A new fund in Massachusetts could help level playing field in cannabis industry

The cannabis industry has been a boon to Massachusetts with adult use marijuana retail sales in 2022 equaling $1.42 billion. Gross adult use sales from 2018 to the present is equal to $4.5 billion, according to a May 30 Cannabis Control Commission report.

But the legalization of marijuana has left behind a large number of people suffering from an earlier time — when the possession, consumption and distribution of marijuana was illegal and carried penalties and jail time.

Most of the people affected are people of color.  

A year-old advisory board wants the new Cannabis Social Equity Trust Fund, established in 2022, to help entrepreneurs in those communities get into the state's regulated marijuana industry.

And sooner rather than later, said Meaka Brown-Corea, a former cannabis banking regulatory specialist at Green Check Verified, a technology company that provides financial services for legal cannabis businesses. She serves on the state Cannabis Social Equity Fund Advisory Board.

Cannabis prices have sunk, businesses have closed and the money that had been available has dwindled, she said. Distributing the funds will help the cannabis industry and the state’s economy. 

“The gold rush has come and gone,” Brown-Corea said. “There's just a lot of businesses that are on a wing and a prayer right now.”  

The Advisory Board is meeting with the Executive Office of Economic Development on Friday to discuss the workings of the fund. 

What is the Cannabis Social Equity Trust Fund?

The fund was established to encourage "the full participation in the Commonwealth's regulated marijuana industry by entrepreneurs from communities that have been disproportionately harmed by marijuana prohibition and enforcement," according to the state website. The board, also established in 2022, was created to advise the Executive Office of Economic Development on administration of the fund.

The fund could potentially funnel $15 to $20 million per year towards social equity businesses, according to Cannabis Control Commission Chairwoman Shannon O'Brien in an interview on Boston Public Radio.

Brown-Corea calls the fund “an attempt to try to right wrongs and to balance the playing field so there isn’t yet another industry that Black and brown people find themselves shut out of.” 

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Black people more likely than white people to be arrested for marijuana possession

Marijuana use is roughly equal among Black individuals and white individuals, yet Black individuals are 3.73 times as likely to be arrested for marijuana possession, according to “The War on Marijuana in Black and White,” a 2013 publication by the American Civil Liberties Union. 

A 2016 ACLU report found that higher arrest rates led to criminal records and negative repercussions. Arrests for even small amounts of cannabis have made it difficult for some individuals to find jobs, housing and secure loans. 

In every state in the union, Black people were more likely to be arrested for marijuana possession. In some states, they were up to six to ten times more likely to be arrested.  

In 31 states, racial disparities were larger in 2018 than they were in 2010.

A 2017 study from Marijuana Business Daily found that 81% of marijuana business owners were white, while just 5.7% were Latino, and 4.3% were Black. Now that it's legal, those individuals most affected by marijuana laws are being excluded from economic opportunities, according to the Marijuana Business Daily. 

Arrest records and the federal prohibition against cannabis mean they have limited access to banking and no access to traditional loans and capital markets, according to Brown-Corea.  

Massachusetts is trying to address the inequity by establishing the trust fund. The Executive Office of Economic Development and the advisory board have been meeting for a year to create the guidelines, requirements, selection process and penalties for when such a fund will start dispersing money.  

Brown-Corea hopes Friday's meeting will signal the start of the fund’s distribution.

Denise Coffey writes about business and tourism. Contact her at dcoffey@capecodonline.com.   

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