Last week, Rep. Adrian Madaro and Massachusetts House passed legislation that encourages and facilitates participation in the cannabis industry from communities disproportionately harmed by marijuana criminalization by creating a Social Equity Trust Fund.
The Madaro-sponsored bill, An Act relative to equity in the cannabis industry (H. 4791), passed the House 153-2 after a similar version of this legislation passed in the State Senate. The legislation moves back to the Senate for further consideration.
“This legislation continues to build upon the House’s deliberate efforts to ensure equity in the cannabis industry, particularly for communities which have disproportionately suffered from the burden of racism in enforcing drug policies,” said Madaro. “I’m proud to have voted in favor of these important provisions to improve equity and access to the cannabis industry, including a fairer host community agreement process, a social equity trust fund, and clear permitting for social consumption, as well as an expedited expungement process for those affected by outdated laws”.
Madaro, who once served on the Joint Committee on Marijuana Policy when the state’s marijuana laws were being hashed out, said the highlight of the bill is the establishment of a state Cannabis Social Equity Trust Fund. This fund will make grants and loans available to social equity program participants and economic empowerment priority applicants. Madaro said this will fill the gap left by the unavailability of banking services in the industry and facilitating participation in the cannabis industry of entrepreneurs from communities that have been disproportionately harmed by marijuana prohibition and enforcement.
Social equity businesses are marijuana establishments primarily owned by individuals eligible for the social equity program or whose ownership qualifies it as an economic empowerment priority applicant.
Twenty percent of the revenue collected from the sale of marijuana and marijuana products must be transferred to the Cannabis Social Equity Trust Fund which will be administered by the Executive Office of Housing and Economic Development, in consultation with a newly created Cannabis Social Equity Advisory Board.
“This legislation continues to build on the efforts we have made in the cannabis industry to ensure equitable access for all Massachusetts residents, particularly those who have been disadvantaged by marijuana prohibition and enforcement,” said House Chairman of the Joint Committee on Cannabis Policy, Rep. Daniel Donahue (D-Worcester). “I want to thank Speaker Mariano for his steadfast commitment to ensure social equity applicants have access to the capital they need to be successful, while also removing barriers to their entry into the market. This bill lays out a clear and fair approach to expungement for prior marijuana convictions that ensures the best interest of justice is served by providing a real and effective avenue for many to put their past behind them.”
Madaro added that the bill also strengthens the host community agreement process and clarifies procedures for permitting social consumption sites.
Since the passage of the cannabis legalization law in 2017, the Cannabis Control Commission has asked the Legislature for further clarity on the agency’s authority to review host community agreements, which are executed between a marijuana establishment and their hosting municipality.
“This legislation authorizes the Commission to review host community agreements, and if determined lawful, to approve them,” said Madaro. “The legislation also authorizes the Commission to prioritize social equity program businesses and economic empowerment priority applicants for expedited review.”
The legislation also clarifies the scope of host community agreements and adds new criteria, such as no host community agreement can include a community impact fee that is beyond the businesses fifth year of operation and no host community agreement can include a promise to make a future monetary payment, in-kind contribution or charitable contribution.
Also, the new legislation may once and for all open the door for cannabis-style cafes like the ones that exist in Amsterdam. The social consumption policy, which would allow the sale of marijuana and marijuana products for consumption on the premises where sold, is authorized by existing law. However, this legislation amends it to ensure proper procedures are taken regarding local initiative petitions. Under this legislation, as an alternative to local initiative petitions, a city or town may also allow for social consumption sites through the passage of a by-law or ordinance.