Frank Segall: This is a much more complex industry than people realize—it’s very capital-intensive and it’s highly regulated. There’s a balancing act, in the Commission’s mission statement, between safety and open enterprise. The larger, more national companies have the capital and the expertise, but the state limits the amount of units they can own directly, which creates a certain tension and may lead these operators to question whether they want to be in Massachusetts at all. At the other end of the spectrum, there have clearly been cases of smaller enterprises with no experience that have created problems. Have the regulations been too restrictive?
Commissioner Hoffman: It certainly is a balancing act, you’re absolutely right. And while we’ve tried to get it right, I don’t know that there’s any guarantee that we have. We understand that this is going to take a while, and as the industry rolls out, we may change regulations, alter some of the licensing structure, go back to the legislature and ask for some modifications—things will evolve, and that will happen over time.
But right now, we have very specific legislative mandates with respect to diversity and making sure this industry is populated by women, by veterans, by LGBT people, by minorities. We want it to reflect the diversity of the state of Massachusetts, in terms of employment, but also in terms of equity and ownership and management. There’s also a clause in legislation that ensures that those communities that have been disproportionately impacted by the enforcement of drug laws are full participants in the industry. We take that very seriously.
We have tried to make the licensing process user-friendly, to make it as low a barrier to entry as possible, but we have not relaxed our standards. It is a challenging process, particularly if you don’t have a lot of business experience, to navigate. And once you get through that, you need to be able to run and operate a successful business. So we need, and are working to develop, training and coaching and mentoring programs that help people understand the opportunities the industry presents and successfully complete the licensing process, and that also provide assistance once they’re up and running.
Frankly, though, the much more difficult challenge that we haven’t addressed yet is capital—this is an expensive industry. Even if you’re thinking about opening a small retail store, it’s not trivial in terms of the amount of capital that’s going to be required. We’re seeing a number of different approaches to funding prospective operators in disproportionately impacted communities, led by the private sector.