The Massachusetts State Senate unanimously approved changes to current marijuana laws and regulations on April 7 in an effort to make the industry more equitable for racial groups who have been disproportionately targeted by drug arrests.
State Senator Sonia Chang-Díaz — a sponsor of the bill — said in a press release that the bill will lower entry costs and make capital more accessible for “many talented equity entrepreneurs.”
“Addressing racial justice in our state means getting real about closing our cavernous racial wealth divide,” Chang-Díaz stated in the press release. “With this bill, Massachusetts will reclaim our leadership role, carving a path to make equity a reality in the cannabis industry.”
The bill will allow the Cannabis Control Commission to regulate excessive fees charged through Host Community Agreements, create the Cannabis Social Equity Trust Fund by using 10% of the funds collected through excise taxes and allow the creation of cannabis cafes.
HCAs are contracts between the operators and municipalities that usually require operators to pay a high fee to offset the presumed negative effects of their business on the community. Under the new regulations, municipalities cannot charge operators more than 3% of their annual gross sales and the fee must be “reasonably related” to their impact on their host community.
“We’re seeing towns and municipalities charge cannabis businesses for all kinds of expenses that are not directly related to business. So this provision would just clarify that to bring those costs back and make the industry more profitable,” an official from the Chang-Díaz’s office said.
Jeffrey Moyer — a guest lecturer at Northeastern University who researched the legalization of cannabis in the state — said there is no evidence indicating the fees collected from HCA agreements were being used to offset potential negative impacts.
“The Host Community Agreements, the impact fees that we primarily identified, just don’t really represent value added,” Moyer said. “They don’t really mitigate any identifiable harms that cannabis businesses could potentially bring to town.”
The bill would also allow public consumption of cannabis on the premises where it is sold if approved by residents of the city and in cannabis cafes. Despite being legalized for adult consumption, cannabis currently can only be consumed on private property, making it difficult for renters and tourists to legally consume it.
The Cannabis Social Equity Trust Fund will provide grants and loans — including no-interest loans and forgivable loans — to social equity program participants and economic empowerment priority applicants.
The average cannabis shop in Mass. costs roughly $1 to $1.5 million in liquidity, and around $3-$5 million for manufacturing facilities, according to Chang-Díaz’s press release.
Aaron Goines, the president of the Massachusetts Cannabis Association for Delivery, said opening a marijuana operation is a very lengthy and expensive process and can only be afforded by people with “deep pockets.”
“Getting into marijuana is tough,” Goines said. “It’s very cost intensive, you know, because of the way the regulations are written all the way down to the municipalities.”
Federal cannabis laws prevent businesses from obtaining traditional bank loans, which is a barrier for many minorities and historically disenfranchised populations looking to participate in this industry.
“It’s just been very difficult for minorities, in general, to get into it,” Goines said “I think it could change a lot for this industry. Hopefully, over time the industry can look more reflective of what our society actually looks like. The greater racial sort of makeup, economic makeup.”
Goines said in order to obtain an HCA, an individual needs to secure the property beforehand, which can take about two months. A potential marijuana business would also need to have architectural, security and other plans in place before applying for a provisional license from the CCC, Goines added.
“During that time, you’re burning through a lot of cash,” he said. “You’re trying to lock up a property, there’s rent that you’re paying on an empty building.”
Moyer said he is skeptical of the impact the social equity fund will have and whether it will be completely effective.
“While there’s a potential for social equity programs in the context of cannabis, I think it’s also something where there’s a lot of potential challenges, potential mines in the road,” he said. “The answer of whether they will be successful in their purposes is still remains to be seen.”
Goines said he hopes Massachusetts will act as a blueprint for other states pushing cannabis reform.
“I’m just glad that Massachusetts is getting it right. It’s not going to be perfect, but what I’m praying is that this going to end up being a blueprint of which other states, who are just now getting into it, don’t have to go through the heartache and the long time to get there like we had to,” Goines said
It should be legal for the 1s with metal health issues like me and I know of 100 people that it can be very helpful in there state of mind like ADHD and more . Thank you for reading my story
I have never read anything with such stupidity in my life now not being able to afford marijuana is racist how stupid are the politicians in this state this is ridiculous