Massachusetts

Equity Project State Briefing

Social Equity

Social Equity Definition / Criteria

  • i. Previous Cannabis Conviction:
  • ii. Income:
  • iii. State Residency:
  • iv. Qualifying Neighborhood / Municipal Residency:

In the Massachusetts adult use sector, The Social Equity Program is not a license type. Upon completion of this program, participants will have acquired tools and training to apply for and obtain a license through the Cannabis Control Commission (Commission), but program participation does not guarantee licensure. In addition to the state’s Social Equity Program, the Commission will provide priority licensing review to “Certified Economic Empowerment Priority Applicants.” Social Equity Program participants and Certified Economic Empowerment Priority Applicants have exclusive access to three license types for a period of time.

Social Equity Program 

Applicants are eligible for the Social Equity Program if they demonstrate they meet at least one of the following criteria:

  1. They have resided in an area of disproportionate impact for at least 5 of the past 10 years and have an Income that does not exceed 400% of Area Median Income and 
  2. They have a past drug conviction and they have been residents of Massachusetts for at least the preceding 12 months;
  3. They have been married to or are the child of a person with a drug conviction and they have been residents of Massachusetts for at least the preceding 12 months
  4. Any individual listed as an owner on the original certification of an Economic Empowerment Priority Applicant who satisfies one or more the following criteria:
    • Lived for five of the preceding ten years in an Area of Disproportionate Impact, as determined by the Commission;
    • Experience in one or more previous positions where the primary population served were disproportionately impacted, or where primary responsibilities included economic education, resource provision or empowerment to disproportionately impacted individuals or communities;
    • Black, African American, Hispanic or Latino descent; or
    • Other significant articulable demonstration of past experience in or business practices that promote economic empowerment in Areas of Disproportionate Impact.

Certified Economic Empowerment Priority Applicants 

In accordance with state law, the Commission will provide priority licensing review to Certified Economic Empowerment Priority Applicants who demonstrate at least three of the following six criteria:

  • Majority of ownership belongs to people who have lived in Areas of Disproportionate Impact for five of the last 10 years.
  • Majority of ownership has held one or more previous positions where the primary population served were disproportionately impacted, or where primary responsibilities included economic education, resource provision or empowerment to disproportionately impacted individuals or communities.
  • At least 51% of current employees/subcontractors reside in Areas of Disproportionate Impact and will increase to 75% by the first day of business.
  • At least 51% of employees or subcontractors have drug-related convictions, but are otherwise legally employable in a cannabis-related enterprise.
  • A majority of the ownership is made up of individuals from Black, African American, Hispanic, or Latino descent.
  • Owners can demonstrate significant past experience in or business practices that promote economic empowerment in Areas of Disproportionate Impact.

Source:

935 Mass. Reg. 500.105. General Operational Requirements for Marijuana Establishments. Subsection 17
Common Wealth of Massachusetts Cannabis Control Commission Social Equity Program. Retrieved January 3, 2021

Social Equity Provisions

Massachusetts social equity program offers participants the following benefits:

  • Seed-to-Sale tracking system monthly fees waived.
  • Free technical assistance and training uniquely available to social equity applicants and owners in the following areas:  Management, recruitment and employee trainings;  Accounting and sales forecasting;  Tax prediction and compliance;  Legal compliance;  Business plan creation and operational development;  Marijuana industry best practices;
  • Expedited license application review for individuals who maintain 10% ownership in the business.  
  • 100% reduced rate for Annual Delivery Licensee Fee for the first year and 50% reduced rate for subsequent years .
  • Assistance with identifying or raising funds or capital.

Source:

935 Mass. Reg. 500.005. Fees. Subsection (b)
935 Mass. Code Reg. 500.105. General Operational Requirements for Marijuana Establishments. Subsection 17
Common Wealth of Massachusetts Cannabis Control Commission Summary of Equity Provisions. Retrieved January 3, 2021

License Priorities and Set Asides

  • License Priorities / Set Asides:
Yes

In Massachusetts, social consumption establishment licenses, marijuana delivery operator licenses, and marijuana courier (formerly known as delivery-only) licenses are limited on an exclusive basis to businesses controlled by majority ownership of “Economic Empowerment Priority Applicants” or “Social Equity Program” participants. However, this exclusivity period is only for 24 months for the marijuana courier licenses and 36 months for social consumption establishments licenses and marijuana delivery operator licenses.

Source:

935 Mass. Code Reg. 500.005. Fees. Subsections (6)(c) and (11)(d)

Fee Waivers and Reductions

  • Fee Waivers / Reductions:
Yes

Massachusetts waives adult use cannabis application fees for Social Equity Program participants.  Massachusetts offers a 50% reduced rate on annual licensing fees for businesses with majority Social Equity Program or Economic Empowerment Priority Applicants and Massachusetts Minority Business Enterprises (MBE), Women Business Enterprises (WBE), and Veteran Business Enterprises (VBE). For annual Delivery Licensee fees there is a 100% reduction in the initial licensing fee for Social Equity and Economic Empowerment Priority Applicants. Upon renewal and each year after there is a 50% reduction.

