935 CMR 501.104 - Notification and Approval of Changes

(1) Prior to making the following changes, an MTC shall submit a request for such change to the Commission and pay the appropriate fee. No such change shall be permitted until approved by the Commission or in certain cases, the Commission has delegated authority to approve changes to the Executive Director. Failure to obtain approval of such changes may result in a License being suspended, revoked, or deemed void.
(a) Location Change. Prior to changing its location, the MTC shall submit a request for such change to the Commission.
(b) Ownership or Control Change.
1. Ownership Change. Prior to any change in ownership, where an Equity Holder acquires or increases its ownership to 10% or more of the equity or contributes 10% or more of the initial capital to operate the MTC, including capital that is in the form of land or buildings, the MTC shall submit a request for such change to the Commission.
2. Control Change. Prior to any change in control, where a new Person or Entity Having Direct or Indirect Control should be added to the License, the MTC shall submit a request for such change to the Commission prior to effectuating such a change. An individual, corporation, or entity shall be determined to be in a position to control the decision-making of an MTC if the individual, corporation, or entity falls within the definition of Person or Entity Having Direct or Indirect Control.
(c) Structural Change. Prior to any modification, remodeling, expansion, reduction or other physical, non-cosmetic alteration of the MTC, the establishment shall submit a request for such change to the Commission.
(d) Name Change. Prior to changing its name, the MTC shall submit a request for such change to the Commission. Name change requests, and prior approval, shall apply to an establishment proposing a new or amending a current doing-business-as name.
(e) Court Supervised Proceedings. Notification and approval requirements with respect to Court Appointees and Court Supervised Proceedings are detailed in 935 CMR 501.104(3).
(2) The Executive Director of the Commission may approve, provided the Executive Director gives the Commission timely notice of his or her decision:
(a) A Location Change;
(b) A Name Change;
(c) Any new equity owner, provided that the equity acquired is below 10%;
(d) Any new Executive or Director, provided that the equity acquired is below 10%;
(e) A reorganization, provided that the ownership and their equity does not change; and
(f) Court Appointees, as detailed in 935 CMR 501.104(3).
(3) Court Supervised Proceedings.
(a) Commission Petition.
1. The Commission or its delegee may seek to file a petition where there is an imminent threat or danger to the public health, safety or welfare, which may include one or more of the following:
a. Notice of violations of state or federal criminal statutes including, but not limited to, M.G.L. c. 94C, §§ 32 and 34;
b. Noncompliance with or violations of its statute or regulations such that the imposition of fines or other disciplinary actions would not be sufficient to protect the public;
c. Conditions that pose a substantial risk of diversion of Marijuana or Marijuana Products to the illicit market or to individuals younger than 21 years of age who do not possess a valid pediatric Patient Registration Card issued by the Commission;
d. Conditions that pose a substantial risk to Patients;
e. Violations of testing or inventory and transfer requirements such that the Commission cannot readily monitor Marijuana and Marijuana Products cultivated, manufactured, transported, delivered, transfer, or sold by a Licensee; or
f. Other circumstance that the Commission or its delegee determines possess an imminent threat or danger to public health, safety, or welfare exists.
2. The Commission or its delegee may seek to file a petition, intervene, or otherwise participate in a Court Supervised Proceeding or any other proceeding to secure its rights under M.G.L. c. 94G, § 19.
3. Nothing in 935 CMR 501.104(3) shall limit the Commission's authority under M.G.L. c. 94G, § 4(a)(v).
(b) Delegation. In accordance with M.G.L. c. 10, § 76(j), the Commission may delegate to the Executive Director the authority to appear on its behalf in Court Supervised Proceedings or any other proceeding, and to administer and enforce its regulations relative to such proceedings or Court Appointees which includes, but it not limited to, the following:
1. To determine the form and manner of the application process for a Preapproved Court Appointee;
2. To preapprove, recommend, disqualify, or discipline Court Appointees;
3. To approve the distribution of escrow funds under 935 CMR 501.105(10) or bond funds under 935 CMR 501.105(16) including, but not limited to, to cover the cost of a Court Appointee or the operations of an MTC under supervision subject to the receipt of a court order prior to the expenditure of such funds;
4. To approve the use of additional funds subject to the receipt of a court order prior to the expenditure of such funds;
5. To preapprove or approve certain transactions; provided, however, any change in the ownership or control under 935 CMR 501.104(1) shall be considered by the Commission; or
6. To impose fines or other disciplinary action under 935 CMR 501.500, however, any suspension or revocation of a License under 935 CMR 501.450 shall be considered by the Commission.
(c) Notice to the Commission.
1. A Licensee or Person or Entity Having Direct or Indirect Control over a Licensee shall provide notice to the Commission of a petition or Court Supervised Proceeding or any other proceeding implicating 935 CMR 501.000:
a. Five business days prior to the Licensee or Person or Entity Having Direct or Indirect Control filing a petition; or
b. On receipt of notice that a petition was filed or of an imminent threat of litigation that could lead to the appointment of a Court Appointee.
2. Notice to the Commission shall include a copy of the relevant communications, petition, pleadings and supporting documents, and shall be sent electronically to Commission@CCCMass.Com and by mail to the Cannabis Control Commission at:

