The True Colors of The Social Equity Program

by | Cannabis News | 0 comments

Author: Ben Dreiker

Date: July 20, 2020

A growing number of states across the nation are implementing Social Equity Programs (or “SEPs”) into their marijuana provisions. The SEP is an opportunity that encourages all individuals in the state to work and operate in the cannabis space. Especially those who have been disproportionately impacted by the prohibition of marijuana. 

However, the SEP in Massachusetts has experienced a tremendous setback due in most part to big cannabis companies. After the state issued more than 70 marijuana establishment licenses to equity, economic empowerment, and disadvantaged business enterprises, only three have been able to open across the state thus far. As a result of the inequity in the cannabis industry, a coalition of state cannabis regulators and advocates are pressuring the Massachusetts State Legislature to follow through on their promises and pass a bill that would recognize and ensure that the cannabis industry is more accessible to small, local businesses and entrepreneurs of color. At this time, the coalition is attempting to advocate for the reform of the social equity program before the legislative session ends on July 31.

The social equity program in Massachusetts was founded on the premise that it would be equitable to all individuals who were disproportionately impacted by the war on drugs and help them find a means of entry into the legal cannabis space. The major issue with the social equity program is the start-up cost. When a cannabis company is attempting to enter into the cannabis space, the start-up cost for them is generally around $1 million. For social equity applicants finding the means to generate this amount just to start is close to impossible. One of the main reasons why it’s next to impossible for social equity applicants to obtain their start-up cost is due to the legality of cannabis on a federal level. 

Currently, banks are not allowed to disperse loans to cannabis companies as it interferes with the federal law. However, in Massachusetts, one of the four bills that the coalition is trying to push for is S.2650 in the legislature. This bill would direct some of the fines, fees and taxes that are derived from the marijuana industry into no-interest loans for participants in the Cannabis Control Commission’s social equity and economic empowerment programs.

Hopefully, the Massachusetts legislature will finally come around to actually implementing these measures and ensure that the social equity program in Massachusetts finally gets off to where it was designed to be.

Photo Credit: The Boston Globe – Segun Idowu, executive director of the Black Economic Council of Massachusetts, spoke Thursday during an online rally in support of marijuana equity legislation. SCREENSHOT

Source: https://www.bostonglobe.com/2020/07/16/marijuana/regulators-advocates-press-mass-legislature-follow-through-promise-marijuana-equity/

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