Group requests a “one-time emergency transfer of $50 million to the Cannabis Social Equity Trust Fund … to compensate for the persistent delays in distributing these funds.”
In 2022, Massachusetts lawmakers established a Cannabis Social Equity Advisory Board “to advise the Executive Office of Economic Development (EOED) as EOED administers the Cannabis Social Equity Trust Fund.” The legislation charged the CSEAB with “advis[ing] the Executive Office of Economic Development on the development of regulations, administration, and reporting of the Cannabis Social Equity Trust Fund,” which “was established to encourage the full participation in the state’s regulated marijuana industry of entrepreneurs from communities that have been disproportionately harmed by marijuana prohibition and enforcement.”
It’s been nearly a year since then-Gov. Charlie Baker set the fund in motion, and stakeholders are still waiting—for an application, for details, for anything. The statute calls for 15% of recreational pot taxes from the commonwealth’s Marijuana Regulation Fund to go into the trust fund. With the state doing more than $100 million a month in adult-use sales, that seemed like it would be a whole lot of assistance; but in June, members of the CSEAB learned that the fund will initially yield tens of millions of dollars less than expected.
At a CSEAB meeting this week, members discussed the application process, how loans could be structured, and a range of topics that run the gamut from fiduciary to philosophical. “Are we a charity?” board member Aaron Goines said. “Or a fiduciary with state money? … What is the mandate of the fund?” As for specifics, administrators said the application should be ready in the next week or two. However, in addition to an expected tens of millions being cut to the $2 million to $3 million range, the trust still has no money in it, mainly due to bureaucratic technical issues.
The group Equitable Opportunities Now, which “educates and empowers people of color to become active participants in the Massachusetts legal cannabis market,” is on top of the situation, and has sent two letters to Beacon Hill lawmakers this month outlining the situation as well as the stakes. They’re urging state leaders to initiate a “one-time emergency transfer of $50 million to the Cannabis Social Equity Trust Fund … to compensate for the persistent delays in distributing these funds.” Their letters can be found below, in full, with the most recent one first. -TJM Editors
Read EON’s Nov. 16, 2023 letter below …
Dear Senate President Spilka, Speaker Mariano, Ways & Means Chairs Rodrigues and Michlewitz, and Cannabis Policy Chairs Gomez and Donahue,
We appreciate your ongoing work to pass the FY23 year-end supplemental budget and hope you find an expeditious resolution to the differences between your chambers’ bills.
On behalf of Equitable Opportunities Now leadership and supporters across the Commonwealth, I am writing to urge you to pass the technical fix to the Cannabis Social Equity Fund as soon as possible to make those funds before the end of the year, preferably as part of a complete compromise supplemental spending, but, if needed, though a standalone bill.
Both of your chambers appear to agree on language regarding the fix, as both chambers’ bills have identical language on this topic. It is our hope that you could quickly pass this important policy as a standalone bill during an informal session at your earliest convenience if there appears to be a protracted path toward resolving differences between the larger spending bills.
As you are likely aware (and detailed further in our prior letter below), the communities most harmed by the war on drugs and over-policing have been waiting more than a year for EOED to be able to distribute grants and loans from the new Cannabis Social Equity Fund that you created in Ch. 180 of the Acts of 2022 — after years of advocacy and modest progress.
The entrepreneurs you and your colleagues sought to help with Ch. 55 of the Acts of 2017 and Ch. 180 of the Acts of 2022 face an increasingly competitive market that’s becoming ever more saturated by well-financed multistate operators and the medical dispensaries that were given a first-mover advantage at the start of this new industry.
We hope you will move quickly to deliver on voters’ and your vision of a more equitable industry by making these funds available as soon as possible, and considering opportunities to bolster those funds while there is still time to have a meaningful impact on the industry.
Thank you for your consideration, and all of your work to foster a more equitable cannabis industry. Please do not hesitate to contact me if you have any questions or if we can be helpful in any way.
Best regards,
Kevin Gilnack
Policy Co-Chair, Equitable Opportunities Now
Read EON’s Nov. 7, 2023 letter below …
Dear Senate President Spilka, Speaker Mariano, Ways & Means Chairs Rodrigues and Michlewitz, and Cannabis Policy Chairs Gomez and Donahue,
Thank you again for your commitment to advancing equitable economic opportunity in the Commonwealth, and particularly for your leadership in passing An Act Relative to Equity in the Cannabis Industry (Ch. 180).