Cannabis Control Commission

ATTN: General Counsel - Court Appointees

Union Station

2 Washington Square

Worcester, MA 01604

3. As soon as practicable, the Licensee or Person or Entity Having Direct or Indirect Control over a Licensee shall provide electronic and written notice to the Commission if the circumstances giving rise to the petition pose or may pose a threat to the public health, safety or welfare.
4. As soon as practicable, the Licensee or Person or Entity Having Direct or Indirect Control over a Licensee shall provide notice to the court that it is licensed by the Commission and of the regulations relative to Court Supervised Proceedings and Court Appointees including, but not limited to, the qualifications for a Court Appointee established in 935 CMR 501.104(3)(d)1., and the list of Preapproved Court Appointees.
5. A Licensee or Person or Entity Having Direct or Indirect Control over a Licensee that fails to comply with the requirements of 935 CMR 501.104(3) may be subject to disciplinary action including, but not limited to, revocation or suspension of any license or registration under 935 CMR 501.450.
(d) Commission Qualifications for Court Appointees.
1. Qualifications. The Commission deems the following qualifications essential in a Court Appointee, subject to the court's discretion. At a minimum, an individual or entity seeking to be a Preapproved Court Appointee shall demonstrate the following qualifications consistent with the regulatory requirements for licensees. An applicant may seek a waiver of these qualifications under 935 CMR 501.850. The failure to maintain these qualifications may be a basis for disqualification.
a. Suitability. An applicant must demonstrate suitability under 935 CMR 501.801: Table A.
b. Ownership and Control Limits. A person or entity named as a Court Appointee shall, prior to and as a result of being a Court Appointee, be in compliance with the control limitations set forth in 935 CMR 501.050(1)(b) or any other limitations on licensure set forth in 935 CMR 501.000.
2. Application Process for Preapproved Court Appointees. The Commission or its delegee may preapprove, recommend, disqualify, or discipline Preapproved Court Appointees. A person or entity seeking to be a Preapproved Court Appointee shall pay a fee established in 935 CMR 501.005(7)(a) and submit the following information and make the necessary disclosures:
a. Qualifications. An applicant shall demonstrate the qualifications set forth in 935 CMR 501.104(3)(d)1.
b. Credentials. An applicant shall demonstrate sufficient training, knowledge and experience, to ensure a Licensee under their or its supervision shall comply with Commissions statutory and regulatory requirements.
c. Affiliated Individuals or Entities. An applicant shall identify any person or entity that may exert control or influence over the Preapproved Court Appointee, whether or not such individuals or entities are can exercise the authority of a Court Appointee.
d. Engaged Individuals or Entities. An applicant shall identify an person or entity that the applicant intends to engage in conducting the work of a Court Appointee, whether or not such individuals or entities are exercising the authority of a Court Appointee.
e. Financial Information. An applicant shall make such financial disclosures necessary to determine its ability to serve as a Court Appointee.
f. Licenses. The applicant shall submit any professional or occupational licenses and represent that these licenses are in good standing.
g. Good Standing. If the applicant is an entity, it shall submit a valid Certificate of Good Standing issued each by the Secretary of the Commonwealth and the Department of Revenue.
h. Limitations. The applicant shall identify any limitations on the ability to serve as a Court Appointee including, but not limited to, capacity, qualifications, credentials, conflicts of interest, and financial requirements.
