WARWICK – The state Cannabis Control Commission on Friday gave preliminary approval to a new method of choosing applicants for additional retail cannabis stores.
When businesses would be able to apply for the licenses, however, remains the big unknown.
But Cannabis Commission Chairwoman Kim Ahern assured about 40 industry participants attending its meeting that the commission is moving as fast as possible to get rules and regulations written, and applications ready, to avoid further delay.
Which is a key reason, she said, she supported a new approach to choosing those license holders who will eventually run up to 24 new retail-only stores.
How will the state dole out new retail cannabis licenses
Under the new licensing plan, the commission would rely on a “hybrid” selection process.
It would use both a “merit-based” scoring system to form a pool of qualified applicants – those showing they had a location, local zoning approval and money already in hand.
Then there would be a lottery to choose the license winners from that pool.
Previous license system came under fire
State cannabis regulators used a lottery system in 2021 to award six new medical marijuana dispensary licenses.
But that system came under criticism from some stakeholders, who said some of the winners weren’t yet ready to open a dispensary. In fact, two of those winners never opened because of complications with zoning and financing.
Mariana Ormonde, chief of legal services for the commission, outlined what commission staff had found while researching how licenses were awarded in other states.
She said states that used just a merit-based system faced more risks of litigation when losing businesses allege favoritism.
And those lawsuits delayed or shut down the process of awarding more licenses.
“Selecting applications based wholly on merit in a small state fosters the appearance of favoritism and/or impropriety in the selection process,” Ormonde said.
In addition, “there is difficulty in creating an appropriately weighted, merit-based application in which scoring cannot be challenged as arbitrary or capricious.”
Ormonde also found that big, “multi-state operators with established financial and legal resources have advantage in merit-based licensing over local businesses, start-ups and social equity applicants.”
What comes next for retail cannabis in Rhode Island?
Currently in Rhode Island, cannabis users can buy from seven dispensaries, but the 2022 law that legalized recreational use allowed for an additional 24 retail-only stores.
They would be spaced around the state, with six licenses saved for so-called “social-equity” applicants and another six for worker-owned cooperative stores.
Rhode Island also has 60 licensed cultivators who supply cannabis to the dispensaries.
Four of them spoke Friday, all urging the commission to move as fast as possible so they would have more opportunity to sell their product and stay in business.
And all favored the “hybrid” approach to awarding licenses.
“It’s really important to demonstrate these companies can operate when they get their licenses,” said grower Sasha Gorski.
Cultivator Peter Kasabian said he participated, and lost, in the 2021 lottery for medical marijuana licenses. But he was “shocked at how transparent it was. Let’s do it again.”
But make sure first, he said, that each of the lottery applicants has already demonstrated they’re ready to operate a retail store as soon as they win a license.
H/T: www.providencejournal.com
