“Pop up” is a general description here, and could refer to any form of non-traditional lease with shorter, more informal terms. Some pop-up shops might simply be single day or weekend-long merchandise installations in an existing store, while others could refer to something more like a short-term commercial lease.

Pop-Up Shops Benefit Retail Owners

The pop-up model is great for a business owner in this way, because the storefront can open on a trial or short-term basis. Whether traffic or general demand will be adequate in any given area is a major decision for businesses that need to commit to a long term lease. This flexibility can make or break an entrepreneur’s decision to take the leap to a full shop. Aspiring retailers will likely more often be requesting pop-up arrangements rather than a full leases, as this type of business model grows.

Pop-up Friendly Landlords Will Reap the Rewards

When consumer sentiment changes, business owners too will want better options – and successful commercial landlords will need be flexible to this evolution. Most building and plaza owners want reliable income, which might have once meant large or established national stores. But those owners who can dedicate at least some temporary or shared space will encourage newer and more vibrant businesses into their properties.

How to Negotiate a Pop-Up Lease

The goal of a pop-up lease is to simplify payments and obligations between the landlord and tenant. In most instances, this takes the form of a “pop-up license,” where the landlord becomes the “licensor” and the tenant a “licensee.” Unlike a tenant though, the licensee doesn’t always pay for the associated insurance or utility costs for water or heat, perhaps even electricity. In exchange, the licensor can evict or “relocate” a licensee with little notice or formality, which should avoid drawn out landlord-tenant conflicts.

Just as many business owners may not be ready for these types of agreements, older Massachusetts attorneys might be similarly uncomfortable with the newer, more flexible commitment model. Any interested business and/or building owner should obviously hire legal counsel familiar with pop-up and temporary retail tenancies, in order to ensure the right balance between benefits and obligations is struck. The concepts in these arrangements are not complex, but people generally ar

Where to Find Pop-Up Opportunities on Cape Cod

The Cape, a region with a strong seasonal economy, is actually an area somewhat familiar with the temporary and short-term use of commercial real estate. Storefronts of this kind, whether ice cream parlors or gift shops, have long operated only in the warmer months. So many landlords are familiar with the concept, though perhaps not under a “pop-up” model. Still many are using this phrase to attract would-be tenants who are looking for space & opportunities.

While there can never be a complete listing of pop-up opportunities, a simple browser search for “pop-up stores” in any given town would reveal some of the more frequent locations and regions. Consulting local chambers like the Cape Cod Chamber of Commerce, or organizations like Live.Love.Local would also probably yield a lot of promising leads. One of the more exciting and dynamic opportunities we’ve heard of recently, for example, concerns an “E for All Alumni” (“Entrepreneurship for All”) store, right around the corner from this law firm’s office in Mashpee Commons.

Where to Start

Different businesses require different considerations when it comes to legal needs, and a risk/liability analysis, as well as a business plan overview is usually where the conversation begins. But wherever entrepreneurs and building owners are in their plans, all are encouraged to write or call any time to set up an appointment with a business attorney to create a pop-up store.

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Food Establishments and the Health Codes

The Massachusetts Sanitary Code for “food establishments” is by far the most significant obstacle to allowing pets within a business. Put simply, live animals are not allowed on the premises of any food establishment, with limited exceptions (live seafood is naturally exempt, as are service animals discussed below). Food establishments in the code are defined broadly as operations that store, package, vend or otherwise provide food for human consumption. Restaurants and grocery stores are therefore largely off limits for dogs and pets in general. Sadly, these regulations have little likelihood of changing, since Massachusetts like most states has adopted them directly from the FDA itself.

Service Animals vs. Emotional Comfort Animals

What Is the Liability of Bringing a Dog to Work?

For owners, any dog-related incident at work would apply just as it would in any public place. This generally means that an owner will be responsible for any damage or injuries caused by his or her dog. For employers in Massachusetts, there are some exceptions to this rule since worker’s compensation coverage will usurp any private right of action by an employee for any injuries caused on the job. But members of the public would still be able to recover under those circumstances for injuries caused by any dog owner. Local leash laws, and penalties for non-compliance, should also be carefully considered for any place where the public is allowed.

Additional Considerations for Dog-Friendly Employers

Perhaps more than actual laws and regulations, employers need to pay some attention to exactly how, when and why they want to allow pets in the workplace. An employee guidebook should describe the expectation that all employees maintain absolute control over their animals. Cleanliness and hygiene too should be strictly required, in order to ensure that other employees enjoy a safe and comfortable work environment. An employer should also be cognizant of informing new employees of a dog-friendly workplace policy, to avoid any conflicts from possible allergies or even a fear of certain animals. Likewise for any business that invites the public, it’s a good idea to create some signage displayed in prominent areas to inform visitors that dogs are allowed or present inside.

Beyond these basic considerations, a bring-your-dog-to-work policy can provide real benefits to all involved; the dog, the employee and the business itself. The dog no longer has to spend every day alone for hours on end; the employee gets more time with his or her best friend, and co-workers, along with customers and clients, can enjoy the benefit of added companionship too.

