Confusion around Cambridge's cannabis equity economic empowerment priority?

Shocker: Big cannabis isn't happy

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By Grant Smith

I've heard some confusion regarding the status of the priority period for economic empowerment applicants in Cambridge's adult use licensing process over the past few days.

Fundamentally, the situation in Cambridge boils down to a simple question; can local cities and towns have equity priority periods for EE/SE applicants that exclude medical dispensaries when licensing adult use cannabis businesses?

The medical dispensaries in Cambridge, one owned by a Multi-State Operator (MSO) and one owed by, among others, a wealthy Andover real estate group, argued that no town or city in the Commonwealth should be able to have such a priority period for equity applicants (those most harmed by the war on drugs).

Their view, however, is perplexing in light of the statute they cite in support of their "right" to be included in an equity period designed to benefit those most disproportionately affected by the racist war on drugs.

MGL 94g section 3 subsection (a) (1) (i), linked below for reference, says that local cities and towns cannot "prevent" medical dispensaries from co-locating as adult use establishments but it does not prevent cities and towns from "delaying" those co-locations for the purposes of providing a priority period for equity applicants in their local licensing processes in my opinion.

The ability to have such a priority period for equity applicants (even if such an equity priority period excludes medical dispensaries owned by large multi state operators) is also explicitly contemplated in municipal guidance promulgated by the Cannabis Control Commission which states;

"Some municipalities in Massachusetts are considering prioritizing applicants by allowing them to move forward exclusively for a certain period of time. For example,a municipality may consider only economic empowerment applicants and applicants who are local residents for the first six months."

That quote can be found on page 5 of this document- https://mass-cannabis-control.com/wp-content/uploads/2018/11/Municipal-Equity-Guidance-August-22-1.pdf

To avoid that precedent being set in Cambridge, and to perhaps undermine that formal guidance that the CCC had sent to local cities and towns, those dispensaries engaged in a two pronged attack on the equity priority period; first they attempted to provide shelf agreements and other fiscal incentives to a small amount of equity applicants to be allowed into the priority period in Cambridge (while also working with a "grassroots" consulting firm called Consensus Strategy to bring a show of support for their proposal to a June city council meeting). That June meeting was covered in-depth by Dan Adams at the Globe: link to this excellent article.

That proposed "fund”, however, was rejected by the city council for a myriad of reasons; not least so because, in a September 5th, 2019 letter to the City Council, there was a misleading statement made to the City indicating the "dispensaries had entered into a legally binding contract with the Central Square Business Improvement District" to oversee their proposed fund. That misleading statement, in turn, had to be corrected in a formal letter from the Central Square BID to the City Council on September 8th, 2019 that made it clear no such agreement existed (and that discussions related to overseeing the fund in question had not moved beyond a preliminary stage).

That letter is also attached to this post as an image for reference.

When that voluntary fund was rejected, and the priority period for EE applicants came into force in September of 2019, one of those dispensaries, in turn, then decided to sue the City of Cambridge in an attempt to have the priority period undermined (they also, at that point, withdrew their offer to provide financial assistance to those local equity applicants).

That court case resulted in an initial injunction issued in January of 2020 that put enforcement of the moratorium on hold, however, on April 24th of this year, a Single Justice from the Massachusetts Appeals Court vacated that injunction and allowed the priority period to once again go into force. More information about that case can be found in this article I had covered for midnight mass at the time of the ruling back in April- https://midnightmass.substack.com/p/massachusetts-appeals-court-reinstates

In that context its quite clear why the implications of the case in Cambridge go far beyond the licensing policy of that particular city, and instead reflect the potential for any city or town in Massachusetts to create equity periods for such applicants that exclude medical dispensaries.

In that way, it is perhaps no surprise that certain interests may want to obfuscate discussion surrounding that core question (can cities and towns have equity priority periods that exclude medical dispensaries, such as those owned by the large MSO in Cambridge or otherwise?) as, in this case, that kind of equity priority period directly threatens the profits of those moneyed interests.

Public policy, however, should not be written to protect the profits of a few moneyed groups and, in turn, it is entirely reasonable for local cities and towns to have equity priority periods that delay, but do not prevent, medical dispensaries from co-locating as adult use facilities in those towns (again, based on my reading of MGL 94g section 3 subsection (a) (1) (i)).

Link to MGL 94g section 3 subsection (a) (1) (i) for reference https://www.mass.gov/info-details/mass-general-laws-c94g-ss-3#(a)