Worcester Business Journal

24 Worcester Business Journal | September 16, 2024 | wbjournal.com F O C U S D I V E R S I T Y & I N C LU S I O N Continued from previous page Social equity cannabis grantees Central Massachusetts recipients of the Immediate Need Social Equity Cannabis grants Commenced Business License type(s) Funding operations? Apple Guy Flowers, Uxbridge Outdoor cultivation $50,000 No Delivered, Inc., Clinton Delivery $30,000 Yes Dris Corp., Natick Delivery $50,000 Yes KindRun Massachusetts, Delivery, courier, Hudson manufacturing, third-party transport $50,000 Yes Major Bloom, Worcester Retail, manufacturing, courier $50,000 Yes New Dia*, Worcester Retail $50,000 Yes Paper Crane Provisions, Hubbardston Cultivation $50,000 Yes Royal Sun Farm, Hubbardston Cultivation $50,000 Yes Teddy's Veggie Farm, Cultivation, manufacturing, Worcester delivery, courier $50,000 No Treevit, Athol Courier $50,000 Yes Uproot, Worcester Cultivation, manufacturing, delivery $50,000 No * Operates under the brand name Cookies Source: Massachusetts Cannabis Control Commission first retail sale of recreational cannabis in the state, some Central Massachusetts social equity companies are still working to just get their doors open. One of them is Uproot, a Worces- ter-based cultivation and delivery com- pany. Uproot, which received $50,000 from the state in April, first applied for a license in 2019, but problems have piled up in the years since. ose issues included undisclosed structural issues at its planned facility, which forced the company to find another location, and $80,000 in rent payments while waiting eight months for necessary state inspec- tions of its new facility. "At times, it feels like you're drown- ing in red tape," Dave Aiello, co-owner of Uproot, told WBJ via email. "For instance, failing an inspection over something as minor as using the wrong type of lockbox for your keys can delay things for months, all while you're paying rent with no revenue. Meanwhile, our investors – friends and family – are le wondering why the business isn't up and running yet. It can be incredibly demoralizing." e challenges of being in the cannabis industry don't dissipate aer receiving permission from the state, said Mauriello. "I know other people that are going through the application process and I tell them, 'Even though this is really stressful, just wait,' because once you commence operations, it's like a whole other thing," she said. "It feels like just getting to that point, you want to pop champagne, and you're like, 'No, no, no.'" 'Hanging on by a thread' e $2.3 million in April funding was given to businesses with immedi- ate needs to pay bills. Delivered Inc. received $30,000 of that money. "e immediate need grant was like a lifeboat we were fortunate enough to receive," said Seyde. "It felt like we were out in the middle of the ocean, hanging on by a thread. I can't emphasize enough how much of a meaningful impact the grant had for us." Grant recipients could use the funds to cover personal expenses, rent, util- ities, regulatory fees, debt service, and professional expense services related to outstanding bills, including legal and accounting fees. "It was a bit of a painful time," Seyde said of the grant application process, which he said involved about six months of waiting before receiving the funds. "It was a very concerning period, knowing that we had money that was guaranteed to come in, but we also had bills that were passed due and putting us into default." Business has been especially tough for delivery operators and couriers, two types of licenses specifically set aside for social equity applicants. Delivery companies are allowed to purchase and store their own products, while couriers make deliveries from retail storefronts they've signed contracts with, somewhat akin to UberEats or GrubHub's business model. On the recommendation of then-gov- ernor Charlie Baker, who felt rolling out home delivery at the same time as the first retail sales would be overly ambi- tious, the Cannabis Control Commis- sion voted 4-1 to delay the implemen- tation of delivery until aer the first adult-use dispensaries were open. e first legal adult-use delivery sale wouldn't happen until June 2021, two and a half years aer the first legal sale at a dispensary. By then, more than 140 recreational dispensaries were already operating in Massachusetts. Strict advertising regulations and so- cial media restrictions on cannabis-relat- ed content has led to an uphill battle for delivery operators looking to capture the business of customers who were already used to shopping at dispensaries. 'It's definitely very, very hard, and the delivery market is still growing," said Chris Fevry, CEO of Dris Corp., a Natick delivery company he co-founded with his wife Dharry Pauyo. "Getting the word out, that's kind of the best thing to do, right?" rough the end of June, delivery and courier operators had sold about $7.1 million worth of product in 2024, according to CCC data, compared to about $799.7 million in sales made by retail storefronts. $27M more to grant out While the initial money proved to be a lifeline for his delivery business, Seyde hopes lessons learned during the first round of funding can be applied to the next round. "I hate to focus on winners and losers, but for some of the people that got $50,000, I don't understand how there was any immediate need, given that there's other businesses that just said are operating already out there who do have needs." Seyde said. "On the bright side, for this next round of funding, they are making it into different tiers, and depending on where you are in the licensing process, will depend what tier you qualify for. at's gonna make it way more promising for us." Aiello expects Uproot to finally start deliveries in November and hopes the next round of funding comes with more clarity. "More transparency is critical," he said. "We need clear timelines, not just for us but for the people expecting pay- ments. If there was something we could show creditors that guaranteed funds were incoming, it would ease their concerns and prevent months of waiting based solely on our word." is nervy waiting game comes at a time where Massachusetts businesses are facing even more turbulent waters. Dispensaries and cultivation firms, both big and small, have shuttered in the state as the price of cannabis has fallen drastically since 2018. Multiple companies are facing lawsuits over unpaid bills. Margaret Quackenbush, director of communications for the state's Execu- tive Office of Economic Development, told WBJ the next, more comprehensive round of funding is expected to begin later this year, as the amount available in the fund has now ballooned to $27 million. Urgency is key, said Fevry, who sits on the state's Cannabis Social Equity Advisory Board. "It's important the rest of the money gets out as soon as possible, because while businesses got their first tranche of money, they're still not doing well, and they need support," Fevry said. Eddy Twal, Ruben Seyde, and Tut Liu are three of the co-founders of Delivered Inc. PHOTO | MATT WRIGHT W

• Cover