Call for Action - Cannabis Economic Empowerment in Massachusetts!

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Dear Cannabis Control Commission,

We are Economic Empowerment, Social Equity, and Minority applicants that are aligned to represent and give voice to people disproportionately impacted by the war on drugs. We are committed to the fight for equitable access into the cannabis industry. Our goal is to see the Marijuana Industry thrive in a diverse and equitable way to ensure true equity and inclusion in the industry.

We are writing to express our deep concerns and reservations regarding the significant recent change to ownership requirements for economic empowerment applicants that was instituted by the Cannabis Control Commission (CCC).  We are requesting and recommending that this change be immediately reversed to prevent further harm to those who have already been often irreparably harmed by the war on drugs.

There are several problems with this new policy – several of them are outlined below from the perspective of EE and SE applicants.

1.   This dramatic change by the Commission was made with no warning, public discussion, or visible advocacy with the community. This has the immediate impact of perpetuating a longstanding deep mistrust by Economic Empowerment Program entrepreneurs who were already skeptical of the Cannabis Control Commission's commitment to ensure the mandate for Black people's inclusion in the cannabis industry.  Further, seeing such a significant change makes people wonder why similarly aggressive regulatory pivots haven’t been made toward issues of racial equity for disadvantaged Black local entrepreneurs in this industry in the past 2 years by the Commission.

 2.   Many economic empowerment applicants have lived under white economic supremacy, fought against a number of financial pressures in this cannabis space, and resisted exploitation by these RMD’s and MSO's only to have predatory contracts reminiscent of sharecropping be legitimized and ratified by the CCC. The 51% ownership/control requirement is an important one for maintaining power and control over our businesses and protecting us from predatory investors (and they spent a tremendous effort trying to sidestep that regulation) who are very persistent in their pursuit of profit in this industry.  This feels like a race to the bottom with the 10% equity stake. In the short time since this policy change has been made, some of us have received calls indicating that investors are now tearing up previous contracts they had with economic empowerment applicants and social equity applicants prior to this regulatory change.

3.   We as economic empowerment applicants promoted in good faith the Economic Empowerment Program and other equity provisions mandated by the Commonwealth and represented it to our communities as an attempt to ensure Black ownership and meaningful participation. To now have watered down economic empowerment applicant groups misrepresenting (less than 51% Black ownership) what the program originally promised is an affront and insult to our integrity and to that part of the EE concept. That ownership ambiguity creates confusion on the ground in a space where the community has to make decisions on the type of businesses they wish to support - these granular issues (100% vs 10% Black ownership) can become less of a focus for community members, and ownership can be manipulated well before they reach your desk. As you know, ownership misrepresentation was and is already a problem before this change.

4.   This change appears to be in direct conflict with city ordinances such as Boston's which requires 51% ownership for equity applicants which has been touted by the CCC as a shining example of commitment to equity. This exposes an important question as to whether the Commonwealth is committed to equity cosmetically or substantively in the economically quantifiable way.

5.  If this change was done to entice investors at the expense of Black entrepreneur's equity position in their own companies, then it was a shortsighted decision that does not address the lopsidedness of financial/political power of everybody else other than Black entrepreneurs in this country's cannabis industry, but it does helps solidify the inequality. We feel it is imperative to mention the lack of political power because the lack of power to move our HCAs forward is a major reason our holding costs are so high, thus making us prey to predators after years of municipal delays.

A commonly accepted definition of Economic Empowerment is the capacity of people to participate in, contribute to and benefit from growth processes in ways that recognize the value of their contributions, respect their dignity and make it possible to negotiate a fairer distribution of the benefits of growth.

This policy change by the CCC has unilaterally compromised our ability to negotiate a fair deal, because this has greatly lowered the floor of our ownership/equity discussions, which is the exact opposite of empowering.  A 10% stake in a company is where ownership and control are expected to be less than dignified for a community that has paid tremendously and still pays in countless ways.

In addition, this change seems to undermine the significant work and progress that has been made on the legislative front as the state is already preparing a no interest loan fund to support equity.  This change seems to only benefit private fiscal interests at the expense of the EE program. 

In summary, we feel that this change unexpectedly and fundamentally undermines our negotiating position with investors and puts the CCC on a direct collision course with equity advocates and Black entrepreneurs who have structured their businesses and lives according to a more equitable business environment.

The timing of this change is also problematic as it is a direct assault on the overall stability of the cannabis industry, Economic Empowerment Applicants, Social Equity applicants and specifically Black entrepreneurs; who have been hanging on by a thread financially due to unrealized promises of inclusion. Adding the impact of making this change during a pandemic and you should understand why we are perplexed and outraged at this situation! COVID-19 has laid out clearly the racial inequities that Black people are subjected to that are literally life and death.  Marijuana prohibition and its lasting consequences is a major cause of our inability to fend off this pandemic. At this time it is more important than ever that the CCC not make further missteps to undermine those in our communities who were disproportionately impacted by the “War on Drugs”.

In the spirit of full transparency, we request answers to the following questions as pertains to this significant policy change:

1.   What was the catalyst for making this change?

2.   What data was used to decide to make this change?

3.   How was the data acquired that was used to make this change?

4.   Why were those most affected by this policy not consulted before making this policy   change?

5.   Why were there no public discussions or forums about this change before it took place?

6.   What plans for ensuring transparency will the CCC employ in order to correct this error?

Let us be clear that our immediate recommendations are that:

1.   This policy should be quickly repealed.

2.   The 51% ownership mandate for EE/SE status be reinstated to ensure the program is not undermined by private finance capital at the expense of equity.

Please know that it is our aspiration that this communication gives the CCC clear, accurate and useful information for use in ensuring that all of its policies related to the structure of EE and SE businesses promote, protect and retain equitable and inclusive regulation in the cannabis industry in the Commonwealth of Massachusetts. As the CCC knows, the law requires the elaboration of “procedures and policies to promote and encourage full participation in the regulated marijuana industry by people from communities that have previously been disproportionately harmed by marijuana prohibition and enforcement and to positively impact those communities”.

The content of this document is the result of dialogue among Economic Empowerment applicants, Social Equity applicants, and Minorities from disproportionately impacted areas who have been working on cannabis equity issues for years.  We continue to strive for fair and equitable access to this industry especially due to the slow rollout and abysmal rate of participation of EE and SE applicants. Massachusetts has the opportunity to set a precedent for other states to follow but EE and SE applicants and minorities must have a level playing field as business owners in the cannabis industry or it is highly unlikely that we will succeed. This level playing field can only be created with deliberate planning and action steps by the Commission working with the members of the community and without efforts to undermine equity such as those instituted by this egregious policy change.

Thank you for your time and consideration.