Letter from Equitable Opportunities Now, ACLU, Black Economic Council of Massachusetts, Boston Impact Initiative, Foundation for Business Equity, The Boston Foundation, Union Capital Boston & other advocates cites urgent need to support local entrepreneurs and reform local licensing
FOR IMMEDIATE RELEASE
June 28, 2022
CONTACT: Shanel Lindsay
BOSTON – Following the appointment of an all-white conference committee to negotiate differences between House and Senate cannabis reform bills, more than 20 community leaders signed on to a letter urging legislators to fully fund social equity programs and include key equity provisions from each bill.
“It is deeply troubling that none of the legislators of color in either chamber who championed these issues will be at the table to decide how accessible this new industry will be to local entrepreneurs of color and from communities most harmed by the war on drugs,” said Equitable Opportunities Now Co-Founder and Question 4 Co-Author Shanel Lindsay. “Now, the spotlight is on Senate President Karen Spilka, House Speaker Ron Mariano and conferees to deliver a bill that reflects their stated commitment to equity.”
With less than five weeks of formal legislative sessions remaining, advocates stressed the need for the conference committee to finish its work and report out a final bill by July 10 to ensure legislators have time to address any line-item vetoes or amendments from the Governor.
“Despite Question 4’s intent to foster equitable participation in the Massachusetts cannabis market, for the last six years, well-financed operators from out of state have dominated the industry,” said Black Economic Council of Massachusetts Policy and Advocacy Lead Darien Johnson. “We join our community partners in urging the Conference Committee to get this bill done on time and to get it done right – Black and Brown entrepreneurs cannot afford to wait for another two year session.”
Massachusetts cannabis legalization statute calls for excess cannabis revenue to go to five priorities, including “programming for restorative justice.” While the House allocated the full 20% of excess cannabis revenue to such programs, the Senate bill only allocates half that amount.
“The legislature recognized the need to promote equity in the development of our Commonwealth’s cannabis industry, and failure to follow through on that commitment would have lasting harm,” said The Boston Foundation Vice President of Communications & Public Affairs Keith A. Mahoney, Esq. “We ask the conferees to equitably fund programs for restorative justice and meet the twenty-percent minimum proposed by the House.”
In addition to establishing a Cannabis Social Equity Trust Fund, the cannabis reform bills make important changes that improve equity at the local licensing program, enables social consumption licensing, and improves access to expungement.
“When the ACLU helped write Question 4, our intent was to foster equity in the licensing process – not just at the state level, but at every level – and we hope the Conference Committee will strengthen local equity provisions and incentives,” said ACLU of Massachusetts Deputy Legislative Director Mike Ryan. “It is vital that the Cannabis Control Commission and applicants have all the tools they need to ensure these agreements are fair moving forward.”
The full letter can be found attached and in the message below. The letter’s recommendations include:
- Fully and fairly fund the Cannabis Social Equity Trust Fund by adopting House language directing 20% of excess cannabis revenue
- Empower disproportionately harmed community members to determine how cannabis revenue is reinvested in their community by adopting Senate language that grants Trust’s board authority to promulgate regulations and empowers the Secretary of Housing and Economic Development to approve and implement those regulations
- Ensure municipalities have a consistent standard for promoting equity in local licensing by empowering the CCC & supporting accountability
- Bolster the financial incentive to municipalities that host social equity businesses by increasing the additional 1% of revenue offered to communities that host equity businesses to 3%
- Adopt Senate language empowering the CCC to establish rules and promulgate regulations for host communities.
- Adopt House language that would withhold community impact fees from communities that fail to adopt equity policies
- Improve accountability and fairness in community impact fee dispute resolution by adopting provisions from House and Senate bills
- Adopt Senate language requiring the CCC to “develop a model host community agreement
- Adopt Senate language affirming licensees’ right to pursue a civil action regarding unreasonable community impact fees and House language enabling licensees to petition the CCC to review the community impact costs
- Adopt House language empowering CCC to review past HCAs
- Strengthen host community agreement reform with reasonable limits and deadlines by adopting House language limiting host community agreements to five years and requiring the Cannabis Control Commission to review host community agreements within 45 days
- Ensure cannabis businesses continue to make a substantial investment in diversity and positive community impact by strengthening the Senate’s language regarding donations to the Trust Fund to include a minimum standard and progressive sliding scale to ensure large operators invest their fair share back into the community.