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Enter the Massachusetts “Social Consumption Establishment” for Marijuana

Prefaced by headlines in the on-again-off-again Denver regulations regarding so-called “Cannabis Clubs,” the Massachusetts Cannabis Control Commission draft regulations created a third type of retail license for operators to sell “single servings” of marijuana to consumers on the premises. While the size of such a serving has yet to be defined, our understanding is that these businesses will not be able to serve more than an ordinary dose of THC, e.g. 10mg. These licenses are distinguished as Primary Use or Mixed Use social consumption establishments, which designation depends on whether 51% of the average gross revenue is derived from the sale of marijuana products to be consumed on the premises.

It is ostensibly possible for either “primary” or “mixed use” to exist in the presence of other business types, the only difference between these licenses being revenues. The license requires very strict controls for storage and security, and also that the sales be “closely integrated with the shared business product or service.” Importantly, and probably very disappointing to many restaurateurs, these regulations explicitly forbid the use or consumption of alcohol in any of these social consumption establishments – at least at the same time marijuana is offered. Suggested businesses tailored to social consumption have included:

• Cafes, Bakeries & other food establishments not serving alcohol.
• Massage parlors and spas, clinics etc.
• Movie theaters (not arcades due to other restrictions)
• Yoga Studios, gyms and fitness clubs
• Bud & Breakfast Inns/Hotels

While prospective businesses of this kind can be exciting in concept, from a legal perspective they are not at the top of our recommended models. The reason for this, if it isn’t apparent, is that an owner of the social consumption business — and/or the real estate it occupies — incurs a risk of liability if the consumer causes or is a participant in an accident or other damaging event. And while marijuana advocates may protest that the effects of marijuana are not nearly so detrimental to e.g. hand-eye coordination as alcohol, the reality is that law enforcement and the Courts have not adopted this distinction. Until suitable intoxication testing standards are in place, and until there is more widespread understanding on the effects of marijuana, the same warning will till apply from this office.

The Marijuana Transporter – A Third Party Secure Solution for the Industry

Not to be confused with consumer delivery services, these transporters will be authorized to ship marijuana between licensed establishments (think cultivator to retailer or processor, cultivator or processor to retailer etc.) Many existing operations will operate their own inter-facility shipment, but these third party licensed services will be essential for any of the smaller operators with limited resources, of which the Massachusetts licensing scheme stands to launch quite a few. Where most banks use a “Brinks” or “Loomis” shipper for their cash, it follows that a company that develops an efficient infrastructure for bulk marijuana transport in Massachusetts will be able to enjoy similar success (A little inside knowledge here, but one of our clients that reached out to Brinks learned that they would nearly give away their used vehicle inventory).

Enforcing the Standards for Massachusetts Marijuana – The Independent Testing Lab

On a trip one early September day in 2012 to the west coast, I visited an old friend in Seattle who happened to be working at a testing lab for the medical marijuana industry (Washington passed its own recreational law shortly thereafter). The office itself was a mere two room unit comprising little more than 6-800 square feet. One room acted simply as a reception area, while the other contained a pair of equipment stacks barely larger than component stereo systems.

These units were High Pressure Liquid Chromatography units, or (“HPLCs”), and apart from the desktop computers connected to them, accounted for the entire testing lab operation. That month too, the magazine “High Times” was hosting a Cannabis Cup celebration in the city, and this lab was responsible for all of the entrants to the competition.

Since that day, I’ve long been interested in this particular Cannabis business model from a legal perspective. The office itself, with as many test samples as it had from around the city, probably held less than the legal possession limit for any medical patient. Because of this, the relatively low cost barriers to entry, and because such business requires no interaction with patients or consumers of any kind, the marijuana testing lab in Massachusetts remains a recommendation for our clients to enter.

Massachusetts Marijuana Research Facility Licensure

Another interesting yet obscure license available on the recreational marijuana market is similarly science based, but a lot more focused. While federal law has largely precluded the creation of any such entities in the U.S., they are somewhat common in Israel, where a lot of marijuana studies originate.

Such a research facility is naturally going to materialize in the form of a non-profit, or else will likely be associated with a university, both of which Massachusetts has many —
especially in the medical sciences. So while the federal school funding conflict that currently prevents meaningful research will remain an impediment to the large scale R&D in this field, if the U.S. Congress can find the votes to pass even moderate reforms, we expect Massachusetts will fast become a leader in marijuana research for the foreseeable future.

Whether we see some, most or all of these different marijuana business types open in Massachusetts is a guessing game, but it is certain the Cannabis Control Commission is ready for business. Federal law as of the time of this article remains the most significant obstacle to the industry without a doubt – for banking, insurance and even prosecution from the Department of Justice. The state’s own security, tracking and community engagement requirements are certainly a burden too, but a Massachusetts attorney with marijuana industry experience will be able to successfully guide his or her clients without much issue.

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More than any other state, Massachusetts clearly aimed to establish a regime that accounted for the many different activities related to marijuana, while at the same time attempting to ensure the survival of small businesses over medium to large enterprises. Every applicant must be a registered entity with the Massachusetts secretary of state, whether a corporation, LLC or otherwise. This article details some of the more popular licenses that our clients have shown an interest in over the past few months. A second article covers the remaining adult use marijuana licenses.