Restorative justice has been a central component of the Commonwealth’s cannabis policy since the drafting of Question 4, and we deeply appreciate that you and your colleagues have helped Massachusetts maintain its status as a leader in equitable cannabis policy innovation in the seven years since voters legalized cannabis.
In furtherance of your dedication to creating a more equitable cannabis industry, we urge you to retain and strengthen Section 15 of H. 4090, Governor Maura Healey’s technical correction to the Cannabis Social Equity Trust Fund.
We applaud Gov. Healey, Speaker Mariano, Senate President Spilka, and Ways & Means Chairs Rep. Michlewitz and Sen. Rodrigues for working to address the protracted technical challenges and other delays that have left this critical fund unseeded seven years after passage of Question 4 and 14 months after the effective date of Ch. 180 and urge you to include language that moves this fund forward in your fiscal year closeout supplemental budget.
While Gov. Healey’s proposal provides an elegant solution to ensuring budget makers and administrators can accurately calculate, transfer, and disperse these revenues moving forward, it does not go far enough in addressing the urgent needs of entrepreneurs from communities harmed by the war on drugs.
Entrepreneurs have been waiting for too long as market conditions have only grown more challenging; they can’t afford – and shouldn’t have to – to wait until Jan. 1 as proposed in the Governor’s bill. We urge you to deliver on the promise of Ch. 180 now by appropriating a one-time emergency transfer of $50 million to the Cannabis Social Equity Trust Fund for the dual purposes of making funds available as soon as possible and beginning to compensate for the persistent delays in distributing these funds detailed below.
Furthermore, we urge you to continue your leadership as a national model for equitable policy development by increasing your investment in the equity fund by taking up Sen. Miranda’s bills S. 55 and S. 56.
Unfortunately — and despite the Legislature’s and CCC’s focus on equity — the entrepreneurs and communities that Question 4 was supposed to lift up have been left behind for the last seven years as well-financed medical dispensaries and multistate operators have dominated the market.
We appreciate the Legislature codifying into Chapter 55 of the Acts of 2017 that excess cannabis revenue should go to “programming for restorative justice, jail diversion, workforce development, industry specific technical assistance, and mentoring services for economically-disadvantaged persons in communities disproportionately impacted by high rates of arrest and incarceration for marijuana offenses” as one of five spending priorities. But despite this progress, few funds were appropriated to these programs in the intervening years.
We further appreciate that the Legislature mandated in Chapter 1800 of the Acts 2022 that “15 per cent of the fund shall be transferred to the Cannabis Social Equity Trust Fund,” the new grant and loan fund created by the law and administered by the Executive Office of Economic Development to provide grants and no/low-interest loans to entrepreneurs from communities harmed by the war on drugs.
Despite this legislative progress between 2017 and 2022, technical issues persist, leaving the most disadvantaged communities this law intended to support even further behind. According to EOED’s Cannabis Social Equity Trust Fund FY23 Annual Report:
Section 17 of Chapter 2 of the Acts of 2023, as signed on March 29, 2023, amended the Authorizing Statute to state that “[e]xpenditures from the [Cannabis Social Equity Trust Fund] shall not be subject to appropriation.” Prior to this amendment, the Trust Fund was unable to receive or expend funds. A first transfer of funds into the Trust Fund will occur later this year after the approval of a closeout supplemental budget for FY2023.
While entrepreneurs, advocates, and legislators have worked diligently to move equitable cannabis policies forward over the last seven years, systemic challenges have set these efforts further back. Thanks to your leadership, Ch. 180 is beginning to address some systemic challenges like HCAs that favor larger operators, it is important to understand the challenges we seek to address.
Ch. 55 of the Acts of 2017 prioritized both Economic Empowerment applicants from communities harmed by the war on drugs and existing medical operators. While that policy was well-intentioned to prioritize both equity and efficiency, it effectively drove capital, real estate, and municipalities toward the already profitable, well-financed, established operators. The first-mover advantage enjoyed by medical operators was only further compounded by inequitable HCAs and municipal licensing processes that are only starting to be rolled back today.
Given how saturated the market has already become with general applicants and how far behind the Commonwealth is in our lofty and important goals for an equitable industry, we hope you will act with urgency to move the Cannabis Social Equity Trust Fund forward and adequately seed it as soon as possible.
Thank you again,
Kevin Gilnack, Policy Co-Chair, Equitable Opportunities Now
Armani White, Policy Co-Chair, Equitable Opportunities Now
Shanel Lindsay, Co-Founder, Equitable Opportunities Now
cc:
Joint Committee on Ways & Means
Joint Committee on Cannabis Policy
Cannabis Social Equity Advisory Board
