The Massachusetts Cannabis Commission Has Changes in Store for Black Owned Cannabis Companies

By BCB Staff Writer | July 3, 2020

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The Massachusetts Cannabis Control Commission is at it again. The Massachusetts Social Equity Fund is no secret, and the process set guidelines for the rest of the country to follow, but it’s not been without flaws.

Most minorities are having issues finding space in these “economic empowerment” cities.

On paper, the Social Equity Fund appears to be a successful way to infuse the cannabis industry with minority representation. In actuality, that plan hasn’t exactly come to fruition. Although the fund does lessen barriers to entry, not every person filling out the licensing packet has enough monetary backing to be successful out of the gate. Between the time it takes to secure proper certification and licensing, nail down a brick and mortar location, and equip the business with enough supplies and technology to get it off the ground, the costs to enter the industry, even with assistance, are hefty. Most minorities are having issues finding space in these “economic empowerment” cities.

Host community agreements, communication between Massachusetts towns, and marijuana-related businesses (MRBs) have risen in price as property value has increased. With no regulations on property taxes, the cannabusinesses have been at the mercy of each city’s policy. With the re-introduction of a recent bill in the Massachusetts legislature, the Cannabis Control Commission would be granted express authority to review and regulate the agreements and payments made between cities and cannabusinesses. Effectively operating as a middleman, the CCC would regulate every aspect of the interaction; the passing of “S 1126” and “H 3536” would reclassify the CCC’s ability to intervene in local cannabusinesses.

The following amendments allow for stricter agreement guidelines.

S 1126 amended S 2479, which stated that “a marijuana establishment or a medical marijuana treatment center seeking to operate or continue to operate in a municipality which permits such operation shall execute an agreement with the host community setting forth the conditions to have a marijuana establishment or medical marijuana treatment center located within the host community which shall include, but not be limited to, all stipulations of responsibilities between the host community and the marijuana establishment or a medical marijuana treatment center.”

H 3536 amended H 4327, which set in place that “An agreement between a marijuana establishment or a medical marijuana treatment center and a host community may include a community impact fee for the host community; provided, however, that the community impact fee shall be reasonably related to the costs imposed upon the municipality by the operation of the marijuana establishment or medical marijuana treatment center and shall not amount to more than 3 percent of the gross sales of the marijuana establishment or medical marijuana treatment center or be effective for longer than 5 years.”

These amendments allow for stricter agreement guidelines. These include the municipality’s ability to waive the requirement to have an HCA, not allowing an HCA to require financial requirements beyond the three percent max gross sales fee, known colloquially as a “Pay to Play” cost, and clarifying that the five-year term begins the day the company opens for consumers. This comes after the HCA process was called out by local cannabusiness owners for being expensive and unfair in November 2019.

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