Further heightening tensions is that well-capitalized businesses are often owned by white, predominantly male, entrepreneurs, which some advocates see as taking opportunities away from minorities and women. “The fact is these are well-capitalized millionaires coming into the state, whereas some mom and pop shops in the illicit market won’t even be able to go legit because they will be locked out because of differences in capital,” said Kamani Jefferson, a spokesman for the Massachusetts Recreational Consumer Council.
Since recreational marijuana was legalized in Massachusetts in 2016, many industry gatherings include a quiet grumbling about the number of “new faces” showing up around the state. Divisions on how to make the industry open and accessible to all entrepreneurs have only deepened as the state has struggled to bring people who have been disenfranchised by the war on drugs into the nascent industry. Of the 112 applications submitted to the state for marijuana establishments, only three have so far come from applicants awarded so-called “economic empowerment” status, a status awarded to early applicants who are from an area disenfranchised by earlier drug laws.
State data shows that most of the economic opportunity has gone to companies that are already working in the industry. For example, of the 24 provisional licenses awarded thus far by the state, not one has gone to a microbusiness, co-op, or farmer — industries geared toward small-business owners. Additionally, not one provisional license is currently held by a woman-, minority- or veteran-owned business.
At the root of the issue is capital, Jefferson said, and people with past criminal records from the war on drugs — which data shows disproportionately targets the black community— aren’t likely to have that capital, Jefferson said. “You need money and real estate to get into the space, and there is only so much of that to go around,” he said.
Raising money is traditionally easier for white males than it is for people of color, Jefferson added, which is a problem when venture capital and private equity investment is one of the few means to raise money for a marijuana business.
The result is that advocates and minority groups who used to work in the illicit market are being pushed aside for licenses by businesses that have the capital now.
“I think there is a tension between those who want a build an industry where there is room for businesses of all sizes (which is not only possible, the law requires it) and those who feel more comfortable with it looking like every other industry, just with a kiddie table on the side offering scraps to small businesses,” wrote Shaleen Title, one of five Cannabis Control Commission members, in a message to the Business Journal.
Though it is still early, she said the commission is trying to look at the data to identify the barriers to entry and address them. Though the commission voted against Title’s provision to have the state more closely monitor contracts between marijuana businesses and towns that charge them money, Title said there were other ways the commission could try to level the playing field moving forward. “The community is not going to settle for scraps,” she said. “They want the fair shot in the form of an industry with policies and procedures supporting small businesses and owners of all backgrounds — that, again, the law requires.”