BOSTON — The House side of the Cannabis Policy Committee unanimously advanced legislation Wednesday to downsize and restructure the embattled Cannabis Control Commission and to address a handful of industry pressure points like retail license limits, restrictions on medical marijuana businesses, and the emergence of intoxicating hemp products.

All 11 representatives on the committee backed Chairman Daniel Donahue’s recommendation for a favorable report on the 46-page bill Wednesday. It next heads to the House Ways and Means Committee. House Speaker Ronald Mariano earlier this year said a bill to deal with issues at the CCC was an early-session priority.

Frustration with the slow pace of CCC regulatory changes, headline-grabbing internal conflicts and a plea from the Inspector General for the Legislature to intervene at the “rudderless agency” and revisit its “unclear and self-contradictory” 2017 enabling statute combined last summer to compel the committee to weigh a response.

The Worcester Democrat said the bill came about as a result of “listening to the industry, CCC, experts about the challenges that the CCC has been chasing over the past couple years, and some of the ways that we think we can help industry and also reform the commission to be more nimble and more effective in its regulation of the market.”

Created by the Legislature in 2017 after voters legalized non-medical marijuana in 2016, the CCC is a five-commissioner body, with appointments made singularly and jointly by the governor, attorney general and treasurer. Under the bill moving to the House, the CCC would include three people all appointed by the governor, with the governor also selecting one to serve as chair.

Donahue said the idea behind making all CCC members gubernatorial appointees is that it will create a “unified structure” and will make it easier for the CCC to coordinate with other agencies that fall under the governor’s office.

“I think that having this structure is going to help it to kind of focus in on its its role of promoting, regulating and enforcing the cannabis laws,” he said.

Currently, the treasurer appoints the CCC chair.

A CCC spokesperson said the agency “neither lobbies for nor against legislation,” but looks “forward to continued collaboration with the Legislature that would allow the Commission to address needed statutory updates in pursuit of our mission to oversee a safe, equitable cannabis marketplace in Massachusetts.”

CCC Executive Director Travis Ahern said he looks forward to “continued collaboration” as the legislative process advances.

Under the bill advanced Wednesday, the CCC’s chairperson, rather than the entire body of commissioners, would hire the agency’s executive director. Two potentially contradictory sections of the CCC’s enabling statute delineating powers of the CCC chair and the agency’s executive director were among the issues Donahue identified last July in a memo to Mariano.

The bill extends beyond cannabis products that are already under the CCC’s purview to address intoxicating hemp-based products that largely fall into a gray area of the law and between the regulatory cracks. Since hemp-based gummies, energy shot-like drink bottles and seltzers proliferated across Massachusetts convenience store checkout counters and social media feeds in recent years, lawmakers and regulators have already expressed a desire to straighten out what is and is not cannabis, and how it should all be regulated.

Donahue said restructuring the CCC provides the opportunity to straighten out the ambiguity around what agency is supposed to regulate these products. The committee bill would ban the sale of hemp beverages and consumable CBD products unless the product is registered with the CCC and complies with regulations that the CCC would be required to promulgate to deal with things like product testing, labeling requirements and more.

“It’s time for us, I think, to have to step up and look at how we can kind of get ahead of this product, which sometimes … is geared towards children, it might be sold somewhere that’s not age-restricted and, to be honest, we don’t know what’s in it, it doesn’t have the same standard as other cannabis products,” Donahue said. “So with the restructuring of the CCC, we see it as an opportunity … we need to have a place that’s able to kind of set a standard on what is allowable and what’s safe and where it’s at.”

The bill adjusts the existing cap on retail licenses any one operator can hold. The current limit is three, but some business owners have said the cap prevents them from selling their businesses. Under the bill advancing towards the House, the cap on retail licenses would be raised to six over a three-year period, The existing three-license caps would remain in place for cultivation and manufacturing.

Opponents, including Equitable Opportunities Now and the Massachusetts Cannabis Equity Council, have warned that multistate operators are able to spend heavily to increase their market share and that allowing them to grow even more will hurt small and equity-owned businesses.

“We don’t want multistate operators dominating the market. And we’re keeping it to six, which I think is a reasonable number, in this draft of the bill to make sure that we have the competition and that the market share that [multistate operators] would have would be very small,” Donahue said.

The bill also eliminates the requirement that medical marijuana businesses be “vertically integrated,” meaning they must grow and process all the marijuana they sell. Patients and advocates have been calling for that change for years, saying the medical-only options have become scarce across Massachusetts since cannabis was legalized for non-medical use. 

Donahue said medical marijuana retail licenses would be available exclusively to social equity applicants for at least the first three years.