FOR IMMEDIATE RELEASE
November 7, 2023
Contact: Shanel Lindsay (shanel@masseon.com) or Kevin Gilnack (kevin@masseon.com, 860.918.6197)
As Legislators Consider Fiscal Year-end Supplemental Budget, Advocates Urge Action on Cannabis Equity Fund Fix
New Grant & Loan Program Remains Unfunded More Than One Year After Creation
BOSTON — With the Massachusetts House of Representatives poised to take up Gov. Maura Healey’s FY23 fiscal year-end supplemental budget tomorrow, advocates are urging legislators to move the Commonwealth’s new cannabis social equity fund forward more than a year after its creation.
In addition to allocating more than $2.1 billion in state spending on programs including the state’s emergency shelter program, Gov. Healey’s bill would “correct the transfer mechanism for the Cannabis Social Equity Trust Fund,” clearing the way to finally deposit 15% of the previous year’s cannabis tax revenue into the new fund by January 1 annually, and enable the Executive Office of Economic Development (EOED) to begin distributing grants and no- and low-interest loans to entrepreneurs from communities harmed by the war on drugs once regulations and the application process are finalized by EOED.
While advocates praise Gov. Healey and legislative leaders for their continued efforts to deliver on Question 4’s promise of equitable economic opportunity in the cannabis industry, they urged them to go further.
Equitable Opportunities Now, a nonprofit that has fought for equitable cannabis policies since the passage of Question 4 — including Chapter 180 of the Acts of 2022, which created the new fund last year — is asking legislators to make an immediate one-time $50 million investment in the fund before the end of the year in addition to passing Gov. Healey’s proposed long-term fix.
“Entrepreneurs have been waiting for too long as market conditions have only grown more challenging; they can’t afford – and shouldn’t have – to wait until Jan. 1 as proposed in the Governor’s bill. We urge you to deliver on the promise of Ch. 180 now by appropriating a one-time emergency transfer of $50 million to the Cannabis Social Equity Trust Fund for the dual purposes of making funds available as soon as possible and beginning to compensate for the persistent delays in distributing these funds detailed below,” wrote Equitable Opportunities Now in their letter to legislative leaders.
Voters approved Question 4 legalizing cannabis sales seven years ago and advocates note that conditions have only become more challenging for smaller, local entrepreneurs, especially those from over-policed communities, to enter a market dominated by well-financed operators that have capitalized on systemic advantages that the new cannabis law is still working to undo.
NOTE: For additional background, please see the full letter below and read more on masseon.com.
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Equitable Opportunities Now (EON)’s mission is to ensure equitable ownership and employment opportunities for Black and Brown communities who have been targeted by the War on Drugs. We are seeking general support funding for our constituent-led statewide legislative and regulatory advocacy campaigns to create equitable economic opportunities in MA’s cannabis industry. Learn more at www.masseon.com
———- Forwarded message ———
From: Kevin Gilnack
Date: Tue, Nov 7, 2023 at 4:17 PM
Subject: Please fully fund Cannabis Social Equity Fund in supplemental budget billDear Senate President Spilka, Speaker Mariano, Ways & Means Chairs Rodrigues and Michlewitz, and Cannabis Policy Chairs Gomez and Donahue,
Thank you again for your commitment to advancing equitable economic opportunity in the Commonwealth, and particularly for your leadership in passing An Act Relative to Equity in the Cannabis Industry (Ch. 180).
Restorative justice has been a central component of the Commonwealth’s cannabis policy since the drafting of Question 4, and we deeply appreciate that you and your colleagues have helped Massachusetts maintain its status as a leader in equitable cannabis policy innovation in the seven years since voters legalized cannabis.
In furtherance of your dedication to creating a more equitable cannabis industry, we urge you to retain and strengthen Section 15 of H. 4090, Governor Maura Healey’s technical correction to the Cannabis Social Equity Trust Fund.