Starting a Marijuana Cultivation Operation in Massachusetts

For those hoping to cultivate adult use or “recreational” marijuana beyond mere personal use, there are essentially three different tracks available:

The most widely available license will likely be the standard cultivation license. Per the regulations, a cultivation license allows for cultivation, processing and packaging marijuana for distribution to licensed retailers only – not directly to consumers. Successful applicants will be able to apply for a license based on canopy square footage, as the table below indicates:

These regulations also allow for the much-awaited “craft marijuana cultivator cooperative” license, essentially allowing for Massachusetts residents to form a limited liability company in their application for the cultivation license tiers detailed above, with a few differences. Primarily, where an ordinary cultivation license would only allow for one location, the craft cooperative license permits up to 6 locations for cultivation, and 3 locations for processing/packaging. It was initially thought that these licenses would be limited as to overall canopy size, and would restrict simultaneous ownership of a retail license, but the draft regulations contain no such limitation at this time.

A final cultivator license type is identified by the regulations as a “Marijuana micro-business.” In this business type, an applicant enjoys licensing fee discounts of 50% and can operate as a Tier I or II cultivator only, still with processing and manufacturing capabilities, and additionally may sell its product directly to consumers under the same license. Like the craft cooperative license, the micro-business is strictly available for ownership by Massachusetts residents, and the regulations prohibit a licensee from having any ownership interest in another type of marijuana license.

The Marijuana Niche Market – Becoming a Third Party Marijuana Processor in Massachusetts

For clients calling our firm with an interest in starting a Massachusetts marijuana operation, we have long been recommending that an extraction/processor/manufacturer license is one of the best options available. The reasons for this are many, most importantly that as the marijuana market develops, manufacturing methods and products will almost surely be the most important tool for product differentiation among competitors. A couple of other factors contributing to this recommendation:

• Entry and operational costs to processing and manufacturing are much lower than for cultivation.
• IRS Chapter 280E, an impediment to marijuana sales profit margins allows for “Cost of Goods Sold” ordinary business deductions, and manufacturing is entirely deductible under said regulations.
• Processing and manufacturing operations require little relative space
• Processors do not need to interact directly with the public and enjoy little relative risk

Again, for those interested in the unique cannabinoid compounds within the marijuana plant for its many therapeutic applications, there are a number of different substances that lead to varied desirable extraction outcomes: (alcohol, butane hash oil “BHO,” water, CO2 are among the most popular). Furthermore, based on the wide variety of available delivery methods for marijuana (smoking, vaping, ingestion, sub-lingual, transdermal, topical), the number of potential products in this industry is virtually limitless. It therefore follows that the number of processors and manufacturers that participate in this market should also be limitless.

Opening a Retail Adult Use Massachusetts Marijuana Establishment

Apart from the Micro-business detailed above, an applicant can only sell marijuana to the 21+ public, up to one ounce of marijuana (or 5 grams of extract) with a traditional marijuana retailer license. This type of license allows for any retailer to obtain its products from any of the cultivation licensees, or any third party processor/manufacturers. There are two primary types of a license to sell marijuana to consumers within these guidelines:

1. Brick and Mortar Establishments – Licensed only in a specific location, these entities can sell to other entities, general consumers over the age of 21, and licensed Massachusetts medical marijuana patients.
2. Delivery-Only Retailer – These licensees do not provide a retail location open to the public, but are authorized to deliver directly from a marijuana cultivator facility, craft marijuana cultivator cooperative, marijuana product manufacturer or micro-business.

Both types of retail license will require similar but particular requirements inherent with each operation regarding tracking and compliance. And while security will most certainly represent some of the greatest concerns for delivery retailers, we anticipate many operators in this field given the increasing use of delivery by consumers in general. A third type of retail license, the “social consumption” establishment is a very particular business type that we profile in our next article on the Massachusetts adult use law.

Overall, the Cannabis Control Commission appears to have developed a very far-reaching set of regulations that were clearly informed by a wide variety of experiences throughout the world marijuana market. However robust and accessible this market may appear, like the medical marijuana law, these adult-use regulations still require a very detailed and intensive process for marijuana business applicants in Massachusetts. Naturally then, applicants are better off to consult experienced attorneys in the Massachusetts marijuana industry early, rather than late in the game.

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Massachusetts Businesses Disrupted by Blockchain – The Legal Field

Law is easily one of the most obvious industries subject to change first under blockchain technologies. One need only look at the examples that are often used to explain the blockchain’s utility to understand why. Below are two diagrams featured in the guide “Blockchain for Dummies” offered by IBM:

The first diagram indicates the way we presently manage automobiles, from their creation to their financing and finally their destruction. The parties to these transactions need to coordinate and exchange several aspects of the automobile throughout its lifetime, and all of these parties keep their own individual transfer records. A great deal of time and money goes into these records, the titling and registration of an automobile, especially where financing is involved. Additionally, each party in these processes must add the extra step of reconciling its own recordkeeping system with the records of every other party.

The second diagram explains why blockchain technology will eliminate much of this so-called “friction” in the transfer process. Through the shared or distributed ledger, every party holds the same instantaneous record when each transfer occurs. And rather than the necessity for each party to create its own contracts detailing the transfer process, the necessary conditions for fulfilment, and the infrastructure to communicate and execute these conditions and processes (i.e., legal work), the blockchain handles all of this.

