Cannabis Equity Debate: No Easy Answers

The Cambridge City Council isĀ in the final stages of drafting a Cannabis Business Permitting Ordinance that would allow at least eight adult-use (recreational) cannabis retail stores to open in Cambridge. (The minimum number of stores can be no less than 20% of the number of alcohol package stores in the city, which is about 40.) The Ordinance Committee has been debating what “equity” means in this lucrative new market and how best to help state-certified Economic Empowerment (EE) applicants compete. On June 27 our Ordinance Committee hearing went from 5:30-9:00 pm including two hours of passionate public comment. The Sullivan Chamber was standing room only and a spill-over crowd was watching on TV monitors in the hallways. Several dozen medical marijuana advocates arrived more than 90 minutes before the hearing began, wearing t-shirts that said “Patient.”

The biggest point of contention is whether to permit the five licensed Registered Medical Dispensaries (RMDs) to sell recreational cannabis in the first wave of adult-use retail stores that open, or whether to impose a two-year moratorium on the existing RMDs so that only EE applicants can open in that initial period. To open, either of these groups would need to meet the zoning requirements that we adopted last year, which govern location and other criteria and require a special permit from the Planning Board, and to negotiate a Host Community Agreement (HCA) with the city manager. The HCA would include a community impact fee of up to 3% of gross revenue for the first five years. EE applicants were given an advantage in the zoning because they can be located within the 1800-foot buffer that we set between cannabis stores.

At the June 27 hearing we debated whether the best way to help EE stores compete is by giving them a two-year head start, or whether what they most need is access to financial capital and training. Caught in the crosshairs are the registered patients who fear that they could lose access to medical marijuana, which is formulated to meet their specific needs and which is not subject to the 6.25% state sales tax or to the 3% local excise tax on retail sales. Faced with the prospect of a two-year delay, the Cambridge RMDs are offering to create a $5M accelerator fund by each contributing $250K annually over four years. Administered by a to-be-determined local nonprofit and an independent advisory board, the accelerator fund would provide no-strings-attached grants to local EE businesses as well as training and other resources to help them build up their businesses. The RMDs also say they would commit to continuing to serve medical patients, so there would be no disruption to the continuity of care or supply of non-taxed product. Many of the patients present at the hearing supported the idea of the accelerator fund. The committee asked whether $5M is “enough” and how that amount was determined. I asked if there should be a provision that the financial contributions be continued beyond four years once we see how level the playing field actually becomes.

Much of the public comment was concerned with promoting “equity” in the recreational market, which in other states has been dominated by “big (corporate) cannabis.” The three-part Boston Globe Spotlight series (“The Hidden Titans of Pot”) highlighted the lack of transparency about some of the corporate relationships and political ties that make it impossible to “follow the money.” We all want to help locally owned and managed businesses that will reinvest profits in our community. The Mass. Cannabis Control Commission tried to bake equity into the state law by creating the Economic Empowerment certification and prohibiting any cannabis entity from owning more than three stores statewide to try to prevent industry monopolization. But so far the state’s good intentions have fallen short, and no EE applicant has yet opened in any city or town. Cambridge (as usual) seeks to be first in setting a more progressive standard.

I think we all sincerely want to craft municipal permitting regulations that would start to undo the disproportionate harm that the criminalization of marijuana had on communities of color and help EE businesses open viable retail stores. But there is not yet consensus on how to achieve that goal. The Council is being asked to pick winners and losers in a high-stakes new market. The Encore casino just opened in Everett, and the odds of winning there may be higher than in the recreational cannabis permitting debate. There will at least one encore hearing this summer, as we continue to try to hash out Cambridge’s cannabis business permitting ordinance.

POSTSCRIPT: This Week in Weed covered “The Civil War in Cambridge” in its email newsletter on 6/29.


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Jan Devereux
City Councillor
Cambridge, MA