Worcester Business Journal

wbjournal.com | November 27, 2023 | Worcester Business Journal 9 W companies that go out of business, and a few of them are going to be delivery companies," Seyde said, "We need the regulations to loosen up, and we also need the social equity trust fund to open up." Seyde is referring to a fund created by lawmakers in 2022 allocating money from cannabis taxes to loans and grants for social equity participants. A functional fund could provide millions to businesses who are in desperate need, but it could be too little, too late. "e $2-4 million that the state anticipates for the cannabis equity fund this year and the approximately $25 million the agency will disperse in future years doesn't come close to meeting the needs of the moment to undo the historic disadvantages equity businesses face," said Kevin Gilnack, co-chair of Mass EON, an organization seeking to reduce barriers preventing people of color from becoming participants in the industry. In addition to the state fund, potential upcoming changes in federal cannabis banking regulations could allow for small cannabis businesses and social equity applicants to access loans from the U.S. Small Business Administration. Michael Marinaro, founder and CEO of Bada Bloom, a social equity company with plans for a cultivation facility in Tyngsborough, among other ventures, thinks access to these funds could be a gamechanger. He's hopeful they could provide enough support for cra growers like himself to get a chance to impress consumers with high-quality products, which can be tough to find as cultivators race to grow weed for as cheap as possible. "We're starting to see an increase in cra cannabis," he said. "It's really looking like consumers are starting to be conscious about what they're purchasing." Cannabis cafes While the state's attempt to use delivery as a tool for advancing equity has so far been more of a boondoggle than a boom for social equity program participants, the eventual opening of social consumption sites could serve as an additional pathway to make the industry more equitable. ese businesses would offer a place for patrons to buy and consume cannabis, similar to what's done in a bar with alcohol. e CCC is holding a working group in an attempt to cra regulations to allow state-licensed cafes to open. Kyle Moon didn't wait around for the state to create licenses. Instead, he created the Summit Lounge, a bring- your-own-cannabis private consumption lounge on Water Street in Worcester. Summit opened in 2018, aer Moon like 'I want out. is is too painful.'" Elevated competition Massachusetts has 327 recreational stores that have been given permission to open, according to CCC data, just a few dozen stores shy of having one store for every one of the state's 351 municipalities. Of course, dispensaries aren't spread evenly across the state. About one third of municipalities banned recreational weed stores from operating within their borders, and those who haven't oen have strict zoning, resulting in stores being clustered together and increasing competition. In response to concerns over closures, the CCC noted in September only five marijuana retailers have surrendered licenses or let them expire, just 1.6% of dispensaries. However, these statistics don't offer the full picture. Companies hold onto their license aer they shut down in the hope of finding a buyer, meaning these closures aren't reflected in statistics. Trulieve, one of the largest cannabis companies in the country with 180+ stores in eight states, formerly operated dispensaries in Worcester, Framingham, and Northampton, but in June, the company announced its withdrawal from Massachusetts. Despite this, Trulieve continues to be listed on the CCC's "Find a retailer" page on the agency's website. Other dispensaries have seemingly closed for good but appear to maintain licenses, which cost $10,000 to renew. Uncertain future of equity Finding funding remains a hurdle for canna-businesses, and this problem is unlikely to disappear soon. is is particularly true for participants in the state's social equity program, which is designed to provide pathways into the industry for residents of communities disproportionately harmed by marijuana prohibition. One step regulators took to help social equity applicants was to set aside cannabis delivery licenses exclusively for participants in the CCC's social equity program for a period of three years. While delivery businesses have now been up and running since July 2021, it remains to be seen if they end up playing a larger role in the next five years, as they've struggled to tap into an crowded market where consumers are used to driving to the nearest dispensary. Ruben Seyde is the founder and CEO of Clinton-based Delivered Inc. e company made its first delivery in July. Business has been reasonable, but not enough to overcome the costs of operating, a common problem. He fears more companies will soon start folding. "ere's definitely going to be more "You've got to constantly be adapting to the shiing market to capture the consumer," Moon said. Content with his business, Moon said he'll have to take a look at the final rules before he considers trying to obtain a state license, noting past proposals would have banned customers from bringing their own cannabis. "What are you trading for?" he asked. "I'll have to tell all my customers 'You can't bring in your home grow. You have to purchase from me.'" applied for a smoking bar license with the City of Worcester, without telling government officials exactly what would be smoked. Moon has constantly tweaked his business plan and is now hosting a regular schedule of events. He said offering experiences going beyond just getting high will be key for these businesses to succeed, something regulators are trying to wrap their heads around as they write rules to balance public safety with business viability. Mass. shouldn't have cannabis cafes The Massachusetts Cannabis Control Commission has established a working group to help determine rules and regulations for social consumption licenses, where businesses can sell marijuana products to customers for on-site use, similar to bars for alcohol. These businesses, commonly referred to as cannabis cafes, already exist in other states where cannabis is legal. When polled online, a slight majority of WBJ readers said Massachusetts shouldn't allow for these types of businesses. Should Massachusetts allow for cannabis cafes? F L A S H P O L L Yes, though the locations of these businesses should be off the beaten path. Yes, it will bring Massachusetts cannabis business more in line with competitor states. 44% 5% No, cannabis should only be consumed on your own property. 26% No, cannabis shouldn't have been legalized in the first place. 25% Jason Reposa, found- er of Good Feels Attendees explore the show floor of the Harvest Cup, an annual trade expo and cannabis competition featuring companies from around New England. This year's Harvest Cup was held on Nov. 11 and 12 at Worcester's DCU Center. Brought to you by:

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