Massachusetts’ new cannabis equity law is drawing praise from advocates who say it will help ease barriers to entry for aspiring cannabis businesses owners from marginalized communities and foster more equity within the state’s multi-billion dollar industry.
The law, signed by Governor Charlie Baker this week, has a few key components. It will set up an equity trust fund to be financed with a 15% slice of recreational marijuana tax revenues, limit cities and towns from charging exorbitant fees to marijuana businesses within their borders, and make a path for social consumption sites by authorizing cities and towns to ask voters whether they want them via ballot questions.
The new law will also incentivize cities and towns to approve marijuana businesses run by people from disenfranchised communities, make it easier for people to expunge their records for possession and distribution charges that once carried criminal penalties, and as Axios reports,alter the state tax code to allow marijuana business owners to enjoy some of the same tax write off benefits as other businesses.
Business owners pointed to financing as one of the greatest hurdles in the burgeoning industry. It’s expensive and virtually shuts out those without the capital or investors with a high tolerance for risk. That’s where the trust fund could help.
“Without banking, there’s no way for a small business like ours to get their doors open without going to investors,” said Armani White, a Roxbury activist and marijuana business owner looking to break ground on a Hyde Park retail establishment soon. “This will allow 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 law’s provisions and adding 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 their years of advocacy). In 2020, EON was successful in getting two of the state’s then-cannabiscommissioners to publicly advocate for the creation of a loan fund for assisting would-be business owners.
Shanel Lindsay, founder and CEO of the local biotech and medical cannabis device company Ardent, said she combined her own earnings with her mother’s retirement nest egg in order to start her business.
“How many good ideas aren’t happening because there just isn’t the regular space and support that other people starting businesses get,” said Lindsay of the typical funding struggle. “Cannabis is taxed at a very high rate here. The least we could be doing is taking some of that money and putting it back into the communities most harmed and making sure this isn’t just a false promise of equity.”
Looking forward, Lindsay said transparency in implementing the new law, particularly when it comes to handing out the funds, would be crucial.
Baker vetoed one provision of the Mass. bill – a potential study of pediatric medical marijuana users consuming at school.