Convenience Store battle over alcohol could lead to more cannabis stores in MA!


By David Rabinovitz

CEO, NewCann Group


Marijuana aficionados and industry observers have lamented over the slow roll out of retail stores across the state. After a year of retail operations, only 33 stores are open in a market that will likely top 350 stores. At last count, there were 247 stores in the Massachusetts Cannabis Control Commission retail license queue; meaning another 214 should be opening in the future. That figure doesn’t include Boston, Cambridge, Somerville, and other communities that have not yet awarded their full allotment of local marijuana approvals. Of Massachusetts’ 351 communities, 260 voted Yes on the 2016 ballot question #4 that legalized adult-use (recreational) of marijuana. Very few of those municipalities have voted to allow more retail stores than the legally mandated minimum. Cities and towns can only allow less than the legally mandated minimum store count if they hold a municipal-wide vote.


Massachusetts law limited retail liquor license ownership to three licenses per owner. That wasn’t a bad deal for liquor store owners, but supermarket chains couldn’t sell alcoholic beverages across their full system. In 2006 the supermarket chains squared off against the Massachusetts Package Stores Association to challenge the law with a referendum question. The Sale of Wine by Food Stores Initiative, also known as Massachusetts Question 1, was defeated at the November 7, 2006 ballot. The grocery stores licked their wounds and returned to the field of political battle in 2011 with a new proposed question. This time the sides worked out a compromise with the state legislature. That measure, passed by a 147-5 vote, gradually increased the number of liquor licenses that can be held by a single company by two additional licenses in 2012, two in 2016 and two more in 2020. Stated differently, three became five, five became seven, and on January 1, 2020, seven becomes nine. Beer and wine wholesalers and supermarkets agreed not to push a fresh challenge to the store count until 2021 at the soonest. Convenience stores were not part of that battle or the ensuing truce.


Cumberland Farms operates 939 convenience stores, 206 of them in Massachusetts. In July 2019, the company announced it was being acquired by British C-store chain EG Group (989 stores). Combined, EG Group, who ranks #13 on the 2019 Convenience Store News Top 100, and Cumberland Farms, who ranks #14, will catapult to the #9 position. Only 7-Eleven, the #1 C-store operator, has more stores in Massachusetts; 203 according to their web site.

Cumberland Farms apparently wants to sell alcoholic beverages across as much of its 206-store Massachusetts network as municipalities will allow.


Interesting, but what does this have to do with marijuana retail?


The legally mandated minimum marijuana retail store count is equal to “20 per cent of the number of licenses issued within the city or town for the retail sale of alcoholic beverages not to be drunk on the premises…” Translated into simple terms, with minor exception, 20% of the number of package stores and beer and wine retailers (C-stores and supermarkets) rounded up to the next whole number. The minor exception includes food companies that infuse alcohol into food items sold on premise – chocolates, liquor-infused cakes, etc. Generally, many of these carry-out out liquor licenses are for full-inventory package stores.


Cumberland Farms’ proposed new liquor licenses will allow it, subject to local municipal approval, to sell beer and wine at 199 of its 206 C-stores throughout the state that currently lack a beer and wine retail license. Because those licenses are governed by the same law (M.G.L. c.138 Section 15) that is used to calculate the minimum number of marijuana retail outlets, Cumberland Farms’ proposed ballot question could increase minimum marijuana store counts in many communities – could, not will.


Most communities have an odd number of carry-out liquor licenses – odd meaning not evenly divisible by five. As an example, Massachusetts Alcoholic Beverage Control Commission (ABCC) data shows that the City of Framingham has 30 carry-out licenses; 21 liquor beverage stores, 4 convenience stores, 2 gas stations, 2 supermarkets, and one artisan shop that infuses liquor into chocolate sold in their retail outlet. Framingham is in the process of granting local approval to six marijuana retailers. Framingham also happens to host one Cumberland Farms store. If the Cumberland Farms store is allowed a beer and wine retail license, Framingham will have 31 ABCC carry-out licenses and will increase its marijuana retail store count from six to seven. Framingham isn’t alone.


It appears 30 Massachusetts communities that voted Yes on 4 have a number of ABCC carry-out licenses evenly divided by five. That means adding a C-store beer and wine license in those communities will increase the minimum marijuana retail count by one store as well. That assumes impacted communities will only add one such additional carry-out liquor license. In 36 such communities, adding just two C-store beer and wine licenses will increase the minimum marijuana retail count by one store.


Cumberland Farms has 206 stores across Massachusetts, 7 that sell beer and wine, the current state limit. 7-Eleven boasts 203 stores, five that sell beer and wine. Jeff Lenard, Vice President, Strategic Industry Initiatives for the National Association of Convenience Stores indicates there are 3,279 C-stores across the Commonwealth, 1,866 of which sell motor fuels. Compare that count to 3,056 carry-out liquor licenses as reported by the ABCC. Admittedly, quite a few of those ABCC licenses are held by convenience stores, but a review of ABCC license data shows numerous convenience store chains that could seek to increase their license count if Cumberland Farms has its way.


If the Cumberland Farms question makes it to the ballot – the Massachusetts Package Stores Association has sued arguing the questions is constitutionally flawed – not all stores in all municipalities will be granted approval for a liquor license. However, the ensuing increase in these licenses will certainly impact the minimum license counts of marijuana retail outlets in many communities. One or two C-store coolers dedicated to beer and wine could translate to one additional local marijuana retail license in that community. For communities like Framingham that currently have an even number of ABCC carry-out licenses, it just requires one of these proposed add-on licenses trigger another marijuana retailer. 45 Massachusetts communities will see an increase in marijuana stores if two C-store beer and wine licenses are granted.


If a look at what is on C-store owner’s minds is any indication, this could be just the beginning of efforts to modify Massachusetts’ legislative framework. Since the marijuana legalization trend took hold, there are numerous marijuana conferences and trade shows across the country. The industry’s biggest show, MJBizCon 2019, takes place December 11 to 13 in Las Vegas. Coincidently, the National Association of Convenience Stores (NACS) is holding a one-day pop-up conference in Las Vegas on December 10, the day before MJBizCon, on “The Future of Cannabis in Retail.


The real battle in Massachusetts marijuana retail may soon be playing out in the battle between Cumberland Farms and Massachusetts Package Stores Association, with scant little notice of the cannabis community.



David Rabinovitz is the CEO of NewCann Group and has been involved in the marijuana industry since 2010. David is the acting treasurer of MassCann/NORML. He’s a trainer for the Massachusetts Cannabis Control Commission Social Equity program. David is data-driven and well versed in all things Massachusetts marijuana.


He is a frequent guest on Weed Talk Live with Jimmy Young and Curt Dalton. He speaks at various industry events and his industry insights and analysis have been featured on Cannabis.net, NextCity.org, WickedLocal, The Boston Business Journal, WGBH, Daily Free Press, and Marijuana Venture magazine. He provides pro-bono consulting and guidance to Social Equity and Economic Empowerment candidates. Despite a phobia for needles, in his spare time he is a regular platelet donor for the American Red Cross. Connect with David on LinkedIn at https://www.linkedin.com/in/davidrabinovitz/.

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