The Clubby, Corporate Marijuana Market NY Wants To Avoid Is Right Next Door

Vanessa Jean-Baptiste says she was unable to open a dispensary in Brockton, Massachusetts. "It sucks. But I understand. It's about the big corporations, it's about big pharma, and they want to make money off of this."
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Vanessa Jean-Baptiste says she was unable to open a dispensary in Brockton, Massachusetts. "It sucks. But I understand. It's about the big corporations, it's about big pharma, and they want to make money off of this." courtesy Alyssa Stone / The Enterprise

Recreational marijuana legalization is stalled in both New York and New Jersey—partly because some lawmakers of color say the proposals don’t go far enough in making certain that the communities hit hardest by arrests from illegal drugs aren’t locked out of the newly regulated weed industry.

Across the border in Massachusetts, experts and regulators say that New Yorkers are right to be worried.

Massachusetts was the first state to take social equity into account when crafting its law in 2016. Advocates pointed out that laws making marijuana illegal disproportionately harm people of color and the poor. But legalization didn’t work out the way activists had hoped.

“Massachusetts wanted a strong equity program,” said Jane Allen, a health policy researcher with RTI International who is deeply involved with studying and crafting marijuana policy around the country. “They created strong equity provisions, and yet those haven't translated into the kind of diverse business that we hoped it would.”

The state’s Cannabis Control Commission, a five-person body appointed to work out the details of marijuana policy, is required under the state’s Economic Empowerment provisions to bump applicants up to the front of the line if they meet certain criteria, including if they are people of color or come from areas disproportionately affected by drug prohibition.

The commission has approved more than 110 licenses for marijuana-related businesses since legalization went into effect December of 2016, including dispensaries and grow operations. Yet only nine of those businesses are owned by women, and just two of them are owned by people of color.

“I think it’s pretty clear it’s wealthy, white men who have moved into this space,” Allen said.

Before the state commission even sees an application, a prospective marijuana business owner must obtain the approval of their local municipality. These “community host agreements” permit towns and cities to impose an operating fee on businesses on top of state and local taxes.

The state leaves it open to municipalities to figure out how many of these agreements will be allowed, and they aren’t required to give licenses to economic empowerment candidates. The Cannabis Control Commission can’t give priority to applications they don’t see.

The cost of a successful license application can run into the hundreds of thousands of dollars. On top of that, some applicants sweeten their application by offering tens of thousands of dollars in “donations” to the municipalities or other community groups. Most would-be small business owners can’t raise enough capital quickly enough to compete for the limited number of licenses—especially because bank loans are nearly impossible to get, since marijuana is still illegal at the federal level.

Vanessa Jean-Baptiste, who qualifies for the state’s economic empowerment program, said she raised about a million dollars from investors to open a dispensary in her hometown of Brockton. After finding a location, Jean-Baptiste said she met with a city solicitor, who told her that licenses weren’t available yet but that she was “way ahead of the game” — so she waited a while. After a few more meetings with the city, she learned that she actually needed to sit down and have a conversation with the mayor. By the time Jean-Baptiste secured a meeting, she says he told her that all of Brockton’s community host agreements had already been signed with other businesses.

A report from Brockton’s local paper showed many of the agreements were signed with those with connections to City Hall, including a prominent supporter and financial supporter of the mayor.

“It sucks,” Jean-Baptiste said. “But I understand. It’s about the big corporations, it’s about big pharma, and they want to make money off of this.”

The city of Brockton sent a letter to Gothamist/WNYC saying that the February meeting was the first time the mayor had learned of Jean-Baptiste’s interest in a business, and that the city supports economic empowerment

Though Brockton would not confirm if it has signed any host agreements with Economic Empowerment candidates, the city said in a statement that they are “actively in full support of this goal.”

Gary Lola, center, purchases recreational marijuana at the Cultivate dispensary on the first day of legal sales, in Leicester, Mass. (Steven Senne/AP/Shutterstock)

Shaleen Title, who advocated for pro-legalization legislation and who now sits on the state’s Cannabis Control Commission, said that social equity quickly becomes sidelined as a town deals with legalization issues like zoning, public safety and taxes, which are all fraught with their own nuanced issues regarding social justice.

“We’ve gotten feedback at hearings from municipalities and municipal associations that say, ‘That’s not our mandate,’ and ‘It’s not our concern,’” Title said.

Without the legal teeth to hold municipalities accountable, there isn’t much the state can do.

The Cannabis Control Commission is looking into giving interest-free loans to people of color and women, but nothing has been decided so far. There’s also a state social equity program that provides training and technical assistance. So far, it’s not nearly enough.

The Boston Globe reported last month that multistate operators are slowly taking over Massachusetts’ marijuana industry. State law says that no firm can own more than three shops, but large operators seem to be getting around that by using complex corporate structures. The Globe reports, “Of the 12 recreational shops that have opened so far here, all but two are owned by or have ties to large, out-of-state investors or multistate operators.”

Massachusetts’ equity provisions in their marijuana laws sound very much like what is being proposed in New York and New Jersey, where issues of social justice and equity are presented by lawmakers as one of the main justifications for legalization.

Equity proposals are clearer in New Jersey, where lawmakers were to vote on legalization earlier this month before State Senate President Steve Sweeney pulled a bill at the last minute. New York Governor Andrew Cuomo wanted to include a marijuana bill in the state budget due April 1 but backed off after resistance from lawmakers. Both states are considering creating a state regulatory body tasked with giving priority to prospective business owners that meet certain criteria along racial, gender or geographical lines.

Shaleen Title says New York and New Jersey—and particularly advocates there for people of color—can learn from Massachusetts.

“Communities that don’t feel like they are getting what they want in these laws should be very careful about when they’re willing to offer their endorsements or help passing a law, because maybe it’s better to wait until you have something that you’re comfortable with,” Title said.

For more on this story, listen to reporter Sean Carlson's WNYC segment here:

With reporting contributed by Jennifer Vanasco.

Sean Carlson is a host in the WNYC newsroom. You can find him on Instagram and Twitter @seanecarl.

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