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The Deeper Dig: Can cannabis giants be contained?

The Deeper Dig: Can cannabis giants be contained?

As Vermont lawmakers continue a push to tax and regulate recreational marijuana, an emphasis on lifting up small Vermont businesses has been constant.

Meeting on Friday with the House Committee on Government Operations, Sen. Dick Sears said S.54, one of two proposals to establish a retail market for recreational pot, takes a “uniquely Vermont approach.”

Under the bill, regulators would prioritize small, local producers when deciding who to license as part of the new system. “We’re hopeful that the regulations…will result in something similar to the craft brewery industry in Vermont,” Sears said.

These provisions were modeled in part on similar efforts by Massachusetts lawmakers to create a fair system in that state, where recreational dispensaries first opened last November.

But a new series by the Boston Globe’s Spotlight team shows that large, well-funded marijuana companies are exploiting loopholes in Massachusetts’ system in order to seize control of the state’s burgeoning market.

“When there’s an $80 billion opportunity sitting out there, Wall Street, and private equity, and folks in those businesses are generally going to try to make a profit at it,” said Beth Healy, whose team reported on the “hidden titans of Mass. marijuana” last week.

Two rival companies — Sea Hunter and Acreage Holdings — are telling investors that they control marijuana businesses licensed to several smaller companies. While Massachusetts law prohibits one entity from holding more than three marijuana licenses, these companies are angling to control up to a dozen. (Both denied to the Globe that they have controlling relationships with companies in their networks.)

Other states with dispensary systems, like Maryland, Colorado and California, have seen large companies bend the rules on licensing caps.

“I think a lot of people thought there was supposed to be an element of fairness and social equity baked into this,” Healy said. “But it’s still very tough to get small businesses up and running in Massachusetts.”

On this week’s podcast, Healy explains how cannabis companies are pushing the limits in Massachusetts — and what Vermont policymakers could learn from it.

Full story is available here.

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