- Provide clarity on the role of the CCC’s Social Equity Program and the Cannabis Social Equity Trust Fund by amending House language to reflect that the Program should provide training and technical assistance to help applicants navigate the Fund’s application process.
Letter signers include:
- Shanel Lindsay, Equitable Opportunities Now, Ardent, LLC, and Question 4 Ballot Question Team
- Betty Francisco, Boston Impact Initiative
- Darien Johnson, Black Economic Council of Massachusetts
- Eric Leslie, Union Capital Boston
- Glynn Lloyd, Foundation for Business Equity
- Keith A. Mahoney, Esq., The Boston Foundation
- Mike Ryan, American Civil Liberties Union of Massachusetts
- Devin Alexander, Rolling Releaf (Social Equity Licensee)
- Medford City Council Vice President Zac Bears
- Cara Crabb-Burnham, CCB Consulting LLC
- Kobie Evans, Pure Oasis
- Kevin Gilnack, Equitable Opportunities Now, KG Consulting, LLC, Question 4 Ballot Question Team
- Donna Haghighat, The Women’s Fund of Western MA
- Kevin Hart, Pure Oasis
- Geneise Israel, Oasis of Tranquility
- Kizzy Key, Social equity participant
- Dr. Marion McNabb, Cannabis Center of Excellence
- Keniesha Mendes, social equity participant
- Kimberly Napoli, Esq., Vicente Sederberg, Yes on 4 Campaign, Cannabis Advisory Board
- Tom Nolan, Ed., Emmanuel College, Question 4 Ballot Question Team
- David Rabinovitz, CannaVentureLabs.com, former social equity trainer for Cannabis Control Commission
- Nairoby Sanchez, Mass CultivatED
- Eve Santana, Equitable Opportunities Now
- Grant Smith Ellis, Grassroots Advocate
- Armani White, Equitable Opportunities Now and Firehouse (Economic Empowerment Priority Applicant)
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Equitable Opportunities Now (EON) educates for and empowers people of color to become active participants in the Massachusetts legal cannabis market. 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. EON believes that in order to best address the lasting effects of prohibition, we must facilitate access. EON supports transition from the legacy to the legal market and forging a path of economic empowerment for people with past marijuana convictions and returning citizens.
———- Forwarded message ———
Date: Tue, Jun 28, 2022 at 3:24 PM
RE: Please dedicate 20% of cannabis revenue to equity programs and include key equity provisions in final cannabis reform bill
Dear Speaker Mariano, Senate President Spilka, and honorable members of the Cannabis Reform Conference Committee,
Thank you again for all of your work to advance equity in the cannabis industry. Below and attached you will find a letter from Equitable Opportunities Now, ACLU, Black Economic Council of Massachusetts, Boston Impact Initiative, Foundation for Business Equity, The Boston Foundation, Union Capital Boston & other advocates highlighting the urgent need to support local entrepreneurs and reform local licensing and detailing our recommendations on how the committee can best support equity as it reconciles both chambers’ bills.
Please do not hesitate to contact me with any questions you might have.
Thank you,
Shanel Lindsay
Co-Founder
Equitable Opportunities Now
—
June 28, 2022
RE: Please dedicate 20% of cannabis revenue to equity programs and include key equity provisions in final cannabis reform bill
Dear Senate President Spilka, Speaker Mariano and honorable Conference Committee members,
Thank you so much for your dedication to advancing equity in the cannabis industry. We are grateful that through your leadership and support, both chambers have passed omnibus bills to address access to capital, and host community agreements, and to make other important changes.
For nearly six years, well-financed operators from out of state have dominated the industry as legislators and advocates have worked to advance policies to foster equitable participation. Please work quickly to get this bill done on time and to get it done right because Black and Brown entrepreneurs cannot afford to wait for another two year session.
