Some cannabis businesses in Massachusetts are getting a bit of a boost through the state’s Cannabis Social Equity Trust Fund, established to encourage participation in the regulated cannabis industry among communities disproportionately impacted by cannabis prohibition and the War on Drugs.
Last month, state officials announced that they would release more than $2 million in emergency grant funding to cannabis business owners qualifying for social equity relief, marking the first funds to be released from the Massachusetts fund since the state first legalized adult-use cannabis in 2016, according to a MassLive report.
And it appears that this is only the start, prompting further grants to aid certain cannabis businesses and business owners in the state. According to Juan Vega, assistant secretary for communities and programs in the Executive Office of Housing and Economic Development, the state’s social equity fund now has more than $27 million.
Similar to other social equity funds across states that have legalized adult-use cannabis, the first-of-its-kind fund for The Bay State is meant to provide training and resources to qualifying individuals coming from communities historically subject to drug enforcement and people convicted of certain cannabis crimes.
While social equity funds and provisions are not uncommon in the growing legal cannabis market of the West, Massachusetts was the first state in the nation “to mandate full participation in the legal cannabis industry by communities that have been disproportionately harmed by marijuana prohibition and enforcement,” according to the program website.
Specifically, it was the first program to direct money to for-profit businesses, instead of nonprofits or municipal programs.
The social equity program supports four tracks, including entrepreneurs (those seeking licensure and ownership), core (individuals interested in cannabis careers at a managerial or executive level), re-entry and entry-level (those reentering society and entering the workforce) and ancillary (individuals with existing transferable skills to support cannabis businesses).
The fund can serve a number of functions, though Vega highlighted the steep start-up costs of entering the cannabis industry, adding that the social equity funds are “being made available to a population that, generally speaking, does not have deep pockets, does not have the access to capital.”
This first round comprises $2.3 million divided between 50 companies, specifically for applicants in difficult financial circumstances or struggling to cover rent or payroll. Vega also said that a second grant program will launch this summer, aimed to help social equity program participants to launch or expand their businesses, adding that “It’s really about helping these companies focus on growth rather than worrying about a bill.”
While Massachusetts first legalized cannabis in 2016, the fund wasn’t created until 2022, utilizing 15% of the money generated through cannabis sales taxes in the state. Part of the delay was due to a technical glitch in state law, which kept the fund empty for more than a year, though lawmakers eventually corrected the error in 2023.
Now, industry leaders are hopeful that the grant will pave a new path and provide ample opportunity for many cannabis professionals in the state and the broader Massachusetts industry as a whole. After the issue was corrected, Vega said that his office was quick to review grant proposals and allocate money to the proper avenues.
Meaka Brown, a member of the board advising Vega’s office on the fund’s administration, said she was “pretty satisfied” with this initial rollout, adding that “The goal and objective was to get some quick cash into people’s hands and I’m hoping it can tide them over.”
However, Brown told MassLive that she hopes to see more data on the businesses using the grants and is pushing for efficient distribution in future grant rounds.
In general, the social equity moves appear to have plenty of support among lawmakers as well. Gov. Maura Healey made a statement last month after the grant was first announced, affirming that her administration is “committed to righting historical wrongs from the War on Drugs, both by addressing inequities in the criminal justice system and by advancing equity in the cannabis industry.”
“With the Cannabis Social Equity Trust Fund, we’re creating a sustainable and inclusive path to the industry for Massachusetts entrepreneurs that have faced barriers to entry,” Healey said. “This funding will fill critical gaps necessary to allow social equity businesses to grow and succeed here in Massachusetts.”
Earlier this year, Healey also proposed a blanket pardon for those with misdemeanor cannabis possession convictions in the state, and she made good on the promise after approving the plan last month. The move made Massachusetts the first state to pardon the crimes of people charged with simple cannabis possession crimes, with the pardon applying to “all adult persons who, on or before the date of this letter, have been convicted of a misdemeanor of possession of marijuana.”