i. An applicant shall submit any additional information the Commission or its delegee may request, in its sole discretion.
j. Suitability. An applicant shall demonstrate suitability to operate a Licensee. If the applicant is an entity, each individual exercising the authority of a Court Appointee shall demonstrate suitability as provided in 935 CMR 501.000. An applicant shall demonstrate suitability by:
i. Submitting to a criminal background check in accordance with 935 CMR 501.030, 935 CMR 501.101 and 935 CMR 501.105; or
ii. Submitting an attestation under the pains and penalties of perjury that the applicant is suitable to operate a Licensee.
3. Application requirements in this 935 CMR 501.104(3)(d)2., shall apply only to persons and entities acting as a Court Appointee.
4. Renewal. In order to remain as Preapproved Court Appointee, each Preapproved Court Appointee, on the anniversary of their preapproval, shall annually attest to the Commission under the pains and penalties of perjury that there has been no material change to the information and disclosures submitted as part of the initial application or provide updated information and disclosures with respect to those that have changed, and pay the fee identified in 935 CMR 501.005(7)(b).
(e) Licensee's Obligations. A Licensee placed under the oversight or a Court Appointee shall:
1. Continue to comply with all legal and regulatory requirements applicable to a Licensee, except as otherwise determined pursuant a court order or a waiver granted pursuant to 935 CMR 501.850.
2. Provide the Commission with any documents requested by the Commission.
3. Cooperate with the Commission's efforts to intervene as an interested party in any Court proceeding pursuant to which a Court Appointee is sought.
4. Comply with the requirements of 935 CMR 501.104(1) upon final disposition of the License(s) subject to oversight by a Court Appointee.
5. When a Licensee files a petition, it shall propose in such petition a Court Appointee with the qualifications identified in 935 CMR 501.104(3)(d)1. and/or may choose from the Commission's list of Preapproved Court Appointees.
(f) Applicability of 935 CMR 104(3).
1. All Licensees and Persons or Entities having Direct or Indirect Control shall comply with the notice requirements established in 935 CMR 501.104(3)(c).
2. A Person or Entity Having Direct or Indirect Control that has its ownership or control interest placed under the oversight of a Court Appointee shall be exempt from the requirements of subsection 935 CMR 501.104(3)(b) and (d) through (f); provided however, that upon final disposition of the interest in question, the Licensee shall comply with the requirements of 935 CMR 501.104(1), as applicable.
(4) Assignment for the Benefit of Creditors. A Licensee must seek Commission approval, in a form or manner determined by the Commission, prior to effectuating an Assignment for the Benefit of Creditors. The Commission may delegate authority to approve such agreements to the Executive Director; provided however, that any transfer of a License shall be subject to Commission Approval.
(5) The MTC shall keep current all information required by 935 CMR 501.000 or otherwise required by the Commission. The MTC shall report any changes in or additions to the content of the information contained in any document to the Commission within five business days after such change or addition.

Notes

935 CMR 501.104
Adopted by Mass Register Issue 1403, eff. 11/1/2019. Amended by Mass Register Issue 1434, eff. 1/8/2021. Amended by Mass Register Issue 1436, eff. 1/8/2021. Amended by Mass Register Issue 1441, eff. 1/8/2021. Amended by Mass Register Issue 1507, eff. 10/27/2023.

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