Equity support promised by the government is not holding up

The marijuana industry has changed in recent years. Social justice has become a mission to provide access to growth, development and ultimately prosperity to communities harmed by the War on Drugs. New York turned its entire system on its head to create a way out, which ended in fiasco with over 1,600 unlicensed pharmacies operating in NYC alone. Now Massachusetts is the latest to have a green egg on its face. The state government’s promised equity aid is not holding up, and nobody is surprised.

Last August, the Massachusetts legislature passed a bill that most recently created a new fund that pledged millions of dollars to publicly-held cannabis companies. It was then that Republican Gov. Charlie Baker signed the law into law designed to encourage greater diversity among those involved in the state’s licensed cannabis industry.

The state issues two licenses that are given to entrepreneurs who are from marginalized communities or have been harmed by the War on Drugs. The fund would receive 15% of the proceeds from the sale of cannabis in the state and pass it on to licensed social justice and economic empowerment companies. Last year, both adult-use and medical marijuana combined in the state hit $1.76 billion, its best-ever year. This is according to data from the state regulator, the Cannabis Control Commission.

The fund was formed and the Cannabis Control Commission established the Cannabis Social Equity Trust Fund. He was duly responsible for overseeing revenue and grants. There was some grumbling about the board, but it looked like it was moving forward.

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Just before its one-year anniversary, a group of companies petitioned the state Cannabis Control Commission, urging regulators to disburse money from a social justice trust fund to existing social justice-licensed companies instead of encouraging new entrants.

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It turns out that in all the excitement telling them they were doing good, they failed to set up the system for collecting and accumulating the money. A year later, to the great shock of the industry, the fund has zero dollars. It’s no surprise to the people it’s supposed to help.

A possible interim solution by the Department of Management and Finance is in the works that could provide $2 million to $4 million for social equity firms within a few months. But previous revenue is lost and licensees who thought they could get help must devise alternative plans to sustain and grow their business.