Shapiro Urges Lawmakers To Appoint Receiver, Amend Governing Statute
JUNE 20, 2024…..A state government watchdog made an urgent plea this week for the Massachusetts Legislature to intervene at the Cannabis Control Commission by appointing a receiver to manage the day-to-day operations of the “rudderless agency” and then restructure it by amending the “unclear and self-contradictory” law that legislators wrote in 2017 to create the CCC.
Inspector General Jeffrey Shapiro’s six-page letter to the House speaker, Senate president and minority leaders of each branch is the latest in a series of calls from some on Beacon Hill for greater oversight of the cannabis agency that has recently matched the significance of its policy and regulatory work with repeated bouts of personal conflict, constant staff turnover and a sense of disarray.
The agency has been without a dedicated chairperson since Shannon O’Brien was suspended by Treasurer Deborah Goldberg in September and without an executive director for nearly as long. Shawn Collins, the only administrative head in the CCC’s history, went out on parental leave in September and resigned before returning in December. After an initial attempt to delegate away most of Acting Executive Director Debra Hilton-Creek’s responsibilities belly-flopped, commissioners last week voted to direct Hilton-Creek to let others handle most CCC duties so she can focus on her chief people officer job, according to WBUR.
“This is no way to operate a state agency, let alone one that was responsible for bringing in approximately $322 million in tax and non-tax revenue in Fiscal Year 2023,” Shapiro wrote this week.
The inspector general said his office conducted a “limited” review of the CCC’s structure and “determined the agency’s statute lacks a clear leadership hierarchy with defined duties and responsibilities.” He said the problem is that there is no clear indication in the CCC’s governing statute of who is responsible for running its day-to-day operations, and that the entire structure of the agency “is not suitable for running the day-to-day operations of a state agency with as many responsibilities as the CCC” and must be changed.
“I urge the Legislature to take short-term action by authorizing the appointment of a receiver before the completion of the current formal legislative session on July 31, and long-term action by revisiting the commission structure. This authority should remain in effect until such time as the Legislature is able to revise the overall governance structure of the agency. Based upon the recent history impacting the day-to-day leadership and the overall commission structure, the Legislature should work to modify the structure to clearly delineate the role of the chair and the executive director so that the agency can properly function and avoid working at cross purposes, ensure that the agency can maintain the budgeted revenue stream, and provide clarity and certainty to its stakeholders.”
Shapiro’s office said it has determined that the Legislature’s rewrite of the 2016 ballot law that legalized non-medical marijuana — and completely revamped the CCC from a three-person group entirely under the auspices of the treasurer to a five-person group chosen by the treasurer, governor and attorney general — “is unclear and self-contradictory and provides minimal guidance on the authority and responsibilities of the CCC’s commissioners and staff.”
“For instance, the statute says the chair has ‘supervision and control over all the affairs of the commission,’ while the executive director is the ‘executive and administrative head of the commission.’ These descriptions, in the absence of better defined authority and responsibilities, have empowered individuals in leadership roles to assert competing visions of the chair’s, executive director’s, and commissioners’ roles,” the inspector general wrote.
And when the law uses the word “commission,” he said, it sometimes means the five-member public body of commissioners and it sometimes means the agency itself. That’s led some people to interpret the 2017 law to mean that the CCC chair oversees the affairs of the public body, while the executive director oversees the operating affairs of the agency. But others believe the CCC’s chair oversees the entire agency.
“The OIG’s review further affirmed that this confusion has contributed significantly to the current situation at the CCC,” Shapiro’s office said.
A CCC spokesperson said the agency got Shapiro’s letter and was reviewing it.
“The agency will continue to cooperate with the OIG, as we have done throughout their investigation, and remain willing and ready to work with government partners to safely, effectively, and equitably regulate the Commonwealth’s $7 billion cannabis industry,” a statement from the CCC said. “Commissioners and staff have also worked to clarify governance questions in statute through the ongoing efforts towards developing a Commission charter. As discussed by Commissioners at last week’s public meeting, they intend to have a public conversation about the outcomes of that work very soon.”
A different roster of CCC overseers voted in April 2022 to undergo mediation between commissioners and staff-level leadership “for purpose of finding common ground and obtaining buy-in from all parties, in its efforts to establish a durable and effective governance structure.” Then-chairman Steven Hoffman said at the time that it was a matter of “policy versus implementation, and what are the decision-making rights of the commission, what are the decision-making rights of staff, particularly as led by the executive director, where is there overlap, where the lines, where the lines between policy and implementation?”
Shapiro said the CCC has spent more than $160,000 on mediation services and cast doubt on whether any governance charter that results from the mediation would actually be helpful, given that the mediation was started under a different group of people and since the document will not have any force of law.
“Given the commission’s history to date, the charter may be an expensive exercise without lasting impact,” he said.
Shapiro’s report was well-received by suspended Chairwoman Shannon O’Brien, who has argued that her suspension is connected to her attempts to bring transparency and change to the CCC. A spokesman for O’Brien said she had been alerting lawmakers “to the CCC’s structural, operational and cultural problems” when she was suspended.
“In spite of her efforts to lead a positive transformation, Shannon O’Brien was met with resistance by those inside the CCC, who still want to maintain the flawed and wasteful status quo,” spokesman Joe Baerlein said. “Chair O’Brien is pleased the IG is alerting the public for the necessary reforms to the CCC.”
It was also welcomed by Sen. Michael Moore, a Millbury Democrat and frequent CCC critic who called the agency “a black eye on the legal cannabis industry in Massachusetts” in a statement released after Shapiro’s letter.
“For years I have been calling for action to bring more transparency and accountability to the CCC because I believe cannabis consumers, business owners and employees, and everyday taxpayers deserve better. While Inspector General Shapiro’s initial review findings are damning of the CCC’s current leadership, they do not surprise me. I hope that the Massachusetts Legislature will heed the Inspector General’s call to action and appoint a receiver to begin plugging the holes at this agency while lawmakers evaluate how we can reform the CCC to work better for everyone.”
