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In 2016, Massachusetts voters approved an initiative that required the state to create policies that would bring those disproportionately impacted by the war on drugs into the new legal cannabis industry. Today, minority-owned businesses make up only a small fraction of the hundreds of marijuana dispensaries in the state. Special Correspondent Kira Kay reports on why equity candidates are struggling in the legal weed industry.
When the state of Massachusetts legalized marijuana, it also established a social equity program, designed to give individuals most impacted by the war on drugs an opportunity for training and development in the cannabis industry, as well as expedited licenses. Several years into the effort, the Massachusetts marijuana industry is booming but few licenses are held by minorities.
Now the state has created new licenses for delivery businesses to lower some barriers for equity applicants. NewsHour Weekend Special Correspondent Kira Kay has more.
This segment is part of our ongoing series: Chasing the Dream: Poverty and Opportunity in America.
It's Juneteenth in the Jamaica Plain neighborhood of Boston. The new federal holiday means a long weekend for local residents, who have come to the Seed Dispensary to pick up their favorite cannabis products. But seed isn't just a dispensary, it's also a museum. Curator Niambe McIntosh is the daughter of reggae legend and cannabis activist, Peter Tosh.
My father along with other musicians like Coolio, Snoop, Mick Jagger, James Brown have all been arrested for cannabis possession.
The museum charts America's so-called war on drugs that even in the last decade saw nearly four times as many Black people arrested for cannabis possession.
Our country spends hundreds of thousands of dollars performing raids to this day.
This history is personal for McIntosh: her brother died after an attack by a fellow inmate while under arrest for marijuana possession.
This is a multi-billion-dollar industry and most consumers have no idea. They, you know, have the privilege to walk into any dispensary, without having the faintest idea about who are the people who have sacrificed in order for this industry to exist.
This blending of cannabis business and social justice reflects a core mandate of state law. In 2016 voters approved Ballot Question 4, which made Massachusetts the first state to require policies to bring people disproportionately harmed by cannabis prohibition into the newly legalized industry.
The state's Cannabis Control Commission requires all businesses to have a plan for positive impact on regions and communities deemed hard-hit by the war on drugs. This includes recruiting employees who have a past drug conviction.
Nearly five years on, the cannabis industry in Massachusetts is blooming, popping up in towns more known for tourism, like Gloucester with its seafaring history, which is now home to happy valley – a boutique operation where cannabis is cultivated on location, then harvested and processed and sold in a space that more resembles an Apple store.
South of Boston, in Brockton, Legal Greens opened in March.
There's not a lot of Black businesses in Brockton and Brockton is a majority minority city And it was my priority for me to come into downtown purposely for me to revitalize this area because it has never been a good area.
Vanessa Jean-Baptiste is the first Black woman to open a recreational dispensary on the us east coast.
She was an early participant in another special state cannabis initiative: equity programs that prioritize qualified applicants for expedited licenses and even offer training for those from impacted communities wanting to get into the business.
I would not be in business without it, and it's huge for them to even do a program like that because no other state has done that before. I know people that have been killed by the war on drugs. So it's more so for me to give back to the community because I know that my community desperately needs it.
But Jean-Baptiste's story is rare: she's one of only 12 equity applicants to actually open their doors, out of 257 operating licenses issued by the state. Cannabis Control Commissioner Nurys Camargo agrees, the system is struggling.
The cannabis industry does not look like me. It doesn't look like a lot of the communities that have been disproportionately harmed by the failed war on drugs. We have about 4 to 5% of applicants that either are economic empowerment or social equity applicants. That's not what we intended in the beginning. It's not what the goal was.
Camargo says what's called "corporate cannabis" is dominating the market.
I've seen many of the big players, the big players, come out and open up two and three dispensaries, but we're still leaving out the little guy. We have, um, folks that have done this well in the illicit market, and we want them to cross over, but there's no capital there's no, you know, they don't have the access, they don't have the network.
It's funny, 10 years ago when I was arrested, I was considered the worst person around, um, the local paper, villainized me over a very small amount of cannabis. Now, flash forward to here we are, I'm considered a young, bright entrepreneur for doing the same exact thing that I was doing 10 years ago!
Devin Alexander is who the Massachusetts law had in mind. He was arrested for marijuana possession in high school, derailing his plans of joining the air force.
He learned quickly that even in his hometown of Quincy, he was priced out of opening a dispensary in the approved area.
It wasn't available for lease. We had to buy it outright, which would have cost us $2 to $3 million.
Then there's what's called a host community agreement. Even though cannabis is regulated by the state, the cities and towns have the ultimate say on who gets to open their doors.
While municipalities can tax businesses up to 3% to offset what they see as additional burdens–like parking, extra policing, or drug abuse programs–these agreements have sometimes also asked for thousands of dollars in additional fees and donations. The mayor of Fall River was just convicted of extorting bribes in exchange for his handful of available licenses.
