News / Bulletin | “Pennying Out” Marijuana | January 22, 2025
Bulletin | “Pennying Out” Marijuana | January 22, 2025
To: Licensees
From: Investigations and Enforcement Department
Date: January 22, 2025
Subject: “Pennying Out” Marijuana
This Bulletin applies to all licensed Marijuana Retailers, Marijuana Cultivators, Marijuana Product Manufacturers, Microbusinesses, Delivery Operators (collectively, “Licensees”), and their Registered Agents.
The Cannabis Control Commission (the “Commission”) is aware that some Licensees are distributing Marijuana and Marijuana Products (herein together, “Marijuana”) in its inventory to Registered Agents, Consumers, and other Licensees far below market price, for example a penny, five cents, or a dollar (herein referred to as “Pennying Out”). Oftentimes these distributions are falsely attributed to a Vendor/Quality Control Sample or Employment Discount Program and used by Licensees to provide free samples at trade shows, other industry events, or to Consumers; this practice is incompatible with Commission law and in certain circumstances may be considered diversion. See G.L. c. 94G, § 4(a½)(xxix); see also 935 CMR 500.105(4)(b)20.
To the extent that Licensees make distributions of Marijuana to Registered Agents or other Licensees through a Vendor Sample program, Licensees should be following the process outlined in the Support Bulletin on Trade Samples (the “Trade Sample Bulletin”), dated August 4, 2022, issued by the Commission’s Seed-to-Sale System of Record vendor Metrc, LLC (“Metrc”). Trade Samples are samples of Marijuana or Marijuana Product developed by a Cultivator or a Product Manufacturer provided to an adult-use Licensee to promote product awareness. See Trade Sample Bulletin (“Trade Sample” is Metrc’s term for Vendor Samples); see also 935 CMR 500.002 (definition of Vendor Samples). Currently, Commission regulations do not contemplate a Vendor or Quality Control Sample program for Medical Marijuana Treatment Centers. See 935 CMR 501.000. As stated in the Trade Sample Bulletin, “Trade Samples are not to be sold for any dollar amount and are for the strict purpose of allowing other licensees to test new products.” (emphasis added). Cultivators and Product Manufacturers with a Quality Control Sample program should follow the guidance provided on Page 16 of the Commission’s Seed-to-Sale Guidance, dated May 17, 2021.
Further, Licensees with a Vendor or Quality Control Sample program are required to have and follow a written Standard Operating Procedure (SOP) that is compliant with 935 CMR 500.120(13)-(14), 500.130(8)-(9), 500.140(12), and 500.146(10), as applicable. See 935 CMR 500.120(12)(h) (requirement for Cultivators); see also 935 CMR 500.130(5)(j)-(k) (requirement for Product Manufacturers); 935 CMR 500.140(11) (requirement for Retailers); and 935 CMR 500.146(9) (requirement for Delivery Operators). Similarly, any Licensees with an Employee Discount program, as permitted by 935 CMR 500.105(4)(a)9., should also have and follow a written SOP which should include a mechanism for tracking.
If the Commission discovers that a Licensee uses a Vendor/Quality Control Sample or Employee Discount program for any purpose other than what is intended or distributes Marijuana through those programs that end up with Consumers or Patients it will take enforcement action up to and including the issuance of fines, and/or the suspension or revocation of a License.
In the future, there may be technical record keeping updates to the Vendor/Quality Control sample process. Licensees will be made aware of those updates through the issuance of Metrc bulletins. If you have questions, please contact the Commission at (774) 415-0200 or Inspections@CCCMass.com.
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