How Blockchain Will Revolutionize the Massachusetts Insurance Industry

This new useful tool in the transmission, receipt and storage of information looms large over all aspects of the insurance industry; from insurance brokerage, to underwriting, to assessment and the claims process. So much of this information-based industry, that requires trust on the one hand, and an exchange of private data on the other, stands to see massive changes in the next 5-10 years. The creator of Ethereum himself, Vitalik Buterin, used crop insurance as an example in his whitepaper:

One can easily make a financial derivatives contract but using a data feed of the weather instead of any price index. If a farmer in Iowa purchases a derivative that pays out inversely based on the precipitation in Iowa, then if there is a drought, the farmer will automatically receive money and if there is enough rain the farmer will be happy because their crops would do well.

Vitalik’s example is a type of “parametric insurance” that can payout automatically based on independent and objective measures, rather than through the process around and interpretation of, a claims adjuster. It is easy to see the time and money saved here. To take the example one step further, the smart contract we’re imagining could even scale payouts based on the severity of the measure, for example ranging a 20% policy payout for minimal drought through 100% payout for a major one.

Another development in the industry is peer to peer insurance, much in the way that crowdfunding recharacterized mass investment models, that may drastically change the structure of the entire industry. As its name implies, the P2P insurance model uses a secure blockchain medium to link with a group of mutual “peer” policyholders as underwriters directly, thereby reducing the present layered profitmaking model with administrative and commission fees. A group of peers can theoretically come together to arrive at a consensus of the conditions on the blockchain that would trigger a payout, and determine how much such a payout would be.

Technology Efficiencies Carry Their Own Risks

For all of its promise, and as much as consumers may be ready to turn their demand for professional services to more technological solutions, the benefits of block chain also create their own risks. In today’s very hackable world, it isn’t extraordinary to imagine for example the hacking of a weather data feed to trigger policy payouts. Protections, checks and balances can be put in place to significantly protect against these risks, but the threat is still real. Regulations too, will slow the growth of smart contracts until a reliable model is proven.
Professionals and consumers alike should nevertheless continue to learn about the potential effects of blockchain on our businesses and lives in general, as these applications are being developed exponentially. The practice of law and insurance may be the first industries, to feel blockchain’s effects, but startups are using the technology in hundreds of fields ranging from energy to music. To learn more about how the blockchain and cryptocurrency business can benefit your life, call our office to contact a Massachusetts blockchain attorney. McNamara & Yates is an enterprise level cryptocurrency exchange service provider.

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Massachusetts RMD Application Phase One – Application of Intent

The initial phase of the RMD application requires the creation of a non-profit entity. For this the applicant will need to show the corporate by-laws, a list of all officers, and evidence of its state registration. In addition, “character and competency” forms will need to be submitted for each officer and director of the corporation, forms that ask for general education and character qualifications from each individual, including the owner of any investors. A major requirement too is that the applicant must demonstrate where its funds are held and by whom, a minimum of $500,000 per application must be shown in a current bank account statement.

In practice, part of the $500,000 can be used to pay the $1500.00 fee for the Application of Intent, and the applicant may wait up to 8 weeks for an invitation to the next phase of the process, but the DPH can usually turn it around in half the time. If an additional site is applied for by the same applicant at any time in the process, the DPH requires a showing of an additional $400,000 in available funds. It should be noted that these capital requirements are far below what would ordinarily be required for starting a full scale Massachusetts medical marijuana operation, and should not in any way be considered a sufficient investment for this kind of business. The DPH is simply trying to establish a minimal threshold for serious applicants.

Massachusetts RMD Application Phase Two – Management and Operations Profile

The MOP is similarly another basic threshold for the DPH to filter out casual applicants from those who will go the distance. Instead of capital requirements, however, in this instance the State is looking to make sure the group and its members have done their homework. Details on how the company intends to manage the intense security requirements, and how it will conduct its growing operations are among the most important aspects that the applicant should be able to describe. A RMD should include individuals with these types of backgrounds, to help not only with the MOP, but build-out and operations. The MOP document itself must be submitted within 45 days of the applicant’s invitation, so we recommend having it completed prior to submitting the AI.

Along with the MOP, the applicant must submit background check authorization forms for all of the individuals listed in the AI, along with fees for each, and another $30,000 for the Phase 2 application itself.

Massachusetts RMD Application Phase Three – Siting Profile

The siting profile is usually by far the most labor-intensive, and time consuming aspect for most applicants. RMDs still have a lot of work in future phases, but it is at phase 3 of the application that the applicant must explore the communities that it can work with. The group needs to compile a list of desired or potential locations based on location, population and other factors it may deem important, and then run through a checklist of items to complete for investigating options in each municipality. Some of the highlights include:

1. Complete zoning analysis on municipality.
2. Find lease/purchase option for cultivation & processing.
3. Find lease/purchase option for dispensary.
4. Initiate process with town for obtaining letter of support or non-opposition.

This “letter of support or non-opposition” is the primary goal in phase 3 of the application. Many municipalities will require this letter be issued after reaching a “host agreement” from the applicant that details ways in which the RMD will contribute to the community. Understanding how host agreements work, the revenue a RMD can expect, and the funds available for such a contribution are key aspects that may determine the success or failure of a medical marijuana operation. And an applicant will not be able to open its doors without a letter of non-opposition, so this is a particularly sensitive time for any RMD.

