The MA cannabis reform bill passed, so now what?

“Now What!?” that’s what I and other Social Equity Participants (SEs) are left wondering, now that the dust has started to settle after Massachusetts Governor Charlie Baker signed Senate Bill 3096 (the Bill), the much-anticipated cannabis reform bill, into law.

There was plenty of excitement in the weeks leading up to the passage of the Bill. And why shouldn’t there be? Massachusetts is finally going to make good on its promise to create a diverse and equitable cannabis industry- a task which up until now it has utterly and completely failed at, leaving communities disproportionately impacted by the war on drugs struggling to enter the space and bleeding time and money in the process. However, according to industry advocates, regulators, and operators, the Bill is supposed to provide the Commonwealth with the tools it was so desperately missing in order to prop up this segment of the industry.

For some background, lawmakers in Massachusetts have a moral and legal obligation to create an equitable cannabis industry. Morally, states have an obligation to rectify the negative effects of prohibitionist cannabis policies that predominantly impacted black communities and people of Latin American descent and in recognition of this disparate impact and its moral obligation, the Massachusetts legislature established a legal obligation by passing the “Regulation and Taxation of Marijuana Act” of 2016 (the Act), which was enacted after Massachusetts residents voted to legalize and regulate cannabis.

The Act states: 

“The [Cannabis Control] Commission shall… adopt regulations… procedures and policies to promote and encourage full participation in the regulated marijuana industry by people from communities that have previously been disproportionately harmed by marijuana prohibition and enforcement and to positively impact those communities.”

Guided by its moral and legal obligation to create an equitable cannabis industry, Massachusetts regulators gave birth to the Social Equity (SE) and Economic Empowerment (EE) programs. The SE and EE programs were supposed to level the playing field between big corporations with millions of dollars and those who were disproportionately impacted by the War on Drugs. These programs were created with the best possible intentions, to provide training and tools to help individuals from communities disproportionately impacted by the war on drugs enter the industry, but as is often the case with new innovative thinking, the results have left a great deal to be desired.

So with that backdrop, the Bill is supposed to usher in a new era of equity in Massachusetts by addressing some of the biggest barriers keeping individuals from communities disproportionally impacted by the war on drugs out of the cannabis industry, which includes things like increasing access to financing and providing oversight of the often-abused Host Community Agreements (HCA) process.

The access to financing comes in the form of a Social Equity Trust Fund. This fund is supposed to provide low-interest loans and grants to SEs and EEs. While this also comes from good intentions, it’ll be interesting to see the implementation of this Fund. As of today, there is no language in place to begin issuing financing. There are many SEs and EEs struggling and on the brink of financial ruin, so this fund can’t launch soon enough.

In addition, I can’t help but be worried about the HCA reform portion of the bill. The CCC now has the authority to review each applicant’s HCA before approving their Provisional License. In order to accomplish this review, the bill says that the CCC will have up to 90 days to review each applicant’s HCA.

As it stands, the licensing process has been an absolute disaster, bordering on a sadistic joke (just ask anyone out there going through this process). In theory, the CCC has 90 days after receiving an application to approve or deny it. The CCC has rarely met its initial obligation to get documents back to applicants within 90 days. What's going to happen when this new review process is implemented? Will the licensing process now take a minimum of 180 days to review both the application and the HCA?

In addition, the language in the bill makes just about every executed HCA out there illegal. That is because the legislation states that municipalities are not allowed to require a flat fee for their HCA, but if you look at 99% of the executed HCAs out there, just about every municipality requires a flat 3% of our yearly gross revenues as their “Community Impact Fee.” 

Yes, the intentions here are good- the state realized that previously, the HCA requirement had no checks and balances, which allowed municipalities to abuse this requirement (see Fall River). This abuse of the HCA requirement made it exponentially harder and more expensive for minorities and SEs to enter the industry.

So in an effort to curtail this, for lack of a better word, extortion from municipalities, the Commonwealth reformed this requirement by allowing the CCC to review these HCAs and force municipalities to renegotiate them if there is anything illegal in them. Great!

But what happens in situations like mine, where my company, Delivered, Inc, submitted our application over 90 days ago, but we have yet to receive our Provisional License? Will the CCC now go back, and take another 90 days to review our HCA with the Town of Clinton which is technically illegal, only to come back and tell us that we have to renegotiate this HCA? This would delay us at least another 3-6 months, while we wait for the CCC to review the HCA, wait for public hearings in Clinton to renegotiate it and re-submit our application to the state to wait more for the license.

That’s thousands and thousands of dollars down the drain for my company! From leases to utilities, to salaries, we will be burning through our very limited budget while we wait for all of this to sort out.

So, I beg you, Cannabis Control Commission of Massachusetts, please don’t mess up the rollout of these new laws, there are real people and families suffering while you’re sitting behind your desk with all of this paperwork.