Follow the money in fight over Cambridge pot policy
For all the criticism leveled at Boston’s marijuana licensing process, at least the city is moving forward and approving pot shops, however slowly and haphazardly.
The same cannot be said for neighboring Cambridge. There, two-and-a-half years after voters overwhelmingly approved legalization, officials continue to equivocate and schedule seemingly endless hearings on a system for vetting cannabis companies seeking permission to open recreational stores.
Cambridge’s famously progressive elected leaders are more or less unanimous in their desire to pass an ordinance that’s strong on equity — a licensing scheme giving strong preference to economic empowerment applicants and other disenfranchised entrepreneurs affected by the war on drugs. But nailing down the details and coming up with regulations that pass legal muster has proved elusive.
The latest proposal, from City Councilors Sumbul Siddiqui and Quinton Zondervan, would indeed put Cambridge at the head of the local equity pack. Under its terms, existing Cambridge medical dispensaries Healthy Pharms, Revolutionary Clinics, and Sira Naturals could not open for recreational sales for two years. The idea is to give a more diverse cast of local entrepreneurs and empowerment applicants a window to raise money and build out their shops or cultivation facilities before they have to compete with the big fish.
That, to say the least, didn’t go over well with the three dispensaries.
Starting last week, the companies combined forces to launch what can only be described as an all-out war on the proposal.
With one hand, they proffered a carrot: a so-called “compromise” amendment which would allow the dispensaries to open for recreational sales if they collectively contributed $5 million over four years to a fund that would give grants to empowerment applicants. And to be fair, that’s a big, credible offer. The proposal was submitted by Councilor Denise Simmons at a Thursday meeting of Cambridge’s ordinance committee.
But for that one carrot, there were a dozen sticks.
The biggest is the threat of a lawsuit. The dispensary triumvirate insists that any preferential licensing proposal that excludes them is illegal, under a section of Massachusetts marijuana law that forbids municipalities from enacting any zoning schemes or licensing rules (other than an outright ban on sales by any company) that “prevent” existing medical dispensaries from also opening for recreational sales. “Unreasonably impracticable” restrictions are also not allowed under state law.
The companies argue that the only permissible delay to their permitting is the time it takes a municipality to come up with licensing rules, and that local ordinances can only delay the opening of new, “non-priority” companies. (Existing medical dispensaries automatically go to the front of the Cannabis Control Commission’s license application line.)
To bolster their legal case, the companies recruited state Rep. Mark Cusack, the former co-chairman of the Legislature’s marijuana committee and a key author of the state’s pot laws — and someone who has repeatedly criticized the commission for licensing pot stores too slowly, focusing on unimportant “side” issues, and, in his view, misinterpreting state marijuana law .
Cusack, at the apparent behest of the dispensaries, dashed off a characteristically harsh missive on Thursday to commission Chairman Steve Hoffman, scolding the agency for limiting the number of recreational shops by “allowing” municipalities to prevent dispensaries from going recreational and failing to “inform” cities such as Cambridge that their ordinances would be illegal.
Funny — I didn’t realize it was the commission’s job to police proposed local marijuana policies in all of the state’s 351 municipalities. Almost sounds like a side issue that, along with the thousands of documents Cusack demanded the commission produce within three weeks, could distract the agency from its all-important speedy rollout. Then again, maybe the Cambridge City Council was the actual intended audience of Cusack’s broadside.
The dispensaries didn’t stop there, though. In addition to threatening a lawsuit, they also essentially held a gun to their customers’ heads, saying a two-year delay would be “devastating” to their businesses — and in turn, the patients who rely on the medical cannabis products they sell.
To prove the point, the dispensaries and, um, “allied” advocacy groups bused in dozens of supporters wearing shirts with the word “PATIENT” emblazoned on the front to Thursday’s hearing on the dueling proposals. One after another, they testified that the two-year delay would be unfair to the dispensaries and made them fear losing access to needed medicine. Some appeared to be dispensary workers, or said they were “affiliated” with the dispensaries. (To be fair, this practice is hardly new or limited to one group.)
Helping to rally the troops was Consensus Strategies, a Waltham firm hired by Sira Naturals that specializes in “strategic advocacy services for leading corporate and institutional clients.” Consensus executive Owen Eagan, who several years back was hired by Wynn Resorts to assemble “grassroots” citizens groups that favored the company’s $2.6 billion casino project in Everett, was spotted at the Cambridge hearing.
Besides the testimony from rent-a-protesters and advocates whose groups take dispensary donations, the buy-a-law effort included legendary businessman Marvin Gilmore, a 95-year-old (really!) empowerment applicant who in the 1960s founded a pioneering black-owned bank in Boston. Also testifying on behalf of the compromise was Sieh Samura, aka Chief (who was part of Sira’s accelerator program).
“I think this compromise is really the solution for all the parties involved... and will set a precedent that other municipalities can follow,” Samura said at the hearing. “We can finally fund economic empowerment applicants, bring them into the industry, make the industry stronger, satisfy our patients, [and] allow [dispensaries] to move with priority they’ve been promised.”
Advocates for other empowerment applicants, however, weren’t having it. They argued the white-dominated medical cannabis industry hardly needs any more head-starts. And along with state and local officials, they sharply disputed the basis of the legal threats made by the dispensaries.