Massachusetts RMD Application Phase Four – Provisional Certificate of Registration

If the applicant has submitted another $50,000 with completed phase 3 materials, and the DPH has deemed the RMD’s site to be compliant, the applicant moves on to the PCR. This stage is not simple by any means, but varies highly with the facilities the applicant intends to use. In this stage the RMD will begin its build-out, with an architectural review from the DPH and ongoing inspections as build-out of the facility proceeds. While earlier applicants ran into severe setbacks with HVAC and other climate control systems, much of those details have been ironed out as vendors in Massachusetts become more acquainted with requirements for marijuana cultivation.

Massachusetts RMD Application Phase Five – Final Certificate of Registration

After buildout is completed, the DPH has inspected all of the facilities for compliance with its regulations, and the operation has established itself equipped to cultivate, process and dispense marijuana, the company can begin its business. The RMD will commence its cultivation and processing operations, and submit its initial samples to the DPH for testing THC & cannabinoid levels, as well as for impurities like molds and heavy metals.

Final Considerations – Hire an Attorney! (You’re reading a law firm website)

This article encompasses much of what the Massachusetts medical marijuana application process will entail for each applicant, but each phase requires a very detail oriented set of tasks within it. While the process is indeed straightforward, it is highly abnormal that any person or group could complete each phase without any setbacks. And while any operation built correctly should be able to survive long into the future, eliminating as many setbacks as possible will naturally allow for that business to become profitable much sooner, which eliminates the uncertainty that continues to exist in this explosive industry. Contact Tim McNamara today, a skilled marijuana business attorney, to learn about how we can assist your organization in each phase of the application. In an industry full of untested vendors, our experience pays for itself on day 1, and can plausibly save a new organization hundreds of thousands of dollars in unnecessary expenses over the course of the entire application.

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So the risk for excess and abuse of free market participants, to be a burden rather than a benefit on society, is both real and enticing for many corporate boards. And while typical non-profits are an option for those seeking to serve a purely beneficial purpose, Massachusetts now has a hybrid that can incorporate the best of both worlds – a goal to make a profit through serving a public benefit.

Old Assumptions Find a New School in the Benefit Corporation

This hybrid takes a more holistic corporate model that many business schools acknowledge can result in a stronger, more stable and ultimately valuable enterprise. These schools teach that to be successful, a business must please not just its shareholders, but a great number of additional stakeholders.

To be sure profits are one indicator of success, but no business would even exist without suppliers, communities, governments, employees and customers. And a business can still be profitable, possibly more than a traditional corporation, by incorporating the interests of these other stakeholders into its corporate by-laws. This is accomplished by writing a beneficial purpose into the by-laws under what is called a Massachusetts “benefit corporation.”

Including a beneficial purpose as part of the company’s foundation in this way means that a benefit corporation not only guarantees it will provide a benefit, but also often reinforces its relationships with the lifeblood of its operations: its employees, customers, host communities, suppliers etc. This creates a more integrated and symbiotic business model, one with stronger and more regular ties to the surrounding world, than those of its traditional corporate model competitors.

The Benefit Corporation’s 21st Century Communications Style

Most medium to large sized businesses devote tremendous energy into the development of, and spending on, the promotion and placement of their goods and services. The focus for these businesses is frequently on creating a unique brand with a lasting impression, again, for the goal of increased sales and therefore greater profits. We’ve seen this marketing style result in all kinds of otherwise useless phenomena: catchy jingles, viral hashtags, easy to remember snack names ending in “os.” But what if instead businesses were remembered for their inextricable work to provide a public benefit? What if, for example, Frito Lay focused part of its model on creating snack foods that help curb malnutrition?

In a benefit corporation, the business brand and promotion strategy can largely be tied to its purpose. The business simply expresses to the world the public benefit is trying to serve, and word of mouth assists in spreading those expressions. From a public relations perspective too, the company doesn’t need to find outside charitable partnerships or civic sponsorships to demonstrate its benevolence to society. The brand, marketing strategy and civic engagement opportunities can all be identical to the purpose of the corporation itself. This is all the more crucial in an age of social media, when a business can experience unprecedented backlash from the public at the slightest controversy. A corporation that could explain its actions as part of some beneficial purpose, beyond maximizing shareholder value, would be at a natural advantage under these circumstances.

How the Massachusetts Benefit Corporation is Different

As stated earlier, the benefit corporation still has shareholders, and still operates for a profit. Likewise, it still pays taxes like an ordinary corporation. The primary difference is that at a minimum, the corporation must state at least one “general public benefit” that it will provide, and may also include a “specific public benefit.” Some specific requirements of any Massachusetts benefit corporation include:

1. The board of directors must consider the effects of the company’s actions on:
   • Shareholders of the corporation;
   • Employees and workforce of the corporation, its subsidiaries and suppliers
   • Interests of Customers or clients
   • Community & societal factors
   • Local, regional and global environment;
   • Short term and long term interests of corporation
   • Ability of the benefit corporation to accomplish its beneficial purposes;
   • And further may consider such actions on the effects on the state, regional or country economy, or other pertinent factors or group interests.
2. The corporation must appoint an independent “benefits director” who sees to & reports on the company’s progress in providing its stated benefit.
3. The corporation must file an annual “benefits report” with the state describing the company’s progress in providing its stated benefit.