There are many aspects of both chambers’ bills that will help create a more equitable cannabis industry, which we have detailed below. For your convenience, here is a summary of our recommendations:
- Fully and fairly fund the Cannabis Social Equity Trust Fund by adopting House language directing 20% of excess cannabis revenue
- Empower disproportionately harmed community members to determine how cannabis revenue is reinvested in their community by adopting Senate language that grants Trust’s board authority to promulgate regulations and empowers the Secretary of Housing and Economic Development to approve and implement those regulations
- Ensure municipalities have a consistent standard for promoting equity in local licensing by empowering the CCC & supporting accountability
- Bolster the financial incentive to municipalities that host social equity businesses by increasing the additional 1% of revenue offered to communities that host equity businesses to 3%
- Adopt Senate language empowering the CCC to establish rules and promulgate regulations for host communities.
- Adopt House language that would withhold community impact fees from communities that fail to adopt equity policies
- Improve accountability and fairness in community impact fee dispute resolution by adopting provisions from House and Senate bills
- Adopt Senate language requiring the CCC to “develop a model host community agreement
- Adopt Senate language affirming licensees’ right to pursue a civil action regarding unreasonable community impact fees and House language enabling licensees to petition the CCC to review the community impact costs
- Adopt House language empowering CCC to review past HCAs
- Strengthen host community agreement reform with reasonable limits and deadlines by adopting House language limiting host community agreements to five years and requiring the Cannabis Control Commission to review host community agreements within 45 days
- Ensure cannabis businesses continue to make a substantial investment in diversity and positive community impact by strengthening the Senate’s language regarding donations to the Trust Fund to include a minimum standard and progressive sliding scale to ensure large operators invest their fair share back into the community.
- Provide clarity on the role of the CCC’s Social Equity Program and the Cannabis Social Equity Trust Fund by amending House language to reflect that the Program should provide training and technical assistance to help applicants navigate the Fund’s application process.
Thank you again for your consideration of this feedback and work to finalize this landmark equity legislation.
Equitably fund the Cannabis Social Equity Trust Fund
We, the undersigned community and business leaders, and advocates of equitable economic opportunity and cannabis reform, are writing to urge you to adopt the House language to fully and fairly fund the Cannabis Social Equity Trust Fund with 20% of excess cannabis revenues collected by the Commonwealth.
As you are likely aware, restorative justice is one of five key funding priorities in the Commonwealth’s cannabis law. After almost six years of market domination by well-financed, multi-state operators, it couldn’t be more urgent to equitably fund this program and empower entrepreneurs of color and from communities disproportionately harmed by the War on Drugs meaningful participation in this industry. To date, over $600 million in tax revenue has been collected by the Commonwealth yet only $10 million of those dollars have gone to adversely impacted communities. Directing 20% of the yearly adult use excise tax towards the Cannabis Social Equity Trust Fund will quickly correct that inequitable gap.
Given the compounding effects of decades of criminalization and over-policing of Black and Brown communities, we urge the Legislature to allocate the full 20% of excess cannabis revenue toward these priorities as a floor. As time passes and the need for cannabis legalization-related “public safety” and “municipal police training” spending wanes, we hope the Legislature will divert a higher percent of this revenue to reinvest in the communities that need them most.
Empower disproportionately harmed community members to determine how cannabis revenue is reinvested in their community
Thank you to both chambers for creating a board to oversee the Cannabis Social Equity Trust fund, as such an entity will provide vital insights in creating the rules, policies, procedures, guidance, criteria, and other aspects needed to ensure the success of this program.
We strongly urge the Conference Committee to ensure that the communities that have been most impacted and marginalized by marijuana prohibition and enforcement are the ones who will have the final say in how these funds are spent to ensure, as required in the text of both the house and senate versions of the legislation, that the “money in the fund shall be used to make grants and loans, including no-interest loans and forgivable loans, to social equity program participants and economic empowerment priority applicants.” Please adopt the Senate language that grants the board authority to promulgate regulations to the board and empowers the Secretary of Housing and Economic Development to approve and implement those regulations.
We also recognize that the Conference Committee will consider whether to adopt House language that would limit appointing authority over the board to the Governor, Treasurer, and Attorney General, or Senate language that would grant an appointment each to the Secretary of the Commonwealth and Auditor, in addition to the aforementioned. In the absence of a compelling opportunity to better and more holistically engage those constitutional offices in advancing equity in the cannabis industry, we believe the Governor, Attorney General, and Treasurer have proved thoughtful and committed allies in the implementation of Question 4 and have the internal expertise to select consensus appointments.