We applaud Gov. Healey, Speaker Mariano, Senate President Spilka, and Ways & Means Chairs Rep. Michlewitz and Sen. Rodrigues for working to address the protracted technical challenges and other delays that have left this critical fund unseeded seven years after passage of Question 4 and 14 months after the effective date of Ch. 180 and urge you to include language that moves this fund forward in your fiscal year closeout supplemental budget.
While Gov. Healey’s proposal provides an elegant solution to ensuring budget makers and administrators can accurately calculate, transfer, and disperse these revenues moving forward, it does not go far enough in addressing the urgent needs of entrepreneurs from communities harmed by the war on drugs.
Entrepreneurs have been waiting for too long as market conditions have only grown more challenging; they can’t afford – and shouldn’t have to – to wait until Jan. 1 as proposed in the Governor’s bill. We urge you to deliver on the promise of Ch. 180 now by appropriating a one-time emergency transfer of $50 million to the Cannabis Social Equity Trust Fund for the dual purposes of making funds available as soon as possible and beginning to compensate for the persistent delays in distributing these funds detailed below.
Furthermore, we urge you to continue your leadership as a national model for equitable policy development by increasing your investment in the equity fund by taking up Sen. Miranda’s bills S. 55 and S. 56.
Unfortunately — and despite the Legislature’s and CCC’s focus on equity — the entrepreneurs and communities that Question 4 was supposed to lift up have been left behind for the last seven years as well-financed medical dispensaries and multistate operators have dominated the market.
We appreciate the Legislature codifying into Chapter 55 of the Acts of 2017 that excess cannabis revenue should go to “programming for restorative justice, jail diversion, workforce development, industry specific technical assistance, and mentoring services for economically-disadvantaged persons in communities disproportionately impacted by high rates of arrest and incarceration for marijuana offenses” as one of five spending priorities. But despite this progress, few funds were appropriated to these programs in the intervening years.
We further appreciate that the Legislature mandated in Chapter 1800 of the Acts 2022 that “15 per cent of the fund shall be transferred to the Cannabis Social Equity Trust Fund,” the new grant and loan fund created by the law and administered by the Executive Office of Economic Development to provide grants and no/low-interest loans to entrepreneurs from communities harmed by the war on drugs.
Despite this legislative progress between 2017 and 2022, technical issues persist, leaving the most disadvantaged communities this law intended to support even further behind. According to EOED’s Cannabis Social Equity Trust Fund FY23 Annual Report:
Section 17 of Chapter 2 of the Acts of 2023, as signed on March 29, 2023, amended the Authorizing Statute to state that “[e]xpenditures from the [Cannabis Social Equity Trust Fund] shall not be subject to appropriation.” Prior to this amendment, the Trust Fund was unable to receive or expend funds. A first transfer of funds into the Trust Fund will occur later this year after the approval of a closeout supplemental budget for FY2023.
As entrepreneurs, advocates, and legislators have worked diligently to move equitable cannabis policies forward over the last seven years, systemic challenges have set these efforts further back. While Ch. 180 is beginning to address some systemic challenges like HCAs that favor larger operators thanks to your leadership, it is important to understand the challenges we seek to address.
Ch. 55 of the Acts of 2017 prioritized both Economic Empowerment applicants from communities harmed by the war on drugs and existing medical operators. While that policy was well-intentioned to prioritize both equity and efficiency, it effectively drove capital, real estate, and municipalities toward the already profitable, well-financed, established operators. The first-mover advantage enjoyed by medical operators was only further compounded by inequitable HCAs and municipal licensing processes that are only starting to be rolled back today.
Given how saturated the market has already become with general applicants and how far behind the Commonwealth is in our lofty and important goals for an equitable industry, we hope you will act with urgency to move the Cannabis Social Equity Trust Fund forward and adequately seed it as soon as possible.
Thank you again,
Kevin Gilnack, Policy Co-Chair, Equitable Opportunities Now
Armani White, Policy Co-Chair, Equitable Opportunities Now
Shanel Lindsay, Co-Founder, Equitable Opportunities Now
cc: Joint Committee on Ways & Means
Joint Committee on Cannabis Policy
Cannabis Social Equity Advisory Board