Cannabis Equity Debate Continues, Unresolved (2 Responses)

The Boston Globe’s “This Week in Weed” newsletter by Dan Adams gives a fairly accurate recap of our 8/14 Ordinance Committee hearing on the Cannabis Business Permitting Ordinance. The hearing had to be recessed after it disintegrated into threats of lawsuits and a shouting match in the hallway outside our meeting room. We will reconvene at some point soon but without a public comment period at the next meeting.

I do take issue, however, with the Globe reporter’s editorializing that “Cambridge officials just can’t seem to get it done.” No other city or town in the state has figured out a way to help equity applicants get a toehold in the lucrative cannabis market. In fact, apart from Somerville and Cambridge, most other communities have not even tried to prioritize equity, and only one certified Economic Empowerment business in the entire state has gotten through the state and local permitting process, and its Boston store won’t open until October. The State Legislature has given cities no guidance or funding to help support equity applicants, so Cambridge is left trying to invent and fund its own a social equity program. Does “getting it done” just mean handing the entire multi-million dollar retail market over to the big private investors that backed the medical dispensaries, and saying “sorry, too late” to the equity business applicants representing communities of color wronged by the War on Drugs? Anyone with a workable solution to this equity challenge is more than welcome to step forward — but everyone with a vested financial interest, please stop shouting at us and each other during public comment.

We have 6 registered medical dispensaries (3 that have opened stores and 3 that have permits and are in various stages of progress toward opening) that are seeking to add retail sales, and at least the same number of equity applicants who are applying for permits. Cambridge is required to allow no fewer than 8 retail cannabis stores, based on the number of alcohol package stores. How many we end up with and where they are located will be a factor of the zoning (already approved), the priorities and requirements set in the Business Permitting Ordinance we are still debating, and the Host Community Agreements each applicant is required to obtain at the city manager’s discretion.

Pasting below the entire post by Dan Adams in his This Week in Weed newsletter of 8/17/19:

Cambridge officials just can’t seem to get it done.

After months of discussions and yet another tense hearing at which they were supposed to finalize the city’s system for selecting recreational marijuana operators, Cambridge city councilors on Wednesday were forced to punt on the issue for umpteenth time. 

This time, the stumbling block was a legal analysis by Cambridge’s top lawyer of a plan for established medical dispensaries to donate millions of dollars to economic empowerment applicants in exchange for the city dropping a plan that would freeze existing dispensaries out of the recreational market for two years. 

City Solicitor Nancy Glowa determined that the massive fees would likely constitute an impermissible tax, and that even if they weren’t, probably couldn’t be legally handed over by the city to private entities such as the economic empowerment applicants. At Wednesday’s meeting, she added that there was really no legal way for the city to make the payments a condition of local approval, regardless of whether the funds were routed through a third-party nonprofit, as proposed by the dispensaries. Even passively allowing to dispensaries to promise the donations on a voluntary basis wouldn’t be binding, she said, since a valid contract must have some give-and-take for both parties.

(For whatever it’s worth, we warned in a previous edition several weeks ago that the payments were legally questionable because of the state’s 3-percent-of-revenue cap on payments from marijuana firms to municipalities. *shrug emoji*)

Meanwhile, the dispensaries are warning the proposed two-year exclusivity period for economic empowerment applicants and similar entities is illegal, a violation of a provision in state law saying municipalities cannot “prevent” medical dispensaries from adding a recreational component to their businesses.

Cannabis Control Commission guidance, however, explicitly recommends such exclusivity periods. Allowing dispensaries to proceed with recreational sales after two years, the state and other proponents argue, isn’t the same as “preventing” them from doing so.

So the city is back at the drawing board, and applicants are still stuck without a way to move forward — which, according to the dispensaries, is also illegal under the same law. Zachary Berk, an attorney representing them, stood up during the public comment portion of Wednesday’s meeting to admonish councilors for taking too long and warned that his clients would sue the city if it didn’t finalize a plan that very night.

They didn’t, so now we’ll find out if the dispensaries — which claim to be losing millions every month that Cambridge stops them from going recreational — are bluffing or headed to court for real. 

For more context about the dueling Cambridge proposals and the factions behind each, check out our previous coverage.

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    Jan Devereux
    City Councillor
    Cambridge, MA