CCC president troubled by ‘predatory funding deals’ | News
The chairman of the Cannabis Control Board raised concerns Thursday about what he called “predatory funding deals” offered to entrepreneurs and businesses in communities disproportionately affected by decades of cannabis bans. marijuana and renewed the agency’s call on the Legislature to create an alternate source of funding. available.
Opening Thursday’s meeting, Chairman Steven Hoffman noted that commissioners would consider two applications for delivery courier and seven for delivery operator, types of licenses that are currently available exclusively to participants in the social equity program of the CCC and candidates for economic empowerment.
While he was pleased to see “such momentum” behind these delivery licensing options, Hoffman said he was “deeply troubled by continuing reports” that candidates for social equity and economic empowerment would be targeted by potential investors with financing deals that include things like forced sales. once the exclusivity period is over, control over key hiring and personnel decisions, and cash distributions grossly disproportionate to declared ownership.
“While we have no jurisdiction over private negotiations between investors and potential applicants, once we receive an application we have the power and will continue to use that power to review all relevant contracts, including funding contracts, to ensure compliance with our regulations regarding cap limits, required monitoring and disclosure requirements (Economic Empowerment Candidate) or (Social Equity Participant),” said said the president. “And if there are violations, we have the tools to enforce compliance. I am determined to end predatory lending practices in the industry and pledge to use all the resources available to the commission to do so.”
But, Hoffman said, many would-be licensees “also feel they have no choice but to agree to blatant terms” since there are no other sources of funding available. their disposal.
“In this context, I again respectfully implore the Legislative Assembly to take action to create a public source of funding for these deserving entrepreneurs,” he said.
Last year, Hoffman said the issue of the social equity fund was one he and former commissioners have been “banging their heads against the brick wall on for several years.”
Proposals for social equity funds did not gain traction during the last legislative session. The Joint Committee on Cannabis Policy held a hearing in June on a handful of Social Equity Fund bills (H 158/S 63 by Rep. Dan Hunt and Senator Nick Collins, H 166 filed by Rep. Hannah Kane, H 177 of Rep. Dave Rogers, and H 178 filed by Rep. Jon Santiago), but none of the bills emerged from committee for further review and debate among lawmakers. The committee faces a Feb. 2 deadline to make recommendations on bills under consideration.
Massachusetts was the first state in the nation to require equity and inclusion as part of its cannabis legal framework and was the first to launch programs specifically designed to help entrepreneurs and businesses in impacted communities in ways disproportionate to decades of marijuana prohibition.
Access to the capital needed to start a business has repeatedly been singled out as a serious barrier faced by participants in social equity programs or priority candidates for economic empowerment when trying to break into the industry. . Of more than 1,000 applications submitted to the CCC in November, only 232 were from social equity program participants or priority economic empowerment applicants, the CCC’s director of government affairs and policy said in the fall. Matt Giancola.
In November, commissioners used the agency’s new outreach strategy to advocate for the creation of a state-run fund to help those disproportionately harmed by the war on drugs get settled. in the legal cannabis industry.
“The commission supports the adoption of a state-administered fund that includes both public and private funds for economic empowerment and social equity program applicants and licensees to receive loans or grants at low or zero interest for the purpose of obtaining a license and operating their establishment,” reads the policy statement unanimously adopted by the CCC.
In addition to a letter outlining the CCC’s position to the Legislative Assembly, Commissioners Ava Callender Concepcion and Nurys Camargo have planned as a next step to meet with legislators and other stakeholders to promote the commission’s position on a social equity fund.
Concepcion said Thursday that she and Camargo met with the Massachusetts Black and Latino Legislative Caucus in December to talk about the commission’s work and to discuss the issue of the social equity fund.
“I thought that was a really, really good conversation. It was a lot of good questions, good dialogue. So I just wanted to thank everyone in the black and Latino legislative caucus for inviting us and I hope that and I don’t’ I don’t believe this will be the last of our conversations,” the commissioner said.