Ensure municipalities have a consistent standard for promoting equity in local licensing by empowering the CCC & supporting accountability
Restorative justice was a central tenet of Question 4 and the law intended to promote equitable participation in the industry throughout the licensing process – both at the CCC and in host communities. We are grateful to both chambers for including provisions in their bills that would ensure Massachusetts cities and towns to “promote and encourage full participation in the regulated marijuana industry by people from communities that have previously been disproportionately harmed by prohibition and enforcement.”
We are especially grateful that both chambers included a financial incentive to municipalities that host social equity businesses and we hope you will help bolster that effort by increasing the additional 1% of revenue offered to communities that host equity businesses to 3% to further help these businesses compete against the outsized influence of well-funded and well-connected applicants.
Given the widely reported inappropriate host community agreements adopted by cities and towns across the Commonwealth – despite clear standards from the CCC and the law – it is essential that we empower the CCC to ensure local equity provisions meet a fair and consistent standard across Massachusetts In order to ensure that all host communities understand and comply with the minimum acceptable standards that the CCC is charged with setting, we urge the Conference Committee to adopt the Senate’s language empowering the CCC to establish rules and promulgate regulations for host communities.
We further urge the Conference Committee to adopt language in the House bill that would withhold community impact fees from communities that fail to adopt equity policies. This provision creates a vital accountability mechanism to ensure the Legislature’s intent to support local equity policies is implemented.
Improve accountability and fairness in community impact fee dispute resolution by adopting provisions from House and Senate bills
Thank you for clarifying by law that the CCC “shall review and approve each host community agreement” as part of the application process in both of your bills, and for separately offering mechanisms by which licensees may seek relief for unreasonable community impact fees. To support the Commonwealth’s cities and towns in their efforts to ensure their HCAs are compliant, we strongly encourage the Conference Committee to adopt the Senate’s language requiring the CCC to “develop a model host community agreement to serve as guidance” for municipalities.
We applaud the Senate for affirming the right of cannabis businesses to bring a breach of contract action against the host community and recover damages, attorneys’ fees, and unreasonable community impact fee costs. These provisions help relieve the time and expense licensees will face in seeking justice and should be preserved in the final bill, but as a secondary alternative to administrative relief.
In addition to the Senate language affirming licensees’ right to pursue a civil action regarding unreasonable community impact fees, we urge the Conference Committee to include the House language enabling licensees to petition the CCC to review the community impact costs documented by a host community and determine if they are in compliance and determine the reasonableness of past payments. This authority is a natural extension of the CCC’s mandate to review and enforce the acceptability of host community agreements both during the application process and through operation and renewals. We further urge you to ensure the Commission has the resources it needs to complete these reviews and to provide as much detail as possible as to what terms and conditions are permissible for HCAs, including duration.
Given the widely reported flagrant disregard of your mandate that “No agreement between a city or town and a marijuana establishment shall require payment of a fee to that city or town that is not directly proportional and reasonably related,” it is essential that the CCC be able to review agreements retroactively as provided in the House bill.
Strengthen host community agreement reform with reasonable limits and deadlines
We appreciate that both chambers have proposed setting reasonable time limits on host community agreements between and urge you to adopt the House language limiting host community agreements to five years and requiring the Cannabis Control Commission to review host community agreements within 45 days, and ensure the Commission has the resources needed to meet related staffing needs.
As you’ve likely seen in your own districts, the operation of marijuana establishments creates little to no costs to host communities compared to any other business, particularly once the licensing and opening process have been completed and they have been a part of the community after several years of operation. As this industry plants roots in the Commonwealth and creates jobs, opportunities, and revenue to state and local governments for decades to come, it is simply unreasonable to expect cannabis establishments to pay community impact fees in perpetuity, simply because they are cannabis businesses.