These towns don't have equity in mind and they just want to go to the highest bidder. You know, if you have the money to play, you have a better chance at obtaining the host community agreement than a small funded equity applicant. Other states aren't doing this. We're the only one in the country that really gives the municipalities this level of control.
If anyone's story demonstrates the potentially crippling impact of host community agreements, it is Chauncey Spencer.
This is huge!
Oh, this is only a small portion of it.
NewsHour met him two years ago, at the storefront he was renting in anticipation of an agreement with the City of Boston. Spencer was in the first pool of state-certified priority applicants, in 2018. He thought that was his ticket to success.
I'd get my licensing first, I'd be first to open. And, um, you know, I knew that there would be crowds. I knew it would be high, you know, all this publicity, I was ready for it.
But Spencer's storefront is now an immigration office. He went bankrupt after spending $100,000 and had to give up the lease. No approval ever came.
The longer I waited, the more competition I began to get.
But just to be clear, they didn't come back to you and say, oh, you missed a form or we need more clarification. There's a zoning issue for your location?
You were paying rent.
Yes, paid rent, $5,000 a month, um, sitting on location. Meanwhile, I just watched them dole out license after license, after license.
In response to an investigation by the Boston Globe, city officials said they handled Spencer's application like any other, and fairly. But pushed by now-Mayor Kim Janey, an early proponent of cannabis legalization, the city scrapped that approvals process and created a new oversight board. But it was all too late for spencer.
I know people who have refinanced their homes, I know who have lost their pensions. And I think that it's up to our legislators, it's up to us as regulators. It's also up to our mayors, our town administrators. We're going to lose the opportunity and the window will close and Massachusetts would have done some things right. Um, and left some things out. And I think that other states in the country have watched Massachusetts and have taken from our best practices. Um, but I think have been a little bit more progressive in some of their social equity now, um, in terms of their, their funds and their programs.
The Massachusetts legislature is now considering action to extend the state requirements of equity down to the municipal level and grant oversight of levied fees to Camargo's commission.
And now, new delivery licenses are being reserved only for equity applicants for at least three years. Delivery is less expensive to set up.
Seeing the delivery as a sector that is completely untouched and just ready for new faces and fresh blood in it made me really want to go after the delivery model instead of having a dispensary.
Coming out of the vault, and then go right into our sally port and load up the vans.
Devin Alexander helped lobby for that period of exclusivity and is now busy setting up plans with his partners for a two thousand square foot warehouse and a fleet of secure vehicles.
He also would like to see an equity trust fund, something else the legislature is considering. Cannabis is still federally illegal, making banking very hard for entrepreneurs.
You see some states like Illinois and Oakland, California, they're giving their equity applicants, no interest loans in the six figures. And I could tell you that goes a long way because when you're talking to some people trying to raise capital. If you had low interest loans and you show them, okay, I just need this much more to get to the next level. You would see a lot more equity applicants getting through the process.
Finally, some cities are taking their own initiative, like Cambridge, which has a special period right now just for equity entrepreneurs. Chauncy Spencer is now trying there. He has his eye on a new space in a fast-developing area. It's currently a pet store. The location holds a great deal of symbolism.
People ask me, why do I feel the need to come to Cambridge? And I said, you know, I do have a relationship with Cambridge. Uh, that relationship is that they held me in that jail right there. I feel as if they should be able to allow me to become a successful businessman in the same space.
When you first came to look at your new potential storefront down the street here, did you do a double-take?
Absolutely I did. I did. Um, you know, I said, no, one's going to believe this, no, one's gonna believe this. I can't wait to tell this story.
Still, it's a hard process. We went along with Spencer on his crucial permitting hearing at Cambridge City Hall. He was grilled on everything from window tinting to trash pick-up.
How do you plan on not overwhelming the existing parking?
And during public comments, a local community group complained Spencer hadn't consulted with them. The board made this a requirement before they would grant approval.
He had that meeting and has now been given his local permit. But he's starting from scratch–new architecture plans he drew himself, and a fresh start at fundraising. In a bittersweet decision, he accepted development support from a major cannabis company and hopes they may offer him a supplier agreement. He's excited and grateful for the help, but realizes his current dreams will look different from his early ones.
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Zachary Green began working in online and broadcast news in 2009. Since then he has produced stories all over the U.S. and overseas in Ireland and Haiti. In his time at NewsHour, he has reported on a wide variety of topics, including climate change, immigration, voting rights, and the arts. He also produced a series on guaranteed income programs in the U.S. and won a 2015 National Headliner Award in business and consumer reporting for his report on digital estate planning. Prior to joining Newshour, Zachary was an Associate Producer for Need to Know on PBS, during which he assisted in producing stories on gun violence and healthcare, among others. He also provided narration for the award-winning online documentary series, “Retro Report”.
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