A Change in Business Philosophy is Not a Change in Business Success

Again, in a benefit corporation the officers are in no way sacrificing profit for the public benefit. The idea is simply to change the focus, from “profit first” to “profit through benevolence.” This model may not be attractive to some, but at a time when corporate profits and motives are constantly being scrutinized, questioned and even vilified by a skeptical public, this form of business in Massachusetts should not be overlooked by forward looking entrepreneurs. Set up a consultation today with a Massachusetts benefit corporation attorney at our office on Cape Cod.

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]]> https://cape-law.com/massachusetts-benefit-corporation-baystates-new-business-innovation/feed/ 0 https://cape-law.com/massachusetts-recreational-marijuana-business/ https://cape-law.com/massachusetts-recreational-marijuana-business/#comments Tue, 29 Nov 2016 17:10:14 +0000 http://localhost/wordpress/?p=2117 On November 8, 2016, Massachusetts was among the three states whose voters approved a measure for the taxation and regulation of marijuana for “recreational” use. Total state excise and sales tax on marijuana is scheduled to come in at a total of 10% of all product sales. In addition, local towns will be free to […]

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]]> On November 8, 2016, Massachusetts was among the three states whose voters approved a measure for the taxation and regulation of marijuana for “recreational” use. Total state excise and sales tax on marijuana is scheduled to come in at a total of 10% of all product sales. In addition, local towns will be free to tax marijuana sales at up to 2% of the total sales price for product sales. Marijuana products will effectively be permitted for sale to anyone over the age of 21. Medical marijuana dispensaries that open under the state’s RMD licensing program will still be allowed to sell marijuana tax free to qualifying patients, but the future of that market is uncertain at this point.

What Kind of Business Licenses are Available for Recreational Marijuana in Massachusetts?

Whereas the medical marijuana regulations required that an operator manage the entire vertically integrated business, “from seed to sale,” the recreational petition allows for a segmentation of the market. Now, applicants may apply for one of four types of licenses that will cost no greater than $13,000-$18,000 dollars, with similar annual renewal fees. Once the regulatory scheme is established, and after the “Cannabis Control Commission” is established as the licensing agency, applicants will be able to seek licenses to operate 1) a retail marijuana store, 2) a marijuana product manufacturer, 3) a marijuana cultivator or 4) a marijuana testing facility.

UPDATE: The Cannabis Control Commission in December of 2017 issued its first round of draft regulations – Click the following link for a primer on the more popular Massachusetts marijuana business licenses (based on our clients’ interest)

Who Qualifies to Apply for a Massachusetts Marijuana Business License?

Firstly, any business looking to apply for a testing facility license will be able to apply at the latest by October 1, 2017. Other types of licenses, however, will not be granted in as clear of a timeline:

The recreational petition makes clear that experienced marijuana establishment operators will have the first opportunity to apply for licenses to cultivate, manufacture and sell. The term “experienced” is defined by any medical marijuana licensee, or at least a qualifying applicant for a medical marijuana license who submitted an application prior to October 1, 2015.
Once a total of 75 applications are granted for each of the establishment license categories, the Commission will need to open up the application process to all other applicants for those licenses. The act places other minimum time thresholds on the Commission and its establishment to make sure that the recreational regulations are not tied up in a manner akin to the slow and problematic medical marijuana regulations in Massachusetts.

Where Will these Marijuana Establishments be Located?

This law still allows for local towns to control the zoning of Marijuana establishments. Municipalities can adopt the usual zoning regulations, those that govern the time and manner of operations, provided generally that the regulations are not unreasonably impracticable.

And while the term “unreasonably impracticable” may be difficult to define, there are very definite limitations on what types of restrictions towns can impose. For example, a town must put a by-law to a vote of its citizens if a town or municipality intends to 1) prohibit the operation of 1 or more types of marijuana establishment, 2) limit the number to fewer than 20 percent of the number of retail liquor licenses, or 3) limit the establishment to fewer than those permitted for medical marijuana establishments.

What will be Allowed for Personal Use of Marijuana in Massachusetts?

In addition to the new marijuana business licensing scheme, this petition also necessarily liberalizes a number of other laws on the books regarding its possession and use. But of course, there are thresholds to ensure personal users are not also involved in commerce. Specifically, individuals may possess up to 10 ounces and 6 plants, but 12 plants at most in one residence at any given time. Anyone choosing to grow for personal use must be sure to keep those plants hidden from public view and secure from public access.

Individuals are also permitted to sell up to one ounce of raw marijuana (or 5 grams of concentrate), and the freedom to transport these amounts within the guidelines set forth in the regulations. Accessories like pipes and other delivery methods can also be possessed by individuals.

It further provides that the presence of THC, other cannabinoids and active ingredients in marijuana in a person’s blood will not result in many penalties that those individuals might previously be subject, like: the forfeiture of property, the denial of custody or other parental rights of a child, the receipt of donated organs, or working in the industry. Pieces of the law also make clear that contracts concerning marijuana are enforceable, and that property owners will not be able to unreasonably restrict their tenants from using the substance. These last provisions were key in ensuring that all classes of individuals would be entitled to these new rights.

Are There Any Limitations to the Personal Use Allowances?

