Monday, July 15, 2024

Government Promised Equity Help, Doesn’t Deliver, No One Surprised

The marijuana industry has been transforming in the last couple of years. Social equity has become a mission to provide access to growth, development and ultimately wealth to communities that have been must harmed by the war on drugs.  New York upended their whole system in an effort to provide a pathway, ending in a fiasco with over 1,600 unlicensed dispensaries operating in NYC alone.  Now Massachusetts is the latest to have green egg on their face.  The state government promised equity help, doesn’t deliver and no one is surprised.

pink pig coin bank on brown wooden table

Last August, Massachusetts legislature passed a bill which last created a new fund that promised millions of dollars to equity-owned cannabis businesses. At the time, Republican Gov. Charlie Baker signed  the legislation into law which seeks to promote greater diversity among those participating in the state’s licensed cannabis industry.

The state grants two license that are given to to entrepreneurs who come from marginalized groups or who were harmed by the war on drugs. The fund was due to receive 15% of the revenue collected from the sale of cannabis in the state and give it to social equity and economic empowerment licensed businesses. Last year both adult-use and medical marijuana together hit $1.76 billion in the state, their best year over. This is according to data from the state regulatory body Cannabis Control Commission.

The fund was established, and the Cannabis Control Commssion established the Cannabis Social Equity Trust Fund.  It was duly charged with oversight of the income and the grants. There was some grumbling regarding the board, but it looked as if things were moving forward.

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As it approaches a one year birthday, a group of businesses have petitioned the state Cannabis Control Commission asking regulators to disburse money from a social equity trust fund to existing social-equity-licensed businesses rather than to encourage new entrants to the marketplace.

RELATED: Outdoor Grows Will Uproot The Cannabis Industry

Turns out in the all the excitement of saying they are doing good, they neglected to put the system in place to capture and accumulate the money. One year later, the fund has zero dollars much to the shock of the industry. But not a surprise to the people it is supposed to help.

A potential interim fix by the Office for Administration and Finance is in the works, which could make $2 million-$4 million available for social equity companies within a few months.  But previous revenue is lost and licensed who had thought they would have help will have to develop alternative plans to maintain and grow their businesses.

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