Worcester Business Journal

wbjournal.com | July 6, 2020 | Worcester Business Journal 11 positively impact the community. But while this is required for every applicant seeking any marijuana establishment license, locally-owned cannabis compa- nies have a better reputation for doing so, and for being more meaningfully invested, said Alex Guardiola, director of government affairs and public policy for Worcester Regional Chamber of Commerce. "We don't want someone coming in just because they can get a license," he said. "We want neighborhood people and social justice to be a part of it." Guardiola said the chamber views cannabis businesses like businesses in any other sector, and when it comes to the Worcester economy, it's very much centered around small neighborhoods where residents are known to walk to and support the small businesses em- bedded in their communities. "Neighborhood places are kind of how we keep our economy stimulated," Guardiola said. While the city has a positive rela- tionship with some large box stores, Guardiola said, they're not looking for the box store equivalent of a cannabis corporation to take over the sector. But some of those giant corporations have already made Worcester their home. Worcester has five cannabis dispensaries, and they span the gamut between big and small businesses. On the most local end of the spectrum is Resinate, which runs a medical dispensary on Millbury Street and whose CEO, Peter DeCaro, is a Worcester native. Resinate is the only dispensary in the city whose company solely operates in Massachusetts. Next is Diem on Graon Street, an Oregon cannabis company and the most recent dispensary to open in the city. On the far end of the spectrum are Mission on Lincoln Street and e Bota- nist on Pullman Street. Mission operates in Maryland, Michigan, Pennsylvania, Illinois and Arizona, as well as Massa- chusetts, according to its website. Mis- sion Dispensaries is owned by 4Front Ventures of Canada, which reported $64.5 million in 2019 sales across its brands, according to its earnings report. e Botanist operates in Massachu- setts, Maryland, New York, Florida and California, and is owned by Acreage Holdings in New York City, which re- ported $74.1 million in revenue in 2019, according to its earnings report. In the middle of the five is Good Chemistry, which operates in Colora- do, but whose CEO, Matthew Huron, has significant family ties to the city, effectively making the company a local, big-business hybrid. Part of Huron's ex- tended family still lives in Worcester, he said, and until the COVID-19 pandemic, he said he visited as oen as possible. "My personal ties to Worcester really amplified my desire to do business there," Huron said in an email in- terview. "I initially chose Worcester because of my family connection and my love of the city." Good Chemistry is self-funded, said Huron, and he described it as a relatively small company. His grandmother, aunt and other family members attended the company's grand opening, and as a busi- ness, Good Chemistry looks for tangible ways to give back to the community, like when it donated $50,000 to the Worces- ter Together Fund earlier this year. Good Chemistry has "always worked to create an operation that would make our family and the Worcester communi- ty proud," Huron said. Local is an equity issue e Massachusetts cannabis industry, according to the 2016 ballot measure legalizing the recreational side of things, is supposed to prioritize the economic interests of communities of color, as well as communities disproportionate- ly impacted by the War on Drugs. In that vein, the CCC oversees not only the social equity program, but also the Economic Empowerment Program, a licensing status intended to prioritize applicants who meet certain criteria showing they are disadvantaged com- pared to typical applicants. But licensing is only part of the battle for disadvantaged business enterprises when the state is required to give priority to pre-established, vertically integrated cannabis companies who have already gotten their businesses off the ground. A 2019 report on Women and Minori- ties in the Cannabis Industry, compiled by the trade publication Marjiuana Busi- ness Daily, indicates 84% of operational cannabis businesses in the United States used their founders' own savings or personal debt to launch their enterprise, with 8% reporting some degree of help from venture capital or private equity firms, and 11% receiving assistance from angel investors. (e survey allowed for multiple responses.) At the same time, the report points to data from the Federal Reserve Board's 2016 Survey of Consumer Finances, which reported a median household net worth of $171,000 for white households, and $17,600 and $20,700 for Black and Hispanic households, respectively. If the bulk of operating cannabis com- panies used personal funding to launch their businesses, then the data indicates what is widely reported anecdotally: Black and Hispanic entrepreneurs are much more likely to have a hard time gathering the funds needed to start a cannabis company. At the same time, only 8% of approved or pending recre- ational cannabis licensees in the state are minority-owned, while U.S. Census data indicates one fih of the Mass. popula- tion are people of color. To that end, people of color in Massa- chusetts, according to the data, are less likely to have the funds to start a canna- bis business in a regulatory environment prioritizing licensing large companies to begin with. Notably, Mass. doesn't put capital requirements on new cannabis business- es, as is the case in some other states, said Commissioner Flanagan, which lessens the barrier for entry to an extent. Still, in an industry still getting off the ground, national heavy hitters have already set up shop, and what impact that will have on small startup companies, and particu- larly disadvantaged business enterprises, has yet to pan out. W I prioritize shopping local F L AS H P O L L Do you look for local business alternatives before making purchases from large, national corporations? The confluence of the coronavirus pandemic shuttering businesses and a renewed push behind the Black Lives Matter movement has bolstered calls to support local businesses, and particularly those which are owned by people of color. Proponents argue, aside from supporting the local economy, where you spend your money is a concrete expression of one's values. When polled online, nearly 9 out of 10 WBJ readers say they prefer to shop local. 6% No, it's typically too time consuming to research local alternatives. COMMENT: "I think most people say they shop local but not often the case." Yes, shopping local is always my first choice and priority. 26% Yes, but it's sometimes challenging to find affordable, local options. 38% Yes, I am making it a larger priority after the events that unfolded recently. 22% 4% 4% No, local options are almost always too expensive. No, a lot of my purchases aren't available in the local market. PHOTO/NATAHN FISKE

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