There are absolutely a number of necessary provisions in this petition that continue to limit certain behaviors for possession, cultivation, processing and use of marijuana. Firstly, the presence of marijuana outside of a sealed package in any motor vehicle will be subject to a $500 civil penalty, a corollary to the “open container” law for alcohol. Naturally too, anyone caught operating a vehicle under the influence will still be subject to those penalties on the books. Any violations of the limits and laws imposed by the state of Massachusetts will result in forfeiture of the marijuana, and also civil penalties.

So What Happens From Here?

The State, and specifically the Governor now must come to terms with the reality of this new law, and put together the team he would like to serve on the Commission. In addition, the state government as a whole will need to find a way to fund the new regulatory and enforcement scheme for recreational marijuana in Massachusetts.

Time will ultimately tell how and when licenses will begin to be issued, but it is highly recommended that any potential entrepreneurs reach out to an experience Massachusetts marijuana business attorney, like our firm, and other like professionals, as early as possible.

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]]> https://cape-law.com/massachusetts-recreational-marijuana-business/feed/ 2 https://cape-law.com/poposed-social-media-privacy-bill-ma/ https://cape-law.com/poposed-social-media-privacy-bill-ma/#respond Wed, 10 Feb 2016 14:43:18 +0000 http://localhost/wordpress/?p=2073 Sandwich, MA – When you work for a company, you represent that company. No one disputes that. Where that line begins and ends becomes a bit been hazy for many employers and employees when it pertains to social media. Senate bill 2063, passed by the Massachusetts Senate and under review by the Massachusetts House Ways […]

The post How Not to Like a Boss – Social Media in the Workplace Bill Considered by Massachusetts Lawmakers appeared first on McNamara & Yates.

]]> Sandwich, MA – When you work for a company, you represent that company. No one disputes that. Where that line begins and ends becomes a bit been hazy for many employers and employees when it pertains to social media. Senate bill 2063, passed by the Massachusetts Senate and under review by the Massachusetts House Ways and Means Committee, attempts to clarify several areas where social media use for work and personal part ways.

The bill states that it is unlawful for an employer to require an employee or applicant to provide user names and passwords for a personal social media account. The same goes for requiring an employee to connect on a social media site (e.g. Facebook friend; follower on Twitter; connect on LinkedIn. The bill also prohibits employers from taking or threatening adverse action against an employee or applicant for refusing to provide social media contact info or connect with their personal social media account.

“For my small business clients, this bill represents another factor to be wary of when training and/or disciplining their employees and developing an employee handbook,” said Attorney Timothy McNamara of Sandwich, MA-based law firm McNamara & Yates.

The bill’s authors, including Senator Cynthia Creem of Newton, introduced the law as a way to curb what they perceive to be oppressive practices by those in authority. There had been cases of this type of abuse at secondary schools, colleges and universities where student athletes were, at times, forced to become friends with coaches on social media so coaches could monitor the networks. That’s why language in S2063 also addresses this issue in a school setting as well, prohibiting schools, teachers, coaches, etc. from requesting a student’s social media user name and passwords; as well as prohibiting adverse action for refusing.

Yet as it pertains to businesses, does the proposed bill go too far?

“How likely is an employer to ask/demand user names and passwords or require you to be a Facebook friend? It seems unlikely, but one never knows and this new legislation will make that abuse illegal. The bill does raise the question about what control, if any, should an employer have over what their employees post on their personal social media,” said McNamara. “Many would be quick to say ‘none’, but what if an employee posts racial epithets, politically controversial opinions, or even disparaging remarks about the company itself on a social media page? Can a business use that as grounds for disciplinary actions or dismissal? Regardless, it’s a near certainty that the public’s attitude towards that employer would be immediately affected.”

Adds McNamara, “It’s an interesting question and another great example why companies need to be very careful in wording social media policies in their employee handbook and to have that reviewed by an attorney.”

Initially entitled S2054, S2063 was passed by Massachusetts State Senate in November 2015. There is no timetable for the House Ways & Means Committee to conclude review of S2063.

For more information on how S2063 could impact your business, you can call McNamara & Yates, P.C. at call 508-888-8100.

“Social means business” – About McNamara & Yates
Founded in 2004, McNamara & Yates, P.C. is a full-service law firm specializing in business law, , estate planning, guardianship, Medicaid planning probate law and bankruptcy. Based on Cape Cod at 128 Route 6A in Sandwich, Massachusetts, McNamara & Yates are committed to providing every client with personal attention and superior legal service at reasonable rates.
For more information, contact (508) 888-8100 or visit their website at https://cape-law.com.

(originally published in Patch.com and other media outlets)

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]]> https://cape-law.com/poposed-social-media-privacy-bill-ma/feed/ 0 https://cape-law.com/massachusetts-sick-leave-law-guide/ https://cape-law.com/massachusetts-sick-leave-law-guide/#respond Wed, 06 Jan 2016 14:21:26 +0000 http://localhost/wordpress/?p=2044 As is often the case, an idealistic law from Beacon Hill with little to no input from business community has dealt another blow to Cape Cod and Massachusetts small businesses. Among many progressive questions presented at the ballot in 2014, the referendum granting mandatory sick time to all employees in the State did pass with […]

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]]> As is often the case, an idealistic law from Beacon Hill with little to no input from business community has dealt another blow to Cape Cod and Massachusetts small businesses. Among many progressive questions presented at the ballot in 2014, the referendum granting mandatory sick time to all employees in the State did pass with a sizable margin. Naturally then, unless disaster ensues we will be working with these regulations for the foreseeable future. And while disaster is unlikely, Massachusetts businesses are nevertheless experiencing some painful adjustments to comply with the law by July 1, 2015, especially in seasonal locations like Cape Cod. We’ve enumerated the following steps in this article as your strategy to navigate these new waters.

