Both houses of the Massachusetts Legislature have now passed bills to amend the state’s marijuana law to help diversify the local industry, pave the way for so-called cannabis cafes and address other issues that advocates and regulators say have created roadblocks. and concerns in the burgeoning $3 billion industry.
House lawmakers on Wednesday endorsed a proposal aimed at funneling cash raised through the state marijuana tax into industry funding opportunities for residents of communities disproportionately hurt by the War on Drugs, the House News Service reports.
The state has seen relatively few businesses launch with connections to the Cannabis Control Commission’s social equity program or economic empowerment entrepreneurs.
Only 20 of the 346 companies, less than 6 percent, have emerged from those initiatives in some way, according to the News service.
“Since the passage of legal recreational cannabis, the creation and growth of the legal industry in the state has been, in most cases, a success, leading to hundreds of new businesses, thousands of new jobs, jobs and creating new sources of revenue for the Commonwealth and its municipalities through this innovative new industry,” said Worcester State Rep. Dan Donahue, Chairman of the House Cannabis Policy Committee. .
“However, it is time to review the initial legislation to provide clarity on the intent of (the) legislation and to work to ensure that we continue to remove barriers to entry into this unique industry for those communities that are so disproportionately harmed and impacted by the marijuana prohibition,” Donahue added.
State lawmakers are also considering how to allow cities and towns to allow marijuana establishments where patrons can consume cannabis products on the premises and how to improve oversight of host community agreements.
The agreements, deals made between potential companies and municipalities that are necessary to ensure the former can operate legally, have raised concerns about the power that local officials vest as gatekeepers to the still relatively new industry.
In September, for example, former Fall River Mayor Jasiel Correia was convicted of extorting hundreds of thousands of dollars from marijuana entrepreneurs seeking to open stores in the city in exchange for host community deals.
Here’s what you should know about the two bills as House and Senate officials craft a final version:
This is what the Senate bill proposes
Last month, the state Senate passed its own marijuana industry reform bill, which its supporters say addresses some of the biggest and most outstanding problems that remain five years after the state’s legal market became law.
Senators have framed “An Act Relating to Equity in the Cannabis Industry” as a vehicle for both economic development and racial justice, according to the News service.
The bill received unanimous support after earning a stamp of approval from the Cannabis Policy Committee.
Senator Sonia Chang-Díaz, chair of the Senate committee and current gubernatorial candidate, said the proposal seeks to correct “longstanding problems with solutions identified long ago,” the News service informed.
“If you talk to advocates, to policy experts, to the Cannabis Control Commission, you will find almost universal agreement,” said Chang-Díaz. “They will tell you… that the costs of entry into the industry are too high and that there is a serious lack of access to capital in this industry. Typically, $1 to $1.5 million in liquidity is required to open a new cannabis retail store or $3 to $5 million for a manufacturing plant.
“It’s no surprise that despite our best intentions, the industry has remained predominantly white and predominantly in already wealthy hands,” he added.
The Senate bill seeks to rectify that by creating grants and loans, including interest-free and forgivable loans, for participants in the CCC’s social equity program and for economic empowerment priority applicants.
The cash would flow through the Cannabis Social Equity Trust Fund, which would get 10 percent of the money in the Marijuana Regulation Fund, the state account that collects the marijuana excise tax and other fees.
Under that system, the trust fund would have received about $11.24 million in fiscal 2021 alone, according to the News service. Lawmakers have estimated that the account could see an inflow of between $15 million and $18 million in fiscal year 2023.
Additionally, the bill would give cities and towns the ability to choose to allow marijuana cafes in their municipalities by local ordinance. Cities and towns could also use the local referendum option already available to approve or reject such an establishment’s right to open within their borders.
“By allowing this to go through the local political process, this decision making to go through the local political process just like all other City ordinances, will save the City resources needed to run a ballot question and avoid delays resulting from have to wait months. or years into the next election cycle in some cases, while maintaining accountability to voters,” Chang-Díaz said.
The proposal would also direct the CCC to review and approve host community agreements and to “regulate and enforce” their terms, according to the News service.
As for what those terms are, the bill also defines more clearly what local officials can ask prospective businesses to do under those agreements, and requires the CCC to develop a model agreement that municipalities can use as a template. . Towns and cities may also waive the requirement for host community agreements under the bill.
“By clarifying the requirements of host community agreements, making financial investments to increase social equity, and enabling the full implementation of the cannabis industry through the authorization of social consumption, I am confident that this legislation will help the continued growth of a market competitive and fair. commercial marijuana industry here in the Commonwealth of Massachusetts,” Senate Ways and Means Committee Chairman Michael Rodrigues said last month.
This is what the House bill proposes
House lawmakers nearly unanimously passed their own bill focused on similar challenges in the industry on Wednesday.
The landslide proposal passed in a 153-2 vote, with Rep. Jeff Turco, a Winthrop Democrat, and Rep. Marc Lombardo, a Billerica Republican, voting against, according to the News service.
House Speaker Ron Mariano praised the bill as an effort “to promote an equitable cannabis industry” in Massachusetts.
“This bill provides capital to minority-owned marijuana businesses to ensure that those disproportionately harmed by marijuana prohibition are able to participate in this new industry,” Mariano said in a statement. aware On twitter. “It also streamlines the expungement process for those seeking to expunge records for crimes that have been decriminalized, clarifies the process for approving social drinking sites, and allows cannabis businesses the same tax advantages as other businesses.”
In particular, the House bill seeks to throw 20 percent of the money collected annually through marijuana taxes and fees into what would be the new Social Equity Trust Fund, according to the News service. The fund would provide grants and loans to entrepreneurs in demographics disproportionately affected by drug prohibition laws.
In essence, the model is similar to the Senate proposal, but the House version would channel more cash to foster diversity in the industry.
In fiscal year 2021, for example, the trust fund would have received about $22.3 million under the bill, the News service reports.
“Business owners will tell you they need about $1 million to realistically break ground to get into this industry,” said Boston State Rep. Chynah Tyler, who introduced the amendment to increase the amount to 20 percent. “So if we really want to bring social equity to this industry, if we really want to do what we say by putting our money where our mouth is, we have to invest real dollars.”
Like the Senate bill, the House bill spells out what can be included in a host community agreement, gives the CCC the scope to review and approve those agreements, and enacts the right to cities and towns to waive the requirements for such agreements.
Under the House bill, cities and towns can also hold a referendum to determine whether to allow marijuana cafes to operate or through a vote of a public body, the News service reports.
“Establishing social consumption sites is important because many residents don’t have a place where they can legally consume cannabis products,” Donahue said. “This issue disproportionately affects renters, especially those in public housing and medical patients. Also, social consumption businesses tend to have lower start-up costs than other types of licenses.”
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