Local rule is undermining Massachusetts’ attempt to create equity in the cannabis industry

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By NATALIE FERTIG, Politico

Published on 3/06/2020 07:33 AM EST

BOSTON — Massachusetts was the first state to create a program to diversify the cannabis industry, in hopes that legalization wouldn’t only benefit already-wealthy white men.

So far, it hasn’t worked.

Massachusetts identified 122 women, minorities and veterans who should have gotten first crack when marijuana became legal for adult use in 2016. Fast forward to 2020: Of those 122 applicants with “economic empowerment” priority, only 27 have submitted applications to the state, eight have received a license, and none are open for business.

The applicants — and some state and local officials — blame the state’s complex system of local “host community agreements“ for sabotaging the licensing process and putting the entire diversity program at risk.

“I think the HCA process has turned into a barrier and a tool of inequality that it was never meant to be,” said Massachusetts Cannabis Commissioner Shaleen Title. “Some amount of local control is completely appropriate, and certainly every state has some degree of local control. But I do think in Massachusetts, the control that municipalities have has gone way beyond what’s appropriate.”

Other states also struggle with local control hindering overarching goals: In California and Colorado, more than seven in 10 cities bar marijuana businesses from operating. In Washington state, one in four cities still bar marijuana sales. And in Oregon, five counties in the central and eastern part of the state do not have a single city selling marijuana, creating long driving distances for many rural Oregonians looking for access to cannabis.

Massachusetts’ problem, though, goes beyond cities not wanting pot on their turf. The lack of state oversight of host community agreements has resulted in corruption and groups shut out of the licensing process.

Now the Commonwealth is working on a fix: A bill that would give the Cannabis Commission the ability to review host community agreements advanced out of committee in January.

Host community agreements are a five-year contract between the business owner and the town that requires the cannabis business to pay up to 3 percent of its gross annual income back to the town for any extra costs the town may incur. That “community impact fee,” though, has been misused in so many towns that the federal government has launched a criminal probe.

In August 2018, the Boston Globe reported that many host community agreements were potentially violating state law. In January 2019, the Massachusetts Grower Advocacy Council told state regulators that 79 percent of the host community agreements they reviewed in the state “require marijuana establishments to pay annual contributions to the town that either plainly violate the statutory terms or may result in unlawful community impact fees.” Last week, public radio station WGBH reported that out of approximately 500 community agreements, 314 went beyond the limits set by the state.

Read the full story on Politico.

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