First round of grant funding will total $2.33 million with no single grant exceeding $50,000
After months of wrangling, let-downs, and anticipation, earlier this month the state Executive Office of Economic Development published a draft of the regulations that will govern the Cannabis Social Equity Trust Fund, and this week they released the actual application. Here’s the updated description of the program from the EOED:
The first of its kind in Massachusetts, the Cannabis Social Equity Trust Fund (CSE Trust Fund) was established by Section 14A of Chapter 94G of the General Laws (Authorizing Statute) and is administered by the Executive Office of Economic Development (EOED). This new initiative will make financial assistance available to eligible applicants for the purpose of encouraging the full participation in the Commonwealth’s regulated marijuana industry of entrepreneurs from communities that have been disproportionately harmed by marijuana prohibition and enforcement. The goal of the CSE Trust Fund is to increase equity and opportunity within the state’s regulated marijuana industry.
The Authorizing Statute also established the Cannabis Social Equity Advisory Board to work with and advise EOED on the promulgation of regulations and administration of the Trust Fund. For information on the Advisory Board’s membership, upcoming meetings, past meeting minutes, etc., please visit the Advisory Board’s webpage. EOED is in the process of promulgating regulations that will govern the administration of the CSE Trust Fund. A public hearing was held January 12th, 2024, on the draft regulations and a copy may be found here.
Ultimately, according to the state, the “CSE Trust Fund will house several financial assistance programs to support eligible cannabis entrepreneurs.” While “the Immediate Needs Grant Program is the first program to provide financial assistance from the CSE Trust Fund and [opened on] January 23, 2024, at 9:00am.” Here’s more on that initial assistance, which will total $2.33 million in grant funding with no single grant exceeding $50,000:
The Healey-Driscoll Administration is pleased to announce the availability of financial resources with the launch of its first program from the CSE Trust Fund: The Immediate Needs Grant Program, which will offer grants to support cannabis business license holders with urgent financial needs. The program will provide grants to eligible Marijuana Establishments and Medical Marijuana Treatment Center businesses (see Appendix I of the NOFA for definitions) in amounts up to $50,000 to support imminent or outstanding expenses essential to the operation of the business such as personnel costs, rent, utility or other facility expenses, loan repayments or debt service, regulatory fees, professional service payments or other expenses that support stabilizing the business.
To be eligible for a grant from this program an applicant must be a duly organized Massachusetts business entity with a provisional or final licensed [sic] issued by the Cannabis Control Commission (Commission) that qualifies as an Economic Empowerment Priority Applicant or Social Equity Business.
As for the “allowable use of funds,” “applicants may request funds to support imminent or outstanding expenses essential to the operation of the business, including but not limited” to:
- Personnel costs: Business payroll expenses.
- Rent, lease, utilities, or other facility expenses
- Regulatory Fees: Application, permitting, licensing and other regulatory fees needed to maintain licensure;
- Professional Services: Outstanding bills for critical services, such as legal, accounting, etc.
- Debt service: Loans repayments or business debt service, both principal and interest, to help bring loans current (not for any prepayment of principal or interest); or
- Other expenses that support stabilizing the business.
It’s been a slog to get to this point. In 2022, Massachusetts lawmakers established the Cannabis Social Equity Advisory Board “to advise the EOED as it administers the Cannabis Social Equity Trust Fund.” But last June, members of that CSEAB were outraged to learn that the fund, which was established to help disadvantaged applicants, will yield tens of millions of dollars less than expected in its first year.
Beyond those issues, there were further complications with transferring the actual money for the program from a so-called Marijuana Regulation Fund to the Cannabis Social Equity Trust Fund.
And at the last meeting of the CSEAB earlier this month, some licensees who are stuck in the provisional phase said businesses like theirs may be short on cash on account of struggling to open for years, in some cases paying expensive leases and enduring other costs, and may not be able to meet the basic financial requirements.
Also, some people testifying questioned why the program would include loans at all, as opposed to being entirely grant-powered. Per the regulations: “EOED shall determine if Financial Assistance shall be provided in the form of grants or loans, which may include direct grants, recoverable grants, low-interest loans, forgivable loans, loan guarantees or other credit enhancements, or other forms of direct or indirect financial support.”
Philip Smith of Freshly Baked Company said, “It should be a grant—I’m not sure why anyone would need the loan.” He also commented on the section addressing “Defaults and Other Material Breaches; Penalties,” asking, “Why would they be taking a license away from an equity operator if they can’t pay back a loan?” Jeff Similien of Lowkey Dispensary in Dorchester also spoke in favor of a grant program and working capital.
Mostly, those testifying asked for details about when loans will be given out. To which they were told, once again, “That information will be coming soon.”
And while some board members and stakeholders will still likely seek adjustments to the program, information and the application are now available.
As of the Dec. 14, 2023 CCC meeting, of 1,533 total applications approved by the commission, 113 were Economic Empowerment applicants, while 320 qualified under the Social Equity Program, and 239 were Disadvantaged Business Enterprises—with 2023 numbers that represented scant improvement over the previous year. Of the 608 businesses that commenced operations by Dec. 14, 25 were EE, 42 were SE, and 74 were DBEs.
Get more info on the trust fund and application process here
