Medical Marijuana Entities
Converting and Creating New Entities for the Sale, Distribution and/or Dispensing of Medical Use Marijuana
Based upon the most recent legislation, Chapter 55, Section 72 of the Acts of 2017, and guidance issued by the Department of Public Health, the Corporations Division offers the following guidance to those wishing to convert or form new entities to act as Registered Marijuana Dispensaries (RMDs) within the Commonwealth.
The following entities are able to form in order to transact business as an RMD in the Commonwealth: a nonprofit corporation (c. 180), a domestic business corporation (c. 156D) and domestic limited liability company (c. 156C).
When forming any of these entities, the organizational document must contain a purpose that such entity seeks to transact business as an RMD. Every organizational document with this purpose must be approved and endorsed by the Department of Public Health prior to its filing with the Division.
Those RMDs which formed as a nonprofit corporation may convert to a business corporation pursuant to Chapter 55, section 72 of the Acts of 2017. The articles of entity conversion also require DPH approval and endorsement on the document.
All entities that organize prior to DPH approval and endorsement may specify a general purpose. Additionally, until such time as the entity obtains DPH approval and endorsement on an amendment approving the sale, distribution and/or dispensing of medical marijuana, the entity will not be able to use any name which indicates that they are organized as a RMD. Once the entity receives the approved and endorsed amendment from the Department of Public Health it must be filed with this Division. It is unlawful for any entity to engage in the sale, distribution and/or dispensing of medical use marijuana without DPH approval and endorsement.
Regarding new legislation, effective July 28, 2017
Chapter 55, Section 72 of the Acts of 2017 permits those non-profit corporations organized persuant to MGL Ch. 180 with either a pending, provisional or final certification to dispense medical use marijuana to convert to a domestic profit corporation. Please be advised that only those non-profit corporations with a pending, provisional or final certification before the Department of Public Health may convert.
Articles of Entity Conversion of a Domestic Non-Profit with a Pending, Provisional or Final Certification to Dispense Medical Use Marijuana to a Domestic Profit Corporation are filed in accordance with MGL Ch. 156D, §9.53. To obtain a copy of this form please email the Corporations Division's legal staff at preclear@sec.state.ma.us.
Regarding new legislation from Question 3, effective January 1, 2013
As you may be aware, the passage of Question 3 on the 2012 Massachusetts State Ballot allows for medical marijuana dispensaries in the Commonwealth. While approved by ballot, the new legislation states an effective date of January 1, 2013 and does not become law until engrossed by the Legislature.
Please be advised that all nonprofits must organize for a purpose that complies with law. It is not lawful to operate a medical marijuana treatment center or acquire, cultivate, possess, transfer, transport, sell or distribute marijuana until the law becomes effective and such entities have been registered by the Department of Public Health (DPH) under appropriate DPH guidelines. DPH will be forthcoming with regulations regarding their registration process.
For our purposes, entities organizing for a purpose relating to the new medical marijuana legislation with the Corporations Division must state a general non-profit purpose recognized in MGL Ch. 180 §4. They may not state that they are organizing as a medical marijuana treatment center or organizing for the purpose of acquiring, cultivating, possessing, transferring, transporting, selling or distributing marijuana until licensed by DPH.
Moreover, because these entities will now be organizing with a general purpose, we may accept their organizational filings effective immediately.