Worcester Business Journal

wbjournal.com | September 16, 2024 | Worcester Business Journal 23 D I V E R S I T Y & I N C L U S I O N F O C U S Social equity cannabis businesses got a boost from state grants in April, but they are still hanging on by a thread while awaiting the larger round of funding Waiting for a LIFELINE Continued on next page BY ERIC CASEY WBJ Staff Writer I n April, 11 Central Massachusetts cannabis businesses that are part of the state's social equity efforts received a combined $530,000 in government funding, a slice of $2.3-million statewide release of funds to 50 businesses. Funded by a portion of cannabis taxes, the first-of-its-kind Cannabis Social Equity Trust Fund is designed to give entrepreneurs from populations harmed by marijuana prohibition and enforce- ment, disproportionately targeting communities of color, a fighting chance to participate in the state's highly com- petitive cannabis industry. "With the Cannabis Social Equity Trust Fund, we're creating a sustainable and inclusive path to the industry for Massachusetts entrepreneurs that have faced barriers to entry," Gov. Maura Healey said in an April press conference announcing the release of the grant funding."is funding will fill critical gaps necessary to allow social equity businesses to grow and succeed here in Massachusetts." First signed into law in 2022, the trust fund's implementation was delayed by flaws in the ways the law was draed, leading to less money being available and a longer roll-out period than initial- ly anticipated. e initial round of funding was meant to be a lifeline for businesses facing mounting debt. e funds helped fill critical gaps, but months later, little progress has been made in making Cen- tral Massachusetts social equity cannabis companies sustainable, as they continue to face the possibility of financial failure. With difficulties in the local cannabis economy and social equity companies treading water, the next steps in the state's program may prove to be a make- or-break moment for both businesses and the social equity program. "We're going to continue being stuck on this hamster wheel that we're on right now," said Ruben Seyde, CEO and co-founder of Delivered Inc., a canna- bis delivery company in Clinton. "is next round of funding can really open up the door for someone like us to pay off immediate needs and then focus on growth." No safety nets Cannabis' illegal status at the federal level has made access to banking and traditional sources of capital near- ly impossible. While still prevented from being traded on American stock exchanges, some of the largest canna- bis corporations in Massachusetts are publicly traded companies in Canada, allowing access to much-needed capital smaller businesses can't secure. Instead, social equity companies like Paper Crane Provisions, an outdoor cannabis farm in Hubbardston which received $50,000 from the state, largely relied on people close to its owners to get their business off the ground, with- out the help of large financial backers or federal support. "You don't have safety nets, like a small business loan. It's really hard to raise money. It's mostly private lending," said Lisa Mauriello, a co-founder of Pa- per Crane who started the business with her husband Boey Bertold. "We talked like family, friends, friends of family. It was like this sort of community, which then adds a whole other level of pres- sure, because it's not just like the bank that you owe money to. It's like people that you love who entrusted, in some cases, their life savings to you." e need for financing can be exac- erbated by the incredibly long time it can take to get a Massachusetts cannabis business to the point where it's bringing in revenue, as a mirage of regulations at both the local and state level, along with remaining stigma, create a seemingly never-ending path of roadblocks and deadends. Finding a municipality willing to welcome a cannabis business can be difficult, even in places where a majority of residents cast ballots in favor of legal- ization back in 2016, said Bertold. "ere are just so many processes in- volved," he said. "It can sometimes take one or two years just to get an agreement from the municipality to move forward with your business. ere's no real defi- nite answer that you're even going to be able to commence operations." As a result, almost six years aer the The cofounders of Delivered Inc., a cannabis delivery company in Clinton, are hope- ful the next round of state social equity funding can help their business grow. Boey Bertold and Lisa Mauriello, founders of Paper Crane Provisions in Hubbardston PHOTO | MATT WRIGHT PHOTO | COURTESY OF PAPER CRANE PROVISIONS

• Cover