Financial Difficulties Are Blocking Diversity in Massachusetts' Cannabis Industry

Financial Difficulties Are Blocking Diversity in Massachusetts' Cannabis Industry

Even in states that have enacted social equity programs, minority business owners are still struggling to raise enough money to even participate in the newly-legal pot market.

by Chris Moore

Ever since the beginning of cannabis prohibition, minority and low-income communities have borne the brunt of marijuana law enforcement, leaving these communities ravaged by the War on Drugs while whiter, wealthier neighborhoods are left unscathed. Even though the majority of U.S. states have now legalized marijuana in some form, issues of racial diversity continue to be a problem, as the lucrative new market is being snapped up by white-owned businesses, while individuals whose lives have been ruined by prohibition find themselves excluded from a chance to participate.

Without a set of federal laws to regulate this new industry, states are on their own to sort out racial diversity for themselves. In Maryland, cannabis regulators awarded all of the state's medical cannabis licenses to white business owners, delaying the rollout of the program for years due to legal challenges and legislative attempts to enforce diversity. State lawmakers finally passed a bill to help ensure minority participation in the industry this year, and the push for social equity is spreading across the country, with similar initiatives being drafted in states and cities like New Jersey, Arkansas, Oakland, Boston, and Atlanta.

But even in states that have enacted social equity programs, minority business owners are still struggling to get ahead. In Massachusetts, where state officials are just now awarding their first licenses to businesses in the newly-legal recreational market, regulators have found that economically disadvantaged applicants are struggling to raise enough funding to participate.

Unlike other states where individual municipalities are left on their own to create social equity programs, Bay State lawmakers ensured that considerations for diversity were included in the state's initial cannabis regulations. Shaleen Title, one of the five members of the state's Cannabis Control Commission (CCC), told MERRY JANE that "the program is designed to create and build pathways into the marijuana industry, and redress historic harm done to individuals and communities disproportionately impacted by imbalanced rates of arrest and incarceration for cannabis (and other drug crimes) as a result of state and federal drug policy."

In order to address these concerns, the state allows individuals from these communities to apply for an Economic Empowerment Priority Review, designed to help these businesses to get up and running before larger, wealthier firms are approved. The state has also created a social equity program to offer professional and technical services to qualifying applicants. All canna-businesses in the state are also required to submit plans showing how they will work to promote racial and gender equality within their own workplaces.

Yet despite these initiatives, only three out of the 326 economic empowerment applications that the CCC received have come up for a full review. Concerned about the effectiveness of the program, the CCC sent an email survey to all of these applicants in an attempt to discover what was blocking them from completing the application process. Last Friday, the commission released a report explaining the results of the survey.

The survey found that time and money were two of the biggest challenges that these applicants faced, with 44.4% reporting that they have had difficulty raising enough capital, and 36.5% reporting that they are still working on their business plan. Another major challenge that these applicants face is a regulation that requires all applicants to receive prior approval from their local government. The state also allows local governments to prohibit canna-businesses in their jurisdictions, and a surprisingly large number of municipalities have chosen to do so. Unlike wealthier business owners, it is much harder for lower-income applicants to just uproot and move to another city that welcomes legal weed.

The survey does not necessarily represent a complete picture of all of the applicants, however, as the CCC only received responses from 63 out of the 326. In light of this, CCC Chairman Steve Hoffman said it was "premature" to predict whether the state will succeed in its goal of fostering diversity. "It's going to take some time," Hoffman said at a public meeting, Boston-based WBUR Radio reports. "We will monitor how this process works. We will tweak whatever we need to tweak to make it work. If we need to go back to the Legislature and ask for changes in the legislation, we will do so."

The commission will continue to work on collecting information from surveys and focus groups so that they can adapt their regulations to offer more help to applicants who are struggling to succeed. Commissioner Title said that the issues need to be resolved as soon as possible, considering that "the fact that the benefit here is priority means that the more time goes on the and the more licenses we grant, the less meaningful that benefit becomes," according to WBUR.

These issues highlight the fact that the creation of social equity programs may not be enough on its own to foster a diverse cannabis industry, and officials from other canna-legal states would be wise to keep an eye on whether the Bay State is able to address the conflict at hand.


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Chris Moore is a New York-based writer who has written for Mass Appeal while also mixing records and producing electronic music.



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