By Haylee Carlyle
8/14/2018
The social equity program in Massachusetts’ recreational cannabis law is not erasing barriers to entry. The mentorship-like program targets individuals and minority communities disproportionately affected by the War on Drugs, but those people are having a hard time just crossing the threshold to assistance.
While existing medical dispensaries slowly obtain licenses, not a single equity applicant in the state has completed a recreational license application.
Equity policies give legs up, like first consideration to licensing, to applicants convicted of drug crimes or businesses employing a certain amount of people with such convictions, and residents of areas with high poverty and arrest rates for drug crimes.
The regulatory power of cannabis law in Massachusetts, the Cannabis Control Commission, is in charge of doing community outreach to those areas to educate people on how to enter the legal cannabis market. However, the CCC’s Citizen Review Committee has criticized the Commission for not making that information accessible enough.
Arjun Singh did marijuana policy research for Bob Massie’s gubernatorial campaign. He learned from studying cannabis markets in cities like Denver and D.C. that tangible, face-to-face communication is the best way to teach people about new laws.
“A lot of people didn’t even know you needed a license to open a pot shop,” he said about the outreach problem in Boston. “A lot of people don’t realize how liquor licenses are different from beer and wine licenses. They don’t have MBA’s.”
The Citizens Committee is in the process of submitting outreach suggestions at the Commission’s request, but cannabis diversity inclusion activist Tashonda Vincent-Lee said damage was done to outreach with the state’s delay in policymaking. At The Boston Globe’s cannabis luncheon in June, she said, “Folks weren’t getting their ducks in a line. It seems like a lot of people were sitting back and watching to see what they could do and how they could move.”
After prospective licensees learn about the opportunities for entrance into the industry and make it past the licensing process, which none have done yet, what may be an even larger hurdle lies at the most local level.
One of the biggest issues program applicants are facing are host community agreements, which the CCC does not control. Every cannabis business in the state is required to reach a community agreement on impact fees and zoning restrictions negotiated with the municipality the business is in.
While state officials have rolled out a comprehensive social equity program, no municipality has put in place a municipal equity ordinance to mirror it. With the few recreational licenses that have been administered, it’s still up to local government to decide if the businesses that received them can even operate. If they can’t, municipalities issue a ban. If they can, they draw up a host agreement.
Laury Lucien is an attorney and economic empowerment applicant out of Hyde Park. She is in the licensing process for a dispensary she plans to open in the suburbs. “One of the great ways to get legal moving is with taxation,” she said about getting local municipalities to support equity applicants and small businesses. “If they’re not going to benefit from it, we’re not going to get them to move.”
The contracts include a community impact fee of up to 3% of gross sales, as restricted by the Commission, and explicit zoning rules. But because of the competition, municipalities are asking for more and big business dispensaries are giving it to them.
Singh said in places like California, the rush to open the recreational market saw a lot of big companies moving into the industry.
“If you don’t put an emphasis on saying this is for local business or disenfranchised businesses, you risk out of state companies coming in because they have the infrastructure and the lawyers,” he said. “And you get to the point where- is this industry more equitable, or did we just put more money into it?”
CommCan, a marijuana company that has existing medical dispensaries in three locations around the state, signed an agreement with the town of Medway in May in which they will pay over $800,000 for their cultivation center there. That negotiated price was not based on any revenues or prospective impact cost of the facility, which actually makes the agreement illegal.
Because there is a cap on the number of licenses to administer, bidding wars often ensue. Existing medical dispensaries and cultivation centers like CommCan, which are almost all white-owned, can outbid small businesses by offering the communities deciding who to give licenses to, these large financial packages.
Sira Naturals, a medical dispensary in Cambridge and the first company in the state to receive a recreational license, agreed to pay the town of Milford $250,000 annually for their expansion there. And because fees are not based on scale, a 20,000 square-foot cultivation center pays the the town the same amount as a small yoga studio does.
The CCC, which put restrictions on municipality power, does not review agreements to make sure they are not exceeding the maximum three percent of sales or allocating the money for costs unrelated to the business impact on the town. The Commission voted last December to only review the contracts for required signatures, not for adherence to the guidelines.
Massachusetts state officials are attempting to remedy the issue by restricting large companies to 3 licenses and putting a 5-year limit on community agreements.
Retired Judge Leslie Harris, of Roxbury, is a member of the CCC’s Citizen Review Committee made up of representatives of disproportionately affected areas.
His concern is that municipalities which place moratoriums or an outright ban on cannabis companies still reap the tax benefits from other businesses, like economic empowerment-owned businesses, in the state.
That’s not equity,” he said. “Equity is not just giving some of us the opportunity to own a business, because that’s going to be a very small number of people. It’s about the greater community who has suffered.”
City Councilor-turned-Cannabis Company CEO Tito Jackson is also from Roxbury, a predominately minority neighborhood. He thinks that a lack of data collection in the industry is facilitating the its racial disparity.
“Cities and towns should really look at the number of owners of color, veterans, women and people from the LGBT community. If you don’t measure things, then you don’t meet the objectives and goals of what you have,” Jackson said. “If we’re really trying to empower the people who have been left behind and have been locked out of this space, we need to be aggressive.”
In July, Hawaii State Representative Tulsi Gabbard introduced the Marijuana Data Collection Act, a bipartisan commission of data collection on the economic and criminal justice impacts that cannabis legalization has in each state.
While the collection would keep track of job growth and public health concerns like youth and opioid use, it wouldn’t track the demographics of industry participants, so initiatives for social impact measurements are still lacking.
Amendments and additions are regularly being made to Massachusetts’ new cannabis law, which is why the rollout of licenses has been so slow. State officials are worried about making hard-to-reverse mistakes with social equity like Colorado and California have. The CCC takes general inquiries and feedback on their website on a rolling basis.
Minority industry leaders, amongst an enduring lack of representation, are hoping to invigorate the market and attract prospective colleagues through their own participation.
“We have a desire to infuse people with energy,” Lucien said. “They need someone to come and shake them open and say ‘Hey, you’re alive. Smoke some weed.’”
