By Shira Schoenberg
The Republican, Springfield, Mass.
WWR Article Summary (tl;dr) The Cannabis Advisory Board, which makes non-binding recommendations to the Cannabis Control Commission, voted to recommend restricting home delivery licenses to equity applicants, co-ops, and microbusinesses for the first five years.
Springfield, Mass.
State marijuana regulators are counting on new home delivery companies to help bring social equity into the legal cannabis industry, by considering giving “equity” applicants and small businesses exclusive access to the initial licenses.
“By making delivery licenses exclusive to equity applicants for the first five years, the Cannabis Advisory Board hopes that will actually create more opportunities in the cannabis market for communities disproportionately affected by the drug war,” said Matt Allen, field director of the Massachusetts ACLU and a Cannabis Advisory Board member.
Massachusetts state law requires that state regulators make an effort to open up the marijuana industry to communities that were disproportionately affected by enforcement of marijuana laws.
But so far, small and minority business owners have struggled to break into the industry, which is dominated by large medical marijuana companies. This comes despite an economic empowerment program, which gave minorities, applicants from disproportionately affected communities and people with drug convictions priority in licensing.
The Cannabis Control Commission is just launching a social equity program, which will offer guidance and technical assistance to Massachusetts residents who live in a community disproportionately affected by drugs or who have had a drug conviction or have a spouse or parent with a drug conviction.
Two segments of the marijuana industry, still under development, could offer opportunities.
The Cannabis Control Commission is planning to write regulations by next summer to allow social consumption sites, like marijuana cafes, and home delivery of marijuana.
The Cannabis Advisory Board, which makes non-binding recommendations to the Cannabis Control Commission, last Thursday voted to recommend restricting home delivery licenses to equity applicants, co-ops, and microbusinesses for the first five years.
Equity applicants would be defined to include communities harmed by prohibition and those with prior marijuana convictions. Co-ops and microbusinesses are categories of small businesses owned by Massachusetts residents.
The board also recommended that the commission develop a program to promote employment of “equity” applicants in the delivery industry.
In its recommendations, the board noted that delivery companies require less money to open than full-scale growing facilities or shops, so they could provide greater opportunities for applicants who have less cash to start a business.
Michael Latulippe, a member of the Cannabis Advisory Board representing the Massachusetts Patient Advocacy Alliance, said getting into the industry now “feels hopeless” to a lot of smaller marijuana entrepreneurs, who struggle with a lack of financing, difficulties getting municipal approval, and the challenge of finding property.
“The idea that there would at least be this exclusivity for them would draw a lot more participation, because they would feel like they had a chance,” Latulippe said.
Home delivery is likely one of the easiest segments of the industry to get into, since a business owner does not need to pay for a brick and mortar store or an expensive grow facility. Latulippe said there is also the possibility that larger companies with an interest in getting their products delivered could help finance smaller delivery companies.
The current model, Latulippe said, simply is not working. He said many small businesses know they cannot compete with larger companies, and they worry about losing their investment if they try.
“At this point, we have had zero equity applicants or economic empowerment applicants (get licenses),” Latulippe said. “We’re at a point now where a carveout makes sense because we don’t quite know what the future is.”
Allen said research has shown that minority communities were the most affected by the war on drugs, but most legal marijuana dispensary owners are white. A major reason, he said, is that white people are statistically more likely to have access to the money needed to start a business.
Although licensing fees and barriers to entry are lower in the adult-use market than the medical market in Massachusetts, Allen said, “Now that we see how few equity applicants have gotten through the application process, it’s become clear that lowering those licensing fees alone is not enough to make the market accessible for people from communities disproportionately affected by the drug war. So the hope is delivery companies might be a more viable route to start a cannabis business for someone who has less access to capital.”
Michael Dundas, president and CEO of the marijuana company Sira Naturals and a member of the Cannabis Advisory Board, said state marijuana regulators “are working very hard to try to operationalize the mandate in the statute to create a more equitable cannabis industry.”
“This is yet another way the Cannabis Advisory Board is recommending that the commission adopt a new policy to try to further those goals,” Dundas said.
He added, “It’s a very difficult problem to fix.”
The Cannabis Control Commission is expected to take the recommendations under consideration when it develops draft rules for social consumption and home delivery licenses this spring, with final rules anticipated by June.