By capping community impact fees to five years, the Legislature will create an incentive for cities and towns to select the applicant they believe will be the best long-term partner to their community – rather than simply picking the highest bidder. This is an essential element for leveling the playing field for local small businesses struggling to compete against large multistate operators. While the Senate’s limit of five years per HCA is a positive step forward, there is no rational justification for community impact fees to extend beyond the fifth year and we hope you will adopt the five year limit on community impact fees included in the House bill.
Additionally, given the already lengthy and expensive application process that applicants face and the Cannabis Control Commission’s proven track record of meeting legislatively-mandated deadlines, we urge you to adopt the 45 day review period included in the House bill and ensure the agency has the resources it needs to meet this deadline.
Ensure cannabis businesses continue to make a substantial investment in diversity and positive community impact
As you are likely aware, the Legislature has mandated the CCC to “adopt procedures and policies to promote and encourage full participation” in the cannabis industry by people harmed by the War on Drugs, and to “provide meaningful participation of communities disproportionately affected by cannabis prohibition and enforcement, including Minority Business Enterprises, Women Business Enterprises, and Veteran Business Enterprises.”
In furtherance of those mandates, the CCC requires applicants to submit separate positive impact and diversity plans. Positive impact plans include programs that support past or present residents of geographic areas of disproportionate impact, Economic Empowerment applicants, Social Equity Program participants, residents with past drug convictions, and residents with family who have drug convictions. Diversity plans must “promote equity among minorities, women, veterans, people with disabilities, and people of all gender identities and sexual orientation.”
While we applaud the Senate for incentivizing cannabis businesses to donate to the Cannabis Social Equity Trust Fund, we strongly believe that substantive positive impact and diversity plans are essential elements of the application process. We are further concerned that requiring the CCC to “set criteria for allowing marijuana establishments… to satisfy their diversity plan or positive impact plan… by donating a percentage of their revenue” is overly vague.
As you are likely aware, the existing industry already wields outsized influence through their efforts to lobby the Legislature and the CCC, and to even use the courts to oppose policies that support equity businesses. The industry’s trade group representing the largest companies, the Commonwealth Dispensary Association, has even gone so far as to sue the CCC to prevent an equitable licensing scheme, although they eventually dropped it after massive public backlash.
Requiring the CCC to set criteria without setting a minimum standard will invite operators and lobbyists to seek to water down the minimum requirement as much as possible – potentially to the point they are donating less to the Trust than they currently invest in their positive impact plans or diverse recruitment efforts.
After all of the Legislature’s hard work to expand equitable participation in the cannabis industry, we urge the Conference Committee to strengthen the Senate’s language to include a minimum standard and progressive sliding scale to ensure large operators invest their fair share back into the community.
As you may be aware, CCC regulations include a Leadership Rating Program for Marijuana Establishments and Marijuana-related Businesses and include the following provision at 935 CMR 500.040:
(3) Leadership Rating Criteria.
(a) Social Justice Leader. In the year preceding the date of application for a leadership
rating, a Licensee satisfies at least two of the following:
1. Upon the Legislature’s establishment of a dedicated Social Equity or Technical Assistance Fund (Fund) or a similar fund, one percent of the Marijuana Establishment’s gross revenue is donated to the Fund;
2. The Licensee has conducted 50 hours of educational seminars targeted to residents of Areas of Disproportionate Impact in one or more of the following: Marijuana cultivation, Marijuana Product manufacturing, Marijuana retailing, or Marijuana business training.
3. The Licensee can demonstrate that a majority of employees have a conviction or continuance without a finding for an offense under M.G.L. c. 94C or an equivalent conviction in Other Jurisdictions;
Should the Conference Committee include language allowing cannabis businesses to satisfy a part, or all, of their positive impact plan or diversity plan, we urge you to add language similar to the standard already set by the CCC’s Social Justice Leader standard setting a minimum donation level of one percent of gross revenues.
To better support smaller businesses and ensure the largest and most profitable, who have outsized dominance in the market and disproportionately reduce opportunities for small, local, diverse entrepreneurs, we further strongly urge you to prescribe a minimum sliding scale based on annual gross revenue or to explicitly require the CCC to do so.
Clarify role of CCC’s Social Equity Program and the Cannabis Social Equity Trust Fund
We appreciate both chambers’ decision to explicitly codify the Commission’s mandate to administer a Social Equity Program to encourage full and equitable participation in the cannabis industry through technical assistance and training.