Shaleen Title of the Cannabis Control Commission pointed out that the agency’s regulatory guidance explicitly contemplates an exclusivity period for empowerment applicants, and argued that the proposed dispensary delay is a classic example of the “time, place, and manner” powers municipalities have long had over businesses. Cambridge’s city solicitor also officially opined that a delay would be legal. And several advocates I spoke to said the plan amounts to scheduling, not “preventing,” the opening of dispensaries for recreational sales. (My take: fair points, but it’s still a toss-up, legally, and the dispensaries seem fully prepared to sue and make this even more of a mess.)
Equity advocates also took extreme issue with what they saw as an attempt by the dispensaries to drive a wedge in the advocacy community, pitting patients against disenfranchised entrepreneurs. They accused the dispensaries of offering empowerment businesses “a drop in the bucket” or “lunch money” while charging outrageously high prices to the patients they purport to care about before shipping the profits off to out-of-state backers.
Grant Ellis, a disabled medical marijuana patient who has become a prominent dispensary critic, told council members that however well-intentioned, the compromise “should not be so blind as to overlook the blatant conflation of corporate cannabis interests with social equity and economic empowerment applicants.”
“If the two-year moratorium is legal, go forward with the two-year moratorium, and allow the [empowerment] applicants the chance to get a foothold in this industry,” he urged officials.
Ellis added that dispensaries should be required to pledge they will maintain their medical businesses regardless of when they are allowed to expand into recreational sales.
“To do otherwise would be tantamount to putting corporate marijuana interests on a level playing field with economic empowerment and social equity applicants who have suffered for decades at the hands of the drug laws which these existing corporate medical dispensaries are now using to profit every single day while people remain in jail,” he said. “These veiled money interests obtain licenses, sell themselves off to out of state and corporate factions, and undermine the intent of the [state medical marijuana] program to facilitate the profit of people who have no interest... in this process.”
While some equity activists tentatively said the compromise could be workable with more money, most empowerment folks essentially told the Cambridge council: cash alone isn’t enough. For once, they want the same “unfair” advantages that the privileged have always enjoyed. There were, they reminded officials, no equity rules when the medical marijuana program rolled out in Massachusetts. If the dispensaries suffer a little now, they reasoned, well, so what? They’ve already been profiting for years from an unjust system.
“Rich people have enough money,” empowerment applicant Chauncy Spencer implored committee members. “We were chased down, beaten, abused, framed, saw family members [arrested]... We were terrorized. And now we’re trying to be entrepreneurs and come into this space after suffering....
“To have rich folks already operating these dispensaries putting patients against us, trying get into this space, is shameful. It’s absolutely shameful.”
Dispensary executives strongly disputed those demonizing them, with Revolutionary Clinics chief executive Keith Cooper insisting he’s a genuinely local guy who grew up in the area and started different businesses around Boston, and Sira Naturals boss Mike Dundas testifying that his company’s accelerator program proves its commitment to empowerment. (Both companies also pledged to maintain their medical marijuana licenses). They characterized the compromise as exactly that: a win-win.
“I take deep offense at accusations being leveled at our organization that we don’t care about economic empowerment and haven’t done anything for the economic empowerment movement,” Dundas said. “The success of economic empowerment applicants and the success of [dispensaries] is not mutually exclusive. To the contrary, that success can be — and is — interdependent.”
The next step in the fight will be for the full Cambridge City Council to weigh in at a meeting next month. Siddiqui and Zondervan, for their part, are sticking by the delay proposal.
“I 100 percent firmly stand behind this amendment,” Siddiqui said after Simmons offered her dispensary-backed counter-proposal (before curiously disappearing from the hearing). “If we are going to be intentional and serious about repairing the harms of the war on drugs and mass incarceration and inequality and so forth, I think this type of amendment is going to play a role in leveling the playing field.”
So how do we think about all this in the meantime?
Well, it is true that medical-only marijuana businesses in other states have suffered following the advent of recreational sales, and a delay would certainly cost the Cambridge dispensaries. But several industry experts agreed it was downright farcical to suggest that the three larger dispensary companies, which all have other stores in Massachusetts, would give up on their prime (and I mean prime) locations in heavily-populated Cambridge and go out of business within two years if the exclusivity ordinance passes. Sira Naturals, for instance, was just acquired by Canadian conglomerate Cannabis Strategies Acquisition Corp. and is projected to make $90 million in revenue in 2019.
Further, no cannabis consumer in Massachusetts needs to be reminded that the market here has been painfully slow to develop and that the local and state approval processes are long and arduous. It would probably take the better part of the entire exclusivity window for the average empowerment applicant to secure properly zoned property, get funding, and open. It’s not like they’d be making a killing for two years while the dispensaries lost money.
So look — maybe the dispensaries are completely correct that a delay would be illegal and cause a nightmarish tangle of litigation in Cambridge. And maybe their legitimately generous offer to create a new nonprofit that would pay out $5 million ($250,000 a year to each economic empowerment applicant in the city for four years) is the best outcome equity advocates can realistically hope for.
But the show of force they mustered over the last week — from their lawyers’ threats to Cusack’s letter to the extras in the PATIENT T-shirts — seemed less a demonstration of genuine popular support for their “compromise” by Cambridge residents and empowerment applicants than it was a demonstration of the overwhelming resources and connections they can bring to bear on any political or business obstacle.
Therefore, it’s difficult to accept that this is only about protecting patients, who have plenty of options for obtaining cannabis around Cambridge and Boston. No, this is mostly about protecting the bottom line of dispensaries whose investors expect them to expand into the recreational market as quickly as possible.
That doesn’t mean their proposal is a bad idea, nor does it make them evil. But after Thursday’s staged hysterics, it doesn’t exactly make them honest, either.