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Cannabis Control Commission considers changes to economic empowerment applicant requirements, whistleblower policy for Mass. marijuana businesses

Massachusetts cannabis regulators on Friday discussed revising a number of regulatory policies, many of which would impact economic empowerment applicants, a license type created to benefit people disproportionately affected by the war on drugs.

Among various topics considered during a virtual meeting of the Cannabis Control Commission for the regulatory policy discussion was to require that marijuana businesses have a code of ethics and whistleblower policy among personnel records.

Commissioner Shaleen Title said a number of employees have told her directly that they’re concerned about retaliation.

“They are already protected under the law but the point of having a code of ethics and a whistleblower policy would be to ensure that information is accessible to the employees and I think by having to go through the process of creating it, it will make the employer more aware of that as well,” Title told reporters following the meeting.

Amid the coronavirus pandemic, the commission reminded employees that they could file complaints with the commission via email if they felt they were working in unsafe conditions.

Much of the conversation Friday focused on equity in the state’s cannabis industry, particularly the social equity and economic empowerment programs. The meeting fell on Juneteenth, which commemorates the end of slavery in the United States.

Economic empowerment status was created to offer a prioritized review and licensing for people disproportionately affected by the war on drugs or those in communities disproportionately impacted by high rates of incarceration and arrest for marijuana offenses. The social equity program is a free technical assistance and training program.

For economic empowerment applicants, commissioners weighed whether or not to allow a reduction of ownership by target community members, or those people intended to benefit from economic empowerment status, from at least 51% down to 33% so long as target community members retain control and receive a certain amount of economic benefit. A reduction could mean more flexibility to obtain capital, something that has been a struggle for equity applicants.

“I believe that we should not dictate to applicants and to entrepreneurs how they run their business as long as they adhere to our regulations,” CCC Chair Steven Hoffman said. “My basic belief is that we should be both providing more flexibility to people in terms of how they structure their finances and we should not be telling them how to do it.”

Title agreed with Hoffman but said she’d only be ok with moving the threshold down to 33% ownership as long as economic empowerment applicants maintained control of the company. However, commissioners Britte McBride and Jennifer Flanagan wanted to keep the threshold at 51%.

“I think it’s extraordinarily important that we are promoting minority ownership of businesses,” McBride said.

With opinions in a tie, the commission invited public comment from those who may want to see that threshold change.

“If we get feedback that people are hamstrung from being able to attract investors and there’s a rationale for doing that I think we should be open to that,” McBride said. “My hesitancy with that is really just based on wanting to make sure that we are promoting as much as we can the majority minority ownership in businesses.”

During the roughly four-hour meeting, the commission discussed a range of topics for which they may revise regulations. In addition to issues of equity, the commission talked about delivery licenses, testing, vaping regulations, research licenses and more. The commission did not make any final decisions Friday. The next steps include more discussion, votes, finalizing draft regulations and a public comment period.

Commissioners Title, McBride and Flanagan noted that they are in support of amending the social equity regulation to state that the commission may by vote expand the categories of people eligible to participate in the social equity program, like veterans, for example.

Title said she wanted to make sure any changes were based on data and noted there has only been one cohort of the social equity program thus far.

Hoffman said he would support no change to the current regulation, but that he was open-minded on the topic.

“I think it’s early in the evolution of the social equity program and I want to make sure, at least my opinion is that we need to keep it focused,” Hoffman said.

The commissioners also signaled their support of expanding eligibility to participate in the social equity program to economic empowerment applicants. Many economic empowerment applicants are already participating in the social equity program, but this change would streamline the process and give those applicants access to resources, tools and mentorship.