We further applaud the House for seeking to connect economic empowerment priority applicants to the Cannabis Social Equity Trust Fund through the Social Equity Program; however, we are concerned that language requiring the Program to “offer… access to funds available” is overly vague given the role of the Trust Fund’s Board and the Secretary of Housing and Economic Development’s role in distributing funds.
To better reflect the CCC’s role as a regulator and connecting applicants to technical assistance, and resolve any ambiguity, we urge the Conference Committee to clarify the House’s language to reflect that the CCC “shall administer a social equity program… [that] shall offer technical assistance and training, including but not limited to guidance on how to access funds available through the Cannabis Social Equity Trust Fund.”
Thank you again for your continued leadership on cannabis equity
Since voters approved Question 4, both chambers have prioritized hearing from those most impacted by these policies and you and your colleagues have worked diligently over the past several years to bring us where we are today.
This progress would not be possible without your support and that of Cannabis Committee Co-Chairs Sen. Sonia Chang-Diaz and Rep. Dan Donahue, Ways & Means Committee Co-Chairs Sen. Michael Rodrigues and Rep. Aaron Michlewitz and the many legislators who have put forward bills and amendments that have helped bring us to this point, including:
- Rep. Michelle Dubois
- Rep. Mindy Domb
- Rep. Danielle Gregoire
- Rep. Dan Hunt
- Rep. Liz Miranda
- Rep. Sarah Peake
- Rep. Dave Rogers
- Rep. Danillo Sena
- Rep. Chynah Tyler
- Sen. Sonia Chang-Diaz
- Sen. Nick Collins
- Sen. Julian Cyr
- Sen. Jamie Eldridge
- Sen. Cindy Friedman
- Sen. Adam Gomez
- Sen. Pat Jehlen
- Sen. Jason Lewis
- Sen. Rebecca Rausch
Thank you again for your ongoing commitment to cannabis equity. We hope you will adopt these key provisions to create the strongest bill possible and make Massachusetts a national leader in promoting equity in the cannabis industry.
If you have any questions, please contact Equitable Opportunities Now Co-Founder Shanel Lindsay at shanel@masseon.com.
Sincerely,
Shanel Lindsay, Equitable Opportunities Now, Ardent, LLC, and Question 4 Ballot Question Team
Betty Francisco, Boston Impact Initiative
Darien Johnson, Black Economic Council of Massachusetts
Eric Leslie, Union Capital Boston
Glynn Lloyd, Foundation for Business Equity
Keith A. Mahoney, Esq., The Boston Foundation
Mike Ryan, American Civil Liberties Union of Massachusetts
Devin Alexander, Rolling Releaf (Social Equity Licensee)
Medford City Council Vice President Zac Bears
Cara Crabb-Burnham, CCB Consulting LLC
Kobie Evans, Pure Oasis
Kevin Gilnack, Equitable Opportunities Now, KG Consulting, LLC, Question 4 Ballot Question Team
Donna Haghighat, The Women’s Fund of Western MA
Kevin Hart, Pure Oasis
Geneise Israel, Oasis of Tranquility
Kizzy Key, Social equity participant
Dr. Marion McNabb, Cannabis Center of Excellence
Keniesha Mendes, Social Equity participant
Gary Perry, Tiny Trap Concerts, Social Equity Participant
Kimberly Napoli, Esq., Vicente Sederberg, Yes on 4 Campaign, Cannabis Advisory Board
Tom Nolan, Ed., Emmanuel College, Question 4 Ballot Question Team
David Rabinovitz, CannaVentureLabs.com, former social equity trainer for Cannabis Control Commission
Nairoby Sanchez, Mass CultivatED
Eve Santana, Equitable Opportunities Now
Grant Smith Ellis, Grassroots Advocate
Armani White, Equitable Opportunities Now and Firehouse (Economic Empowerment Priority Applicant)
cc:
Chair Sonia Chang-Diaz and Honorable Members of the Joint Committee on Cannabis Policy
Chair Aaron Michlewitz and Honorable Members of the Joint Committee on Ways & Means