Source:

935 Mass. Code Reg. 500.005. Fees. Subsection (b)

Other Financial Support for Social Equity Applicants and Licensees

Massachusetts currently does not have funding specifically allocated to support their social equity program. However the state does have a Marijuana Regulation Fund which is subject to appropriation. Money in the Marijuana Regulation Fund can be expended for a multitude of  activities including ​​industry specific technical assistance, and mentoring services for economically-disadvantaged persons in communities disproportionately impacted by high rates of arrest and incarceration for marijuana offenses.

Source:

Mass. Ann. Laws Ch. 94G, § 14.. Subsection b. Marijuana Regulation Fund
MetroWest Daily News "State urged to form equity fund to address cannabis industry access". Retrieved January 11, 2022
CommonWealth Magazine "Minority marijuana businesses seek state-backed capital". Retrieved January 11, 2022
The 192nd General Court of the Commonwealth of Massachusetts Bill S.63. Retrieved January 11, 2022

Other Licensing Provisions

License Caps

  • License Caps:
No

Massachusetts adult use framework does not have any license caps at the state level.  The total number of licenses in a community is locally controlled. However, a single licensee is capped at 3 marijuana retailer licenses, 3 medical marijuana treatment center licenses, 3 marijuana product manufacturer licenses and 3 marijuana cultivator licenses. 

Localities may opt out of participating in the adult use cannabis market, however after 2019 localities must submit any proposed restrictions to the voters.There is a carve out protecting  medical cannabis operators existing prior to 2017, as a an ordinance can not prevent the conversion of a medical marijuana treatment center to a [adult use] marijuana establishment engaged in the same type of activity.

Source:

Mass. Ann. Laws Ch. 94G§ 3. Local Control. Subsection (a)(2)
Mass. Ann. Laws Ch. 94G§ 16. Limitation on Number of Licenses

Application Selection Process

  • Selection System:
Merit

In Massachusetts adult use cannabis licenses are distributed based on merit. The Commission will review adult use cannabis licensure applications based on its priority status and when it was submitted. Within 90 days of license application submission, the Commission will issue either a provisional license or a rejection.

  License applications shall be evaluated based on the applicant’s:

  1. Demonstrated compliance with the laws and regulations of the Commonwealth;
  2. Suitability for licensure based on the provisions within the law (935 CMR 500.101(1), 500.800 and 500.801;) and
  3. Evaluation of the thoroughness of the applicant’s responses to the required criteria. The Commission shall consider each license application submitted by an applicant on a rolling basis.

Source:

935 Mass. Code Reg. 500.102. Action on Applications. Subsection (1)(a)
CommonWealth of Massachusetts Cannabis Control Commission Licensing Process. Retrieved January 3, 2021

Felony Disqualification on Ownership

  • Ownership Exclusion for Felony Convictions:
Yes
  • Exemption for Cannabis Offenses:
Yes

Massachusetts’ adult use framework disqualifies applicants for cannabis licensure on the basis of certain convictions. The Massachusetts Cannabis Control Commission conducts criminal background checks on prospective adult use cannabis business owners. A license cannot be granted to anyone with a prior felony conviction. The law creates a carve out, protecting individuals with qualified marijuana-related convictions and possession of a controlled substance convictions, unless the offense involved distribution to a minor.

Source:

Mass. Ann. Laws Ch. 94G, § 4. The Cannabis Control Commission
Mass. Ann. Laws Ch. 94G, § 21. Criminal history database checks
935 Mass. Reg. 500.030. Registration of Marijuana Establishment Agents. Subsection (2)(f)
935 Mass. Reg. 500.101. Application Requirements. Subsection (1)(b)
Mass. Gen. Laws Ch. 94G § 5. Licensing of marijuana establishments. Subsection (b)(4)
935 Mass. Reg. 500.450. Marijuana Establishment License: Grounds for Suspension, Revocation and Denial of Renewal Applications. Subsection (12)

Employee Criminal Records

  • Conviction Restrictions for Employees:
Yes
  • Exemption for Cannabis Offenses:
Yes

In Massachusetts, all employees at a cannabis establishment must apply for an Agent Registration Card [work permit] which requires a state background check. Individuals with felony convictions are prohibited from working in the industry. The law creates a carve out, protecting individuals with qualified marijuana-related convictions and possession of a controlled substance unless the offense involved distribution to a minor.

Source:

935 Mass. Reg. 500.030. Registration of Marijuana Establishment Agents.
935 Mass. Code Reg. 500.801. Suitability Standard for Licensure

Availability of Expungements

  • Expungements:
Yes, Not Automatic

Massachusetts offers record cleaning for offenses which are no longer illegal under state law,  however, the process is not automatic.

Source:

Mass. Ann. Laws Ch. 276, § 100A. Requests to seal files; conditions; application of section; effect of sealing of records
Mass. Ann. Laws Ch. 276, § 100K. Expungement of record based on certain evidence