Advertisement 'Full-fledged' pot industry won't be running by 2018, commission head says Share Shares Copy Link Copy

The growing state marijuana regulatory agency needs more money before the Legislature breaks for the holidays in four weeks, but doesn't yet know just how much it needs to ask for.The Cannabis Control Commission met Tuesday to begin assembling its budget, working off a spreadsheet Chairman Steven Hoffman put together assuming a total agency headcount of roughly 40 people working at estimated salaries developed by the treasurer's office. He said the first priority is to iron out a supplemental budget request for this fiscal year."We have two separate budget issues that we need to resolve: one is we need a supplemental appropriation for the remainder of this fiscal year which we're working on and we need to get ourselves incorporated into the state's budgeting process for fiscal 2019," Hoffman said.The Executive Office of Administration and Finance transferred $500,000 from the Cannabis Costs Reserve to the CCC last month to support start-up costs for the commission, including payroll for the five commissioners. The fiscal year 2018 budget included $2 million for the Cannabis Cost Reserve, though Treasurer Deborah Goldberg has said the commission will need an annual budget of roughly $10 million to properly oversee the new industry.Hoffman said he expects to have a "pretty good budget" ready within two weeks and said the commission is aiming to secure funding before formal legislative sessions come to a halt for the year after Nov. 15."We're desperately trying to do that. That's the deadline that we're trying to hit and we're going to get there," Hoffman said, adding that he's met with the comptroller's office and the Executive Office of Administration and Finance. "We've also had preliminary meetings with the speaker, the president of the Senate, Ways and Means of both houses, so we've already started the dialogue and they know exactly what we're trying to do and what the timeline we're working on is. I'm very confident, but we have to hit it before they break for their holiday."A sizeable chunk of the CCC's supplemental budget request will be funding for technology development. Hoffman said the commission needs that money this fiscal year in order to have marijuana and revenue tracking programs in place before retail sales start. Of the treasurer's $10 million budget estimate, Hoffman said, $5 million was for technology development."I am not prepared to comment on whether that is too high, low or right," Hoffman said.In developing its budget Tuesday, the CCC discussed how many people they expect to need to hire to assist them in writing regulations and what they expect the agency to look like once it is running at full steam.But money is also relatively scarce within the state budget as evidenced by soaring health care costs and spending cuts in the face of anemic tax growth, something former Sen. Jennifer Flanagan reminded the commission of."We have to be cognizant of the fact that we still need to ask for money and given that there is a -- and I don't mean to sound like a legislator -- but there's a deficit, the Legislature is looking at the FY19 budget and we need to be cognizant of the money that we don't have right now," Flanagan, who was appointed to the CCC by Gov. Charlie Baker, said.Hoffman said he is also cognizant of the fact that the CCC is expected to bring in enough in revenue to cover the costs of its operations, and then some. The CCC is also working to produce a forecast of expected marijuana revenues, based on an estimate released earlier this year by the Department of Revenue."They did their forecast based on the initiative that was passed in November as opposed to the legislation that was signed by the governor in July and the tax rate changed pretty significantly," Hoffman said. "So we have to update that, but I think it's a pretty good foundation."Part of the revenue forecast will be to estimate how quickly retail marijuana shops will open in Massachusetts and how much revenue might increase as more stores come online, Hoffman said."We will not have a full-fledged industry up and running on July 1 of 2018. I hope that is not a surprise to anybody," he said. "We will have things up and running in 2018, but there is going to be a ramp and we need to kind of estimate how long that ramp is and how steep it is."Asked after the meeting if there will be retail marijuana facilities open come July 1, Hoffman said, "yes, yes, correct, yeah, absolutely."