CommonWealth Magazine


ALL STATES social equity programs are worthless if entrepreneurs of color do not have access to the money they need to start a business.

That was the message from marijuana entrepreneurs – and a state regulator – who testified at a Legislative Assembly Joint Committee hearing on cannabis policy on Tuesday.

“You need dollars to open up, and a state mandate to have restorative social justice and empower those who have been hurt by the failed drug war means nothing if there is no dollars, “said Blake Mensing, a cannabis lawyer and entrepreneur.

The hearing mainly focused on several bills that would create some form of state-sponsored fund to help marijuana businesses owned by those disproportionately affected by the war on drugs – primarily racial minorities. – access to capital. But while there was general agreement that a fund would be beneficial, many details remain to be worked out, including how a fund would work and where the money would come from.

The handful of invoices vary in their details, but all would provide some form of assistance to minority entrepreneurs, including technical assistance and training, low interest or no interest loans, or grants. Aid would be funded through a range of possible mechanisms – public funds, money that marijuana companies pay in state taxes or local fees, or voluntary donations from marijuana companies or others. Not all invoices include a source of funding.

Today, state statistics show that the cannabis industry is predominantly white and male-owned.

The Cannabis Control Commission gives some level of licensing priority to applicants for economic empowerment and social equity – people disproportionately affected by the war on drugs.

Commissioner Nurys Camargo said 500 applicants have received benefits or training under these programs, but so far only 10 social equity businesses have been approved to open, and only 19 businesses belonging to women, veterans or minorities have been granted permission to open.

“The numbers are not where they need to be,” Camargo said. “Too many people still face significant barriers to participate in the industry, and they deserve to have access. “

Camargo said the biggest barrier is access to start-up capital. Massachusetts has strict safety and environmental regulations, and Camargo said complying with them doesn’t come cheap. Since marijuana is still federally banned, applicants often cannot get bank loans.

“They need access to a state-run fund that can offer capital to start businesses,” Camargo said, adding that the state government has always offered assistance to small and medium-sized businesses in other sectors.

Representative David Rogers, a Cambridge Democrat and former chairman of the cannabis policy committee that sponsored one of the bills establishing a social equity trust fund, said it costs around $ 1 million to open a retail marijuana store.

“Communities of color, women, others who historically haven’t had as much access to capital really need help,” Rogers said. “It was a barrier to entry.”

Because it is so difficult for entrepreneurs to access capital, lenders – including companies looking to get themselves into the marijuana industry without priority status – have tried to lend money to the people. social equity enterprises on predatory terms.

Lorna McCafferty, an activist for the Massachusetts Cannabis Reform Coalition, said she knew of a company that offered to pay the borrower a six-figure salary, but all of the company’s profits would go to the lender – essentially transforming the owner of the social equity business into an employee. Scholange Smith, a participant in the commission’s social equity program, commented, “While they say we shouldn’t be working with all these predatory lenders, that’s all we need to work with.

Several people who testified feared that passing a bill without a source of funding or with an uncertain source of funding – such as private donations – would be ineffective. “Anyone who works with bills knows that bringing in a bill that provides funding without a source of revenue is irresponsible and a waste of time for this committee,” said Avyl Andrade, a farmer who seeks to grow marijuana.

But some also fear that the sources of funding identified in the bills are not sufficient. For example, a bill proposed to use community impact fees paid by marijuana companies to capitalize a fund – but this money is supposed to only be used to reimburse municipalities for costs generated by marijuana companies.

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Journalist, Commonwealth

About Shira Schönberg

Shira Schoenberg is a reporter for CommonWealth magazine. Shira previously worked for over seven years at the Springfield Republican / MassLive.com where she covered state politics and elections, covering topics as diverse as starting the legal marijuana industry, issues with the state foster care system and the elections of US Sen Elizabeth Warren and Governor Charlie Baker. Shira won the 2018 Massachusetts Bar Association Award for Excellence in Legal Journalism and several articles won awards from the New England Newspaper and Press Association. Shira covered the 2012 New Hampshire presidential primary for the Boston Globe. Prior to that, she worked for the Concord (NH) Monitor, where she wrote about state government, city hall, and Barack Obama’s primary campaign in New Hampshire in 2008. Shira is the incumbent. a master’s degree from the Graduate School of Journalism at Columbia University.

About Shira Schönberg

Shira Schoenberg is a reporter for CommonWealth magazine. Shira previously worked for over seven years at the Springfield Republican / MassLive.com where she covered state politics and elections, covering topics as diverse as starting the legal marijuana industry, issues with the state foster care system and the elections of US Sen Elizabeth Warren and Governor Charlie Baker. Shira won the 2018 Massachusetts Bar Association Award for Excellence in Legal Journalism and several articles won awards from the New England Newspaper and Press Association. Shira covered the 2012 New Hampshire presidential primary for the Boston Globe. Prior to that, she worked for the Concord (NH) Monitor, where she wrote about state government, city hall, and Barack Obama’s primary campaign in New Hampshire in 2008. Shira is the incumbent. a master’s degree from the Graduate School of Journalism at Columbia University.

Pierre Bernard, Chairman of the Massachusetts Growers Advocacy Council, appeared to the virtual audience with a Zoom background of a circus. He said unless lawmakers create a fund to give entrepreneurs a financial boost, “we can go to that tent behind us and watch the greatest dog and pony show ever. He explained that the Cannabis Control Commission can develop ways to ensure investors don’t have management control over a business – but lenders will always find ways to issue loans that hamper the ability of the business. owner of the share capital to do business without essentially becoming an employee of the investor. .

Even though a social equity entrepreneur gets priority status, Bernard said, “How does this really help me? If I don’t have the means and the technical support to make it happen, that doesn’t mean much.

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