Cigarette wholesalers in Massachusetts are seeking to gain a foothold in the state’s nascent recreational cannabis industry, asking state regulators to require cannabis producers to sell all their products through them, according to a Boston Globe report. The wholesale companies argue that they already have the technology and know-how to safeguard products, making diversion more difficult.
Paul Caron, director of the Northeast Association of Wholesale Distributors, a tobacco trade group, said association members are “willing to collect all the taxes on behalf of the state and stamp any marijuana product being distributed for sale.”
“Rather than reinvent the wheel, let’s use the most successful, proven encrypted tax stamp program we have: the one assigned to cigarettes,” he said in the report.
Jim Borghesani, communications director for the Yes on 4 campaign, which led efforts to legalize cannabis for adult use in the state, said the “last thing” Massachusetts needs is “another three-tiered commerce system that gouges consumers and enriches middlemen.” He pointed to cannabis-specific systems utilized in other state programs as evidence that a three-tiered system is unnecessary.
If the tobacco companies get their way, Massachusetts’ cannabis industry would look similar to the state’s alcohol industry – wherein alcohol must pass through a wholesaler before making it to bars and package stores where it’s sold.
Will Luzier, another Yes on 4 official, said if the tobacco lobby gets their way, “dispensaries would have to sell the product they grew as a cultivator to these distributors, and then buy it back from them as a retailer on the other end.”
“I don’t see any sound public policy reason why it’s important to do that, other than to benefit the tobacco industry,” he said.
Caron, a former state legislator, has made the pitch to his former colleagues and Treasurer Deborah Goldberg, who will oversee the Cannabis Control Commission. Caron has also lobbied to be appointed as one of the three members of the commission.
A state Treasury official, who was unnamed in the report, indicated regulators are skeptical of Caron’s proposal because the system that handles tobacco products, SICPA, would likely not be a great tool for cannabis products – which aren’t as uniform as packs of cigarettes and subject to daily price fluctuation.
Recreational sales are expected to begin in Massachusetts the summer of 2018.
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