A group from the Massachusetts Cannabis Coalition testified before the Joint Committee on Cannabis Policy on Wednesday, Oct. 30, 2024, to describe the issues marijuana companies have had with the Cannabis Control Commission.
The Cannabis Control Commission failed to collect about $550,000 in prorated license fees and up to $1.2 million in potential provisional licensing fees between August 2022 and August 2024, according to a state investigation.
The Office of the Inspector General sent a letter Thursday advising the commission’s leadership to conduct an audit to confirm all licensees paid their applicable fees.
The Cannabis Control Commission (CCC) did not immediately respond to Masslive’s request for comment.
“I recognize that neither of you held leadership positions at the CCC during that two-year period, but as the CCC’s current leaders, you must definitively act on the recommendations in this letter,” Jeffrey S. Shapiro, the inspector general, said in a statement.
“Our investigation did not find any suggestion of fraud, but it did reveal an egregious operational breakdown that underscores the need for statutory reform,” he continued. “We are pleased to learn that the CCC has recently worked to update the agency’s payment systems and has begun to recoup previously uncollected fees.”
Still, he said it is essential to do an audit to ensure all current licensees paid all applicable fees and understand what revenue went uncollected, as businesses ceased operations.
The investigation was launched in July after the agency received a hotline complaint that claimed the CCC wasn’t collecting the required fees. At that time, it wasn’t clear if this was an operational issue or if fraud played a role.
The CCC commissioners voted unanimously in August 2022 to allow the executive directors of marijuana dispensaries to extend their license expiration dates by up to 120 days. The licensee had to pay a prorated fee to cover the extension period.
But, the inspector general said they found that not only did the CCC not collect the prorated fees, they also granted license extensions without the authority to do so.
This resulted in about $550,000 of revenue lost during the two-year period, the inspector general said.
“Current leadership has indicated that the CCC has since begun collecting these prorated licensing fees,” the inspector general said.
Also, for almost two years, the CCC didn’t collect up to $1.2 million in potential fees from over 120 provisional license applicants, the inspector general said. When the CCC approves a provisional license application, the applicant has to pay a required fee within 90 days.
If an applicant doesn’t pay their fee, the license approval expires, and the applicant has to restart the process, according to the inspector general.
“It is difficult to calculate the exact amount of uncollected fees since some applicants opt not to continue the application process and, therefore, purposely let their application lapse,” the inspector general said.
H/T: www.masslive.com