Step One: Set the Rules

While the Attorney General regulations only require that an Employer post a notice of the law in a conspicuous location, for the reasons below it will be highly beneficial to also outline an employer’s sick leave policy in much greater detail, in the form of an employee handbook.

Just like with any workplace policy, an employer needs to put her employees on notice, in writing, for the nature of the rules to be enforced. This goes for anything from dress codes, use of business resources, and expectations about professionalism, to tardiness, absence and vacation requests. Obviously, and now more than ever, sick leave needs to be another topic covered by the handbook. The last thing any employer wants is exposure to workplace complaints, and a clearly drafted employee handbook is the first line of defense in any such situation.

Step Two: Know Your Exposure

While every employer needs to institute an employee handbook, not every employer will be impacted by this mandatory sick leave law in the same way.

1. Only employers with more than 10 employees are required to provide paid sick leave. Employers with a smaller staff are only required to provide unpaid sick leave. Part time, seasonal and full-time employees count towards this total.
2. Employees earn one hour of Massachusetts mandated sick leave for every 30 hours worked – in other words, an employee will work 240 hours before a full sick day is earned. No more than 40 hours of total sick leave time may be accrued.
3. While employees cannot use more than 40 hours of sick time in any given year, employees can carry over up to 40 hours from a previous year.
4. Employees entitled to paid sick time must receive their compensation in the same payroll cycle it was used, at the same rate of pay that they normally earn.

5. While employees in Massachusetts can begin to accrue sick time for any hours worked after July 1, 2015, only employees who have been employed by that employer for a total of 90 days may actually begin to use that sick time.

Step Three: Design Workplace Policies that Protect Your Business

While employers cannot modify the law with workplace policy, they can set limits on sick leave that honor Massachusetts sick leave regulations, for example:

• Define and Create Reasonableness – The employee must demonstrate good faith in providing notice to his or her employer. An employer who creates an efficient notification system with one of the many instant communications technologies can more easily show whether that employee used his or her time in good faith. Email, social networks and SMS alike are all obvious options, so long as the employer makes them so.
• Requiring a Doctor’s Note – While technically an Employer can only require certification for sick leave if the employee uses over 24 consecutive hours, it is well within the Employer’s power to ensure that the employee is being truthful. Communicating to employees in advance that illegitimate sick leave will not be tolerated, and that the employer reserves the right to seek verification, can go a long way towards avoiding excessive abuse of the sick leave policy.
• Restrict the Variables – The State’s law applies in very specific circumstances, which are worth remembering for both the employer and employee: 1) to care for a physical or mental illness affecting the employee or family member, 2) to attend routine medical appointments of the employee or family member, or 3) to address the effects of domestic violence of the employee or child. Notice that this does not cover a death in the family, loss of sleep, traffic or just feeling unwell. These laws are intended to be tailored to a very specific purpose.
• Not Redeemable – The workplace handbook should also detail to employees that unused sick time does not result in any payment of the monetary equivalent back to the employee.

Step Four: Get Professional Help

If an employee lodges a complaint about sick time, the burden as always will be on the employer to show compliance. The regulations require that true and accurate records of recording the accrual and use of earned sick time be kept for 3 years. Companies that cannot adequately provide documentation of their employees’ time will therefore face a presumption of non-compliance.

Many companies already use a payroll service, and those same companies are likely going to have an easier time adjusting to the Massachusetts sick leave law and regulations. This is because all payroll services have a recording system already in place for employee hours and compensation, so that only one extra step will be needed to determine an employee’s entitlement to sick leave under the regulations.

Step Five: Do Not Penalize Your Employees

The law requires that under no circumstances may an employer penalize an employee’s legitimately earned and used sick leave time under the law. Such penalties include termination, reduction of hours or delaying payment. And while Massachusetts regulations appear to be written in an unbiased manner, their effect in practice is anything but. An individual need only make a phone call to the Attorney General’s office, and the employer will likely need to call an attorney familiar with the sick leave regulations to form a response and attend any necessary hearings.

So even if an employee appears to be taking advantage of these regulations in some way, it is much safer for the employer to give that worker the benefit of the doubt and document the behavior, rather than to challenge it. This way, if the problem persists and dishonesty is suspected, the employer has a paper trail to support any change in the employee’s duties or employment.

Last Thoughts

While it may certainly benefit Massachusetts employees who were unable to take sick leave for legitimate reasons in the past, the new law is not an obvious win for everyone. Still, with the right policies and practices in place, businesses in Massachusetts will be the front line of defense to make sure that only those employees truly in need will be able to use this law as it was intended. Contact our law office specializing in Massachusetts and Cape Cod small businesses to draft your employee handbook, to protect your business for years to come.

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