Worcester Business Journal

14 Worcester Business Journal | June 13, 2022 | wbjournal.com Marijuana reform Proposed laws nearing passage in the state legislature seek to make the cannabis industry more equitable and prevent local governments from demanding too much from businesses F O C U S B U S I N E S S O F C A N N A B I S BY ALEXANDER MACDOUGALL WBJ Staff Writer T he legalization of adult-use cannabis in Massachusetts in 2016 signaled a new era in the state's attitudes towards the crop. Once villainized during the War on Drugs, its legalization opened the doors for a plethora of new legal dispensaries, along with a new stream of cash for municipalities willing to benefit from this new method of income. Baked into the ballot initiative and later the 2017 law setting up the regulation for the industry was the need of righting historical wrongs brought on by the drug's former criminalization. Many remained incarcerat- ed for selling a drug that was now legal. Many poor communities, and communities of color, had been particularly targeted in the name of the War on Drugs. If cannabis was going to be legal in the state, then the industry need to be designed in a way to make sure those harmed by its illegality would benefit. Now, six years aer cannabis legalization in Mas- sachusetts, it's clear the fledgling industry remains unequal. e industry remains overwhelmingly white and male: According to data from the Massachusetts regulatory body Cannabis Control Commission, 79% of marijuana establishments are owned by white men, compared to 10% owned by people of color. In terms of gender, 92% are owned by men and 8% are owned by women. But two new bills, introduced by the Massachu- setts Senate and House of Representatives, aim to make good on that promise of bringing equity to the Keith Cooper, CEO of Revolutionary Clinics in Fitchburg, said lack of access to capital impedes smaller operators from overcoming the startup costs of opening a cannabis business. Marijuana products for sale at the Leicester cannabis dispensary Sunnyside Cannabis cannabis industry. Both bills have resoundingly passed in their respective chambers, and they now await a leg- islative committee to consolidate both bills into one, which will then need to be voted on again by the House and Senate before the end of July. Once passed, it needs the governor's signature to go into law. "is is the first really con- solidated omnibus bill that has happened since the legalization of adult-use cannabis in Mas- sachusetts," said Jen Flanagan, the director for regulatory policy at the Boston office of Vicente Sederberg LLP, a law firm specializing in cannabis law and helping dra legislation for cannabis bills in multiple states. "It's a really big deal." Funding social equity & limiting HCAs Flanagan, who previously served on the CCC, as well as in the state Senate and House, said the bills, which passed in the House on May 18 and the Senate in April, puts a mechanism in place to create a trust fund to support the the commission's social equity program, which supplies training and technical assistance to as- piring cannabis entrepreneurs in areas which have been disproportionately impacted by the War on Drugs. e CCC lists 29 towns and cities as areas of dispro- portionate impact. It includes four of the five largest cities in the state (Boston, Worcester, Springfield, and Lowell) but only counts certain census tracts within those cities. e bills' second key provision is greater transparen- cy for the host community agreements that marijuana businesses must obtain from the city or town govern- ments where they operate. e 2017 law passed by the Massachusetts legislature capped the fees and taxes host communities could collect at 3%, but the CCC declined to enforce that provision in the agreements, saying it didn't believe it had the authority. at led to HCAs becoming a pay-to-play system, said Adam Fine, a managing partner at Vicente Seder- berg. "ere was at least a perception that the more well-funded operators would just kind of offer more," Fine said. "e cap was supposed to be at 3% of gross sales, but people were actually giving more than that, in offering charitable donations and offering to pay for sidewalks and police detail and all these other things." e lack of oversight meant some municipalities charged more than the cap, effectively extorting marijuana establishments. e most egregious case of this occurred in the Fall River, where former mayor Jasiel Correia was sentenced to six years in prison for fraud and corruption aer being convicted of extorting cannabis businesses. e new consolidated bill will look to ensure the 3% cap, as well as require municipalities to disclose where money received through an HCA will be spent, said Fine. "It gets rid of any of the ambiguity in the language," he said. "It's absolutely clear that 3% is the max, and importantly, you're going to have to document the actual cost." Central Mass: the cannabis capital e first major reform of cannabis legalization in the state is of particular importance to Central Massachusetts, which data shows is the center of the cannabis industry in the state. According to the CCC, 220 marijuana establishments are based in Worcester County, more than the next two counties, Middlesex and Plymouth, combined; and the CCC is based in Worcester's Union Station. Keith Cooper, who runs the grow facility and Jen Flanagan, former Cannabis Control commissioner Continued on page 16 PHOTO | COURTESY OF REVOLUTIONARY CLINICS PHOTO | NATHAN FISKE

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