Grow, Gift, Repair

Despite calls to fund equity efforts, Massachusetts cannabis commission returns millions to state

Marijuana advocates and at least one member of the state’s Cannabis Control Commission have been urging the agency to allot more funding for efforts to increase diversity in the industry. Meanwhile, state data shows that the commission has annually handed millions of dollars of unused funding back into state coffers every year since it was founded.

Last year, the CCC returned 20% of its budget back to the state. While it’s not unusual for an agency to return some unused money back to the state at the end of the fiscal year, in fiscal 2018 and 2019, the commission gave back a higher percentage of its budget than any other state agency, according to a Boston Business Journal analysis of the state’s comptroller data.

During a commission hearing on Thursday, following questions about budget expenditures from the Business Journal, Executive Director Shawn Collins acknowledged that large chunks of the commission’s budget hasn’t been spent every year, but said that’s because the commission is new.

“We’re getting a better sense of what it truly costs to operate and run this agency,” Collins said.

State agencies are required to revert unused money back to the general fund under state finance law. They can, however, reallocate funding within the same fiscal year to other programs. But that hasn’t been done for the commission’s equity program, despite numerous calls from advocates and a former employee as well as several efforts under way on Beacon Hill to redirect more resources to the commission for its equity mission.

A call for more funding

According to state data, in fiscal 2018, the CCC used only a third of its $7 million budget, reverting $2.3 million back to the state and reallocating another $2.5 million in unspent money to a future budget. In fiscal 2019, the commission used about two-thirds of its $13.5 million budget, reverting $2.7 million back to the state, and reallocating $500,000 to a future budget.

For fiscal 2020, which ended June 30, the commission is currently projected to give back $1.7 million of its $14.2 million budget to the state, which would mean the commission is projecting to use 90% of its budget. Vendors have until mid-August to turn in invoices, and that number may change.

Shekia Scott, the former head of the commission’s equity programs, recently told the Business Journal that she repeatedly had asked for more resources to support the commission’s equity mission during her two years at the CCC. She contends that beyond the social-equity program, which provides technical assistance and training to disenfranchised applicants, she needed additional resources to develop other new programs and conduct meaningful outreach into communities harmed by the war on drugs.

“I raised this several times over the two years I was there, that I needed more assistance and a team,” Scott said.

Advocates have also pressed for more funding to go to both the social-equity program and broader cannabis-equity initiatives. During a discussion last month about whether or not to allocate cannabis money to police reform initiatives, Shanel Lindsay, CEO of Ardent Cannabis and co-founder of advocacy group Equal Opportunities Now (EON), said the commission needed to increase funding to its social equity program to promote more diverse participation in the industry.

“The Legislature has not yet funded even the most modest programming pursuant to (the restorative justice goals of the law legalizing recreational marijuana),” Lindsay said. “The Cannabis Control Commission has had to level fund their equity work at just $300,00 a year for the last three years. This translates into absolutely no meaningful support or funding — and you see that reflected in the just abysmal statistics of who gets allowed in and who is excluded from the industry.”

Slow progress

The industry has exhibited slow growth in diversity to date. As of Aug. 6, just 27 of the 570 approved licenses self-identified as minority-owned. Of the 9,164 people licensed to work in the cannabis industry, 74% self-identified as white. Just 5.4% identified as Black.

On Monday, several advocates came out to a public hearing about the commission’s new regulations to decry the progress of the commission’s social equity program.

“I’m just disappointed in what I see as a lack of urgency and empathy for the areas that you deemed disproportionately impacted by the war on drugs,” said Jordan Clark, a participant in the social equity program.

Hillary King, director of wholesale at Northeast Alternatives, said the social equity program was “underfunded,” and said the commission had to do more to promote social justice.

Commissioner Shaleen Title has also pressed repeatedly in recent weeks for Legislative changes that would allocate money to the CCC by directing fines to its equity programs, and pressed again Thursday for the commission to have a conversation about what resources the program may need going forward. While Title does not believe the equity programs have been underfunded to date, she said more resources will be needed to further the program’s growth.

Other commissioners have forcefully pushed back against assertions that resources currently allocated to the commission’s equity mission are not enough. At Thursday’s meeting, Hoffman pointed out the success of the commission’s social equity program, and said other spending had been dedicated to progressing the commission’s equity work, such as salaries of people in the commission conducting outreach or teaching at the social equity program.

“It has somehow become conventional wisdom that the social-equity program is underfunded. … I find this deeply troubling on many levels,” Hoffman said. “When I look at this, I do not see a broken or underperforming program.”