| Correspondent
Lawmakers and activists hosted a virtual rally April 28 to support House Bill 4440, a piece of legislation that some are dubbing “legalization 2.0.”
If passed, the legislation would represent the most significant reform of the Commonwealth’s cannabis laws since legalization was first signed into law in 2017. The bill’s Senate counterpart — S. 2660 — was recently passed by unanimous vote, allowing activists to focus on making a final push for the House to pass the legislation before the end of the legislative session on July 31.
While Massachusetts was the first state to make it a goal to use cannabis legalization to attempt to repair harms caused by marijuana prohibition that was wielded primarily against communities of color, both activists and progressive lawmakers have been frustrated by the lack of tangible results. Social equity businesses currently make up fewer than 8% of cannabis businesses in the state.
“We wanted to provide a pathway into this now legal industry for people who had been harmed most by prohibition, people who had been traditionally left out, or locked up,” Sen. Sonia Chang-Diaz told attendees of the virtual rally that was organized by EON, a Massachusetts organization working to ensure equitable ownership opportunities in the cannabis industry for Black communities. “Our intent was good, but so far our reality has failed to live up to that promise from 2017.”
Chang-Diaz is co-chair of the Joint Committee on Cannabis Policy and is also running for the Democratic nomination for governor.
The proposed legislation would allocate 20% of the state cannabis excise tax to the creation of a trust fund for social equity applicants. It would be used to fund interest-free loans to members of the social equity program, allowing vital access to the necessary capital to launch their cannabis related business.
Applicants and activists have routinely identified the lack of access to capital as the largest roadblock for social equity applicants. With the lack of legal banking access for cannabis businesses, social equity applicants are usually forced to seek capital from private investors, often with predatory interest rates and contracts that require giving up a large portion of control of the company.
Sen. Chang-Diaz acknowledged the urgency of the matter, with many large out-of-state companies eyeing the Massachusetts market, and many social equity applicants struggling to pay rent for the properties they’ve obtained as they wait for licensure.
“We have a window here, but it’s not a huge window in time,” she said. “If we don’t get this legislation done and on the governor’s desk for signature by the end of this fiscal year, we are going to have to wait a whole other year before we get that money flowing into the hands of Black and brown entrepreneurs.”
In addition to the creation of the social equity trust fund, H.4440 would also create additional regulations governing community host agreements, which are a contract that all cannabis businesses must sign with the municipality they are located in to be able to obtain state licensing. Ostensibly, the purpose of these agreements is to offset the cost imposed on a municipality by hosting a cannabis business, but in reality, cities and towns have been using this process to extract as much revenue as possible from cannabis businesses, sometimes over $250,000 a year.
While the law requires cities and towns to justify these fees by listing the costs that have been imposed on them by hosting a cannabis business, many have not, resulting in lawsuits from several cannabis business owners.
This bill would give the Cannabis Control Commission the ability to regulate these host agreements, which would allow them to ensure that municipalities are not taking more than the 3% of gross sales that they are allowed under the law, and will also help ensure that the alleged costs of hosting a cannabis business are being properly documented.
Some social equity applicants have been forced to wait over a year for the municipality their business is located in to give them a community host agreement, like Chauncy Spencer of Sankofa Cannabis.
Speaking at the rally, Spencer detailed a number of ways that various municipalities have given him the run-around when it comes to attempting to acquire the necessary paperwork and support to obtain a license from the state. Despite being previously incarcerated for cannabis offenses, Spencer said his application to the city of Boston was met with indifference, and in another municipality, a wealthy white developer purchased the property he was interested in solely to block his ability to open a cannabis dispensary there.
“We don’t have the opportunities for creating generational wealth. Cannabis is one of the fastest growing industries in the country. This is our opportunity,” said Spencer, pointing out the lack of opportunities for people of color in other growing industries. “For businesses and politicians to just meet us with cruel indifference and stop us from moving forward is tragic. We need people to go out there and fight for these opportunities.”