Massachusetts’ law that legalized recreational marijuana has been hailed as the first in the country to pave the way for those affected by the War on Drugs to enter the new industry. Four years later, this effort to diversify ownership has failed.
So much so that two members of the state Cannabis Control Commission expressed disappointment with the results and called on the Legislature to create a loan fund to help these candidates secure seed money to launch marijuana companies.
“We have issued over 70 provisional licenses to the types of businesses that we are trying to encourage, but only three of them were able to open, only one is black owned, so of course we have to take responsibility for those. statistics after almost three years of work, “said Shaleen Title, commissioner.” We need to be transparent about what we need to change this in the future.
“We have done a lot to prioritize these applicants to provide training, to reduce application fees and license fees, and we have seen progress,” said Steven Hoffman, chairman of the commission. “But the big hurdle seems to be that they can’t get the funding to start a business.”
Critics say candidates who have been affected by the war on drugs need business capital, but not in the form of loans that they have to pay back with interest.
“When you’ve been disproportionately affected, which means you’ve sacrificed and invested your life through criminalization… you’ve suffered a financial blow,” Shekia Scott, former director of community outreach for the commission, said during ‘a telephone interview with WGBH News. “As a black African American woman who technically in Boston has a net worth of $ 8, I wouldn’t want to apply for a government loan which I believe was instrumental in creating and implementing … The war on drugs. . ”
Scott referred to a 2015 report from the Federal Reserve Bank of Boston that showed black residents born in the city had a median wealth of $ 8, while the median wealth of white residents was nearly $ 250,000.
Hoffman and Title have appealed to lawmakers in the state, whose official session is scheduled to end on July 31, to divert 10% of the excise tax revenue from marijuana sales to a loan fund. So far this year, the tax has raised around $ 50 million.
Because marijuana is illegal under federal law, Hoffman noted, it discourages banks and credit unions from lending to applicants who lack deep-pocketed investors who can provide capital to start a cannabis business. What would be more useful than loans, advocates say, would be outright grants.
“Massachusetts prides itself on being liberal, but liberal capitalism always creates systemic racism,” said Saskia Vann James, a lobbyist for the Massachusetts Recreational Consumer Council. “Instead of a loan, we need a loan cancellation and / or grant program.”
The council was recently released from its contract with the commission to help those affected by the war on drugs get into the cannabis business. She said the board’s reviews were the same with or without a contract.
His organization, Vann James said, would like to see all cannabis tax revenues used to empower future business owners.
“Zero dollars has gone to areas disproportionately affected by the war on drugs,” she said, pointing to a Boston Globe Report earlier this year on the excise taxes on marijuana, which revealed that most of that revenue went to commission and drug treatment.
Earlier this month, the paper found that marijuana operators have paid millions to fund police details outside of stores – a fact that strikes a chord with activists who have called for cuts and reallocations of police funding.
Another organization focused on equity in the cannabis industry seemed more flexible on loans and grants.
Richard Harding, of the Real Action for Cannabis Equity (RACE) group, said the grants would be optimal, but was willing to accept a loan fund as a means of providing assistance.
“The conundrum is what the legislature will pass, and also, will it do what is necessary to help these companies gain a foothold in the cannabis industry?” I know [apart from] where you get the money, access to capital is an absolute must to be successful, ”Harding said in a telephone interview Monday.
“If this was a perfect world and I was king for a day, I would make the money available as a catalyst to get these businesses off the ground,” Harding said. “If it’s going to provide access to capital, whether it’s low interest loans or grants, I think that would be a good thing, but as you know, the devil is always in the details.
Title said it was up to “the powers of lawmakers” to decide whether the most effective use of this cannabis revenue was grants, loans, funds for support organizations or something else.
“All policy makers are responsible for playing a role in this discussion until the revenue goes to communities of color,” she said. “My question is, how long are we going to ask communities of color to wait for the benefits that have been promised them in law?
Scott, who stepped down from his post on the commission last month, also asked for increased funding for his social equity program, which provides training and technical assistance. She said her budget was $ 300,000 per year.
The legislation that Hoffman and Title support also calls for the creation of a separate fund that would go to the social equity program. This fund would be financed by diverting part of the application, license and renewal fees that cannabis establishments pay to the state.