Mass. Senate bill aims to diversify the cannabis industry

By Colin A. Young of the State House News Service

Far-reaching marijuana legislation that targets some of the most persistent issues that activists, regulators, businesses and municipalities say is preventing Massachusetts from realizing the full potential of the 2016 legalization law has been approved in unanimously by the Senate on Thursday afternoon, with senators introducing it as both an economic development and racial justice bill.

The bill would impose stricter restrictions and increased oversight on host community agreements that marijuana companies are required to enter into with their host communities, provide grants and loans through a new Cannabis Social Equity Trust Fund to Cannabis Control Commission (SE) Social Equity Participants or Economic Empowerment (EE) Priority Applicants, and create a method for cities and towns to Authorize on-site cannabis consumption establishments that are already authorized under CKC regulations.

“By clarifying the requirements of agreements with the host community, making financial investments to increase social equity, and enabling the full implementation of the cannabis industry by allowing the authorization of social consumption, I am confident that this legislation contributes to the continued growth of a competitive and fair commercial marijuana industry here in the Commonwealth of Massachusetts,” said Senate Ways and Means Committee Chairman Michael Rodrigues in introducing the law Project.

The Legislature has long maintained an essentially hands-off approach to marijuana policy. Lawmakers squandered opportunities to act before voters approved decriminalization in 2008, medical marijuana in 2012, and adult legalization in 2016, but then delayed and rewrote significant parts of the 2016 election law legalizing marijuana. Aside from a bill the House passed in early 2020 with provisions similar to the Senate bill, the legislature has largely avoided cannabis issues since 2017.

Senator Sonia Chang-Diaz, who chairs the Senate Cannabis Policy Committee, said the bill that passed her committee unopposed aims to address “long-standing problems with long-identified solutions.” .

“If you talk to advocates, to policy experts, to the Cannabis Control Board, you’ll find near universal agreement. They’ll tell you…the costs of entering the industry are too high and that “there is a severe lack of access to capital in this industry. It usually takes one to one and a half million dollars of cash to open a new cannabis retail store or three to five million for a manufacturing plant Chang-Diaz said. She added, “So when you need that kind of cash to get into the business, to get your foot in the door, it’s no surprise that despite our best intentions, the industry has remained majority white and majority in already wealthy hands.”

Chang-Diaz compared the marijuana bill to other steps the Senate has taken to address racial injustice, such as passing criminal justice and police reform laws, recognizing the June 19 as a public holiday and last week’s vote to ban discrimination based on natural and protective hairstyles in workplaces, schools and public spaces.

“Addressing our gaping racial divide is the next front in this work toward the pursuit of racial justice in our state,” she said. The Jamaica Plain Democrat added, “So we know that if we’re serious about racial justice work, we need to address this racial wealth divide. And that’s why I’m so proud that we’re embracing this bill of law today because this bill is a racial wealth gap bill.”

Massachusetts was the first state in the nation to require equity and inclusion as part of its cannabis legal framework and was the first to launch programs specifically designed to help entrepreneurs and businesses in impacted communities in ways disproportionate to decades of marijuana prohibition.

But more than three years after the first legal sale here, only 6% of licenses issued for the cannabis industry have gone to SE program participants or priority EE applicants, the Joint Committee on Cannabis Policy said during publication of his bill. Of more than 1,000 applications submitted to the CCC in November, only 232 were from SE or EE applicants.

The bill would make grants and loans available to Cannabis Control Commission Social Equity (SE) program participants or Economic Empowerment (EE) priority applicants, including interest-free loans and forgivable loans, through a Cannabis Social Equity Trust Fund. Each year, the fund would receive 10% of the money from the Marijuana Regulatory Fund, where revenue generated from the state marijuana excise tax, application and licensing fees, and penalties is deposited. Of the industry.

For fiscal year 2021, a 10% share of cannabis excise revenue ($112.37 million) would have represented approximately $11.24 million for the trust fund. Rodrigues estimated the 10% share for fiscal year 2023 would be around $18 million, while Chang-Diaz expected a range of between $15 million and $18 million for fiscal year 2023.

More than two years ago, the CCC approved regulations that paved the way for social drinking establishments where adults could purchase marijuana and use it in a social setting. But the agency said the pilot program it has designed for up to 12 communities “could not begin without a change in state law or passage of legislation that will first allow cities and towns to allow social consumption in their communities”.

Senate bill would allow communities to choose whether to allow social consumer businesses within their borders via local ordinance in addition to making a change needed for cities or towns to use Referendum Avenue local authority to green light marijuana cafes. The Senate rejected an amendment by Minority Leader Bruce Tarr that would have eliminated the order option and required the decision to be made before voters.

“Allowing this to go through the local political process, this decision-making to go through the local political process in the same way as all other municipal ordinances, will both save the municipal resources needed to execute a ballot question and to avoid delays resulting from waiting months or years until the next election cycle in some cases, while maintaining accountability to voters,” Chang-Diaz said.

Discussions on social drinking sites generally led to talk of road safety, and senators proposed a handful of amendments aimed at putting marijuana-impaired driving on a par with driving under the influence. drunk. Most of these amendments were either withdrawn or defeated, but the Senate passed a Tarr Amendment that would create a special commission on impaired driving to monitor and report on the development of technology related to reliable drug testing. marijuana among drivers.

“While I would have hoped that we would have taken steps to make legislative changes to this bill, the commission that is created by this particular amendment is laying the groundwork for us to move forward and make these changes to the future based on additional information and insight from experts,” Tarr said. He cited data released by the National Highway Traffic Safety Administration in February estimating a 15.5% increase in road deaths. in Massachusetts in the first nine months of 2021 compared to the same period in 2020 from 258 to 298.

On the issue of Host Community Agreements (HCAs), the bill would require the CCC to “review and approve Host Community Agreements” and also to “regulate and enforce all Host Community Agreements.” The CCC can only approve requests for provisional authorization or renewals if it has certified that the HCA is in compliance.

The bill would also more specifically define what can and cannot be included in contracts, and codify a municipality’s right to waive the requirement to have an HCA like a handful have already done. Through the passage of an amendment by Senator John Velis, the bill would also require the CCC to develop a model HCA that communities can use as a template to ensure their agreements are consistent with what the CCC would approve. .

The HCAs have given companies, potential companies and regulators adjustments basically since the CCC started licensing companies here. Entrepreneurs, lawyers, lobbyists and regulators have reported stories of cities and towns demanding more from businesses than state laws allow, up to 3% of gross sales. The CCC began wrestling with the issue in 2018, determined that it had no authority to intervene or deny an application based on the HCA, and voted in January 2019 to formally request that the legislature grant it this power.

The bill the Senate passed on Thursday has a good chance of being in the mix as lawmakers send bills to the governor’s office in the coming months; House Speaker Ron Mariano’s office said solving many of the same issues was a priority for him.

“If the legislation is to pass, I also want to thank the House for the consideration it will give to this legislation,” CCC Chairman Steven Hoffman said Thursday morning before the start of debate in the Senate.

Norman D. Briggs