billion state budget — is reasonable, pointing to benchmarks set by other states.

Washington state, among the eight states where voters have approved marijuana legalization, budgeted $7.4 million for regulation startup costs, ranging from staff to technology to consultants.

Increasing regulation of Nevada’s retail pot industry will cost about $14 million over two years, authorities there say.

Goldberg is also poised to testify about the pot tax in the voter-passed law, implicitly arguing it is too low and calling the rate, 3.75 percent on retail sales, an “immediate cause for concern.”

That’s among the areas on which the Legislature is likely to agree with her. DeLeo and Senate President Stanley C. Rosenberg, both Democrats, have said they are open to raising the tax rate on retail sales of the drug. The Baker administration, anchored in a no-new-taxes philosophy, has been more circumspect.

The voter-passed law not only creates a 3.75 percent tax, but it also gives cities and towns the option to add an additional 2 percent tax on sales. That would be in addition to the state’s 6.25 percent sales tax. The marijuana levy, however, would be much lower than in other states where voters have legalized the drug. Washington State imposes a 37 percent tax, for example.

Legalization proponents estimate the tax would bring in $100 million of state tax revenue in 2020. They say the rate is meant to be low enough to quickly snuff out the black market. Higher taxes, they argue, would encourage people to keep buying from dealers on the unregulated market.

The advocates who wrote and passed the legalization ballot measure are likely to testify that any changes to the law put in place by 1.8 million voters would be undemocratic, thwarting the will of the people.

They also will probably testify that legislators should give Goldberg the money to immediately get the Cannabis Control Commission running, rather than spending months tinkering with the law. They are expected to say changes, if necessary, should be made after commission has had time to do its work.

Other officials from a variety of state government offices are also scheduled to testify before the committee, which is chaired by Representative Mark J. Cusack, a Braintree Democrat, and Senator Patricia D. Jehlen, a Somerville Democrat.

The director of the municipal law unit in the office of Attorney General Maura Healey is set to speak about the way the pot statute intersects with cities and towns, according to a person familiar with the testimony.

Assistant Attorney General Margaret Hurley is expected to ask the Legislature to make sure local officials have clarity in how they may — or may not — regulate commercial recreational marijuana establishments in their communities, and establish temporary moratoriums on retail sales.

Officials at the Department of Public Health, the Department of Revenue, and the Gaming Commission are also expected to speak.

Growing, possessing, giving, and using limited amounts of marijuana became legal Dec. 15 of last year.

Shops were originally slated to open by January 2018, but just after Christmas, the Legislature — with no public hearings and no formal public notice — delayed that date by six months. Marijuana remains illegal under federal law.

Material from the Associated Press was used in this report. Joshua Miller can be reached at joshua.miller@globe.com.
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