Massachusetts’ new cannabis equity law is drawing praise from advocates who say it will help ease barriers to entry for aspiring cannabis business owners from marginalized communities and promote more equity in the state’s multi-billion dollar industry.
The law, signed by Governor Charlie Baker this week, has several key components. It will establish an equity trust fund to be funded with a 15% slice of recreational marijuana tax revenue, limit cities and towns from paying exorbitant fees to marijuana businesses within their borders, and pave the way for social consumption sites by authorizing cities and towns become asking voters if they want them on ballot questions.
The new law will also encourage cities and towns to approve marijuana businesses run by people from disenfranchised communities, making it easier to expunge people’s records for possession and distribution charges that once carried criminal penalties, and as Axios reportedly changing the state tax code to allow marijuana business owners to enjoy some of the same tax benefits as other businesses.
Business owners have pointed to financing as one of the biggest hurdles in the growing industry. It is expensive and virtually excludes those without capital or investors with a high risk tolerance. That’s where the trust fund could help.
“Without banks, there’s no way for a small business like ours to open its doors without going to investors,” said Armani White, a Roxbury activist and marijuana business owner who wants to break ground on a Hyde Park retail establishment soon. “This allows us to not rely on that as much and allows us to be in a better financial position.”
Advocates have been working to formalize many of the provisions of the law and add voices to their cause for years. White works with the non-profit coalition Equitable Opportunities Now (the organization’s acronym, EON, is a tribute to her years of advocacy). In 2020, EON was successful in getting two of the state’s then cannabis commissioners to publicly advocate for the creation of a loan fund to help potential business owners.
Shanel Lindsay, founder and CEO of local biotech and medical cannabis device company Ardent, said she combined her own income with her mother’s retirement nest egg to start her business.
“How many good ideas don’t happen because there’s just not the regular space and support, the other people starting businesses,” Lindsay said of the typical funding struggle. “Cannabis is taxed at a very high rate here. The least we can do is take some of that money and put it back into the communities that are hurting the most and make sure this isn’t just a false promise of equity is.
Looking ahead, Lindsay said transparency in implementing the new law, especially when it comes to handing out the funds, would be crucial.
Baker has vetoed a provision of the mass bill – a potential study of pediatric medical marijuana users who consume at school.
