ATHOL — On April 8, the Massachusetts Senate passed a sweeping marijuana reform bill aimed at promoting equity in the cannabis industry while also clarifying several aspects of the ballot question approved by voters in 2016.
The bill essentially updates the state’s existing cannabis laws while also instituting a first-of-its-kind social equity program for cannabis entrepreneurs. Proponents of the bill argued that only about 7% of cannabis businesses operating in Massachusetts can be considered “social equity” businesses. The bill also formally caps the community impact fees allowed in host community agreements (HCA) between municipalities and cannabis businesses at 3 percent.
Missing from the legislation is a provision to make the proposed reforms retroactive to 2016. That proposal, included in an omnibus bill that had been under consideration by the Senate Ways and Means Committee, was of major concern to municipal officials across the state, including Athol Town Manager Shaun Suhoski.
“I’m very appreciative,” Suhoski told the Athol Daily News, “that senators Gobi and Comerford were so responsive to the concerns, not only that I raised, but many managers, mayors across the Commonwealth raised concerns over a bill that would have taken effect essentially six years ago and wiped out all the good work that’s been done since then.
“Having said that, the final bill had a lot more detail to it; it’s pretty dense reading. But I think it’s good that Senate Ways and Means put forward a bill that seeks to advance the social equity trust fund and puts in place a framework that cities and towns can follow to adhere to that so that we don’t have 351 different equity programs. We have guidelines. I think they tightened the CCC’s (Cannabis Control Commission) oversight role.”
Suhoski was also pleased that there was less tinkering with HCAs than previously proposed.
“The didn’t reframe how host community agreements — the parameters surrounding them going forward — and that’s fine because that means everyone knows the rules in advance and they’re not going to change after the fact.
“So, all in all, I appreciate the work of our local senators and the outcome from the Senate Ways and Means Committee, and now we’ll keep an eye on this and make sure the House version of the bill does not seek to reinstitute a retroactivity clause, which would essentially seek to void about thousand or 1,100 contracts statewide that cities and towns are relying upon, and that the industry entered into in good faith. I think this bears continued watching.”
Suhoski stressed that, under the bill passed by the Senate, the CCC will be given broad authority over host community agreements going forward.
“The assurances I’ve been given from our senators,” he said, “are that that’s on a going forward basis. But we’ll watch what House Ways and Means comes up with. Cities and towns need to pay attention — if this is important to them — they need to pay attention and ensure that, down the road, the CCC doesn’t try to do a grab-back after-the-fact rule or regulation.”
Suhoski said he has been in contact with state Rep. Susannah Whipps to make sure his comments and concerns are passed along to the House Ways and Means Committee.
“We have to make sure the House is aware of our concerns as well,” he said.
The legislation passed by the Senate also calls for creation of a new Cannabis Social Equity Trust Fund which would make loans available to social equity program and/or economic empowerment priority applicants. With startup costs for retail cannabis businesses sometimes topping $1 million, funding for applicants from socioeconomically disadvantaged backgrounds is often unattainable. Traditional banks don’t issue loans for such businesses because marijuana is still illegal under federal law.
Because startup costs for cannabis retail stores can easily top $1 million, with no help from traditional banks due to federal cannabis laws, opening them is often unattainable for those from disadvantaged socioeconomic backgrounds. The bill would provide grants and loans to this group, funded by marijuana excise tax revenue, which would be about $18 million next fiscal year.
Ten percent of the state’s marijuana excise tax revenue would be set aside for the trust fund. Supporters estimate that between $15 million and $18 million would go into the program in fiscal year 2023. In FY21, the state collected $112.37 million in cannabis excise taxes, meaning the trust fund would have been given about $11.24 million.
Greg Vine can be reached at gvineadn@gmail.com