Massachusetts House, Senate Pass Compromise Bill to Increase Equity in State’s Cannabis Industry

After nearly a month of negotiations, the Massachusetts House and Senate passed a compromise bill July 31 to help increase equity in the state’s cannabis industry, according to The Lowell Sun.

S. 3096 aims to promote greater diversity in the market, increase oversight on host community agreements and establish a framework for municipalities to allow cannabis consumption lounges in their jurisdictions, the news outlet reported.

The legislation, which now heads to the governor’s desk, would set aside 15% of the money in the Marijuana Regulation Fund—which houses the revenue generated from the state’s cannabis excise tax, application and licensing fees, and industry penalties—into a newly created Social Equity Trust Fund, according to The Lowell Sun.

The new fund would provide grants and loans to help those disproportionately impacted by the war on drugs participate in Massachusetts’ cannabis industry, the news outlet reported.

In addition, S. 3096 would grant the Cannabis Control Commission (CCC) the authority to review and approve host community agreements—the contracts that cannabis operators are required to sign with the municipalities they operate in—before the businesses obtain their final licenses, according to The Lowell Sun.

The legislation also clarifies that a community impact fee in a host community agreement cannot exceed 3% of gross sales, the news outlet reported, and mandates that the fee is only permitted for the first eight years that a cannabis business is in operation.

S. 3096 also includes language that allows Massachusetts’ cannabis businesses to deduct ordinary business expenses on their state taxes in an attempt to tackle Section 280E of the federal tax code, according to The Lowell Sun.

The conference committee also opted to create a study on the use of medical cannabis use in schools, the news outlet reported.

The Massachusetts Senate passed its version of the legislation in April, while the House passed its version in May.

Massachusetts Gov. Charlie Baker has indicated that he hoped the bill would clear the Legislature and reach his desk, according to The Lowell Sun.

Sen. Sonia Chang-Diaz, the Senate chair of the Cannabis Policy Committee, told the news outlet that the compromise bill “takes on some of the industry’s biggest issues” and that “it will re-balance the playing field where, so far, wealthy corporations have been able to buy their way through the licensing process and yet, too many local small businesses and Black and brown entrepreneurs have been locked out the of the industry."