Black entrepreneurs say they are losing hope that owners of Massachusetts marijuana businesses will look any more diverse than the rest of corporate America, despite the state’s first-in-the nation requirement that the industry include groups hardest hit by the war on drugs.
Only two of 184 marijuana business licenses in Massachusetts are owned by people in the state’s social equity programs, which include minorities, people with drug records, and those from areas with high numbers of pot arrests. One is a black man from Boston; the other, a white woman whose husband had a drug charge.
“The window is closing every day — they need to stop what they’re doing and rewrite the script,” said Shannon Jones, 34, an entrepreneur from Marlborough in the state’s economic empowerment program for cannabis, who hopes to open a pot cafe. “Our ancestors, as black and brown people, would laugh at the fact that we put trust and faith in the government to want to help us.”
While the state has taken steps to reach the voters’ social justice goals, cities and towns wield enormous power in determining who gets to profit from the booming industry, which has raked in $260 million since shops opened in November. Local governments determine who receives a “host community agreement,” required as a first step for a marijuana license.
No one tracks how many applicants for local approvals are minorities, but only 4.6 percent of the businesses applying for state pot licenses registered as minority-owned.
As a black entrepreneur with a marijuana record from Brockton, Ian Woods, 28, thought he was precisely the type of person Massachusetts wanted to help open a cannabis store after the state legalized recreational use of the drug nearly three years ago, with a social justice mandate.
Brockton is one of the cities most ravaged by pot arrests. Yet Woods said he visited City Hall for months seeking approval, and he said he never received a call back. The mayor, meanwhile, approved 10 wealthier companies largely owned by white men, citing their prospects for viability as a key factor.
“It was a good idea,” Woods said of the state’s plan, “but it’s a failed program as long as they give the cities full power.”
The state is struggling to meet its goals for a variety of reasons. Many cities and towns haven’t prioritized social equity. Businesses owned by social equity applicants face challenges raising capital and navigating local approvals, while competing with well-funded companies with expensive lobbyists and consultants. And many cities and towns are dragging their feet in defining their pot application process and approving businesses, making it hard for entrepreneurs without deep pockets to wait it out.
Banks aren’t lending because pot is illegal under federal law. And only 1 percent of venture capital investments go to black startup founders, one analysis found. Lawmakers declined to approve a measure, requested by the state Cannabis Control Commission, to establish no-interest loans issued by the state for disadvantaged entrepreneurs. Senator Sonia Chang-Díaz plans to refile it.
Once lauded by progressives, Massachusetts’ marijuana law is now seen as an example of what not to do, with one New York website describing it as “The Clubby, Corporate Marijuana Market NY Wants To Avoid.”
“We strut around with our chests out like, ‘We’re the first state to do equity,’ but it’s far from being the vision that we thought it was going to be,” said Horace Small, of the Union of Minority Neighborhoods.
Scholars say Massachusetts’ equity goals are worthy, but the state needs to be bolder in combating deep-rooted societal inequities. Black people in Massachusetts were 3.3 times more likely than whites to be arrested for marijuana possession in 2014, despite similar consumption rates, according to the American Civil Liberties Union. And a 2015 report found the median net worth for black families in Boston was just $8 compared to $247,500 for whites.
“The state and the local government have to be really clear that they know they’ve disadvantaged this group, and as a result, this group may not have those [capital] requirements, so we’re going to give you a leg up,” said Carl Hart, a Columbia University professor who studies drugs and race. “If they don’t do that, it’s kind of a joke.”
To level the playing field, the cannabis commission runs two programs.
The commission’s economic empowerment effort, with 123 potential applicants, offers a faster licensing process for eligible minorities, people with drug records, residents of areas with high pot arrests, and those pledging to hire from those areas.
The social equity program, meanwhile, has barely begun due to delays in selecting trainers, but it will provide participants with training and mentorship. So far, 143 people have been accepted into the program. It’s open to low-income people from areas with high rates of pot arrests, locals with drug records, or locals with a spouse or parent with a drug conviction.
The state has also proposed funneling all delivery and cannabis cafe licenses to small businesses and people in the social equity programs.
“We’re nowhere near where we need to be, but we’re doing a lot,” said Steven Hoffman, chairman of the Cannabis Commission. “We need some help from the state [Legislature] and the municipalities and from private industry — and I’m confident that’s all going to come together — but it takes time, and it’s hard.”
Boston and Cambridge are debating whether to grant smaller, locally owned businesses and those with equity status exclusive access to their cities for two years. In Cambridge, medical marijuana dispensaries are fighting that initiative. Somerville passed an ordinance requiring that, for every pot business approved for a non-equity company, an equity company must also move forward. Neither Cambridge nor Somerville has approved any cannabis shops yet.
Equity entrepreneurs say these efforts are helpful, but it’s still a challenge to compete because officials are moving slowly and, amid the uncertainty, would-be pot shop proprietors have to pay for the storefronts where they’re hoping to do business.
“A lot of equity applicants across the state are in this limbo waiting — you’re paying rent, you have no idea when it’ll end or what it’s going to look like,” said Kobie Evans, 47, the first economic empowerment applicant to win a preliminary license, for a store in Dorchester. Since January, he said, he has paid $5,500 monthly rent for a planned shop in Medford but has struggled to advance in the city’s approval process.
Medford officials said the city hasn’t approved anyone but hoped to promote social equity.
Cities and towns do want diverse business ownership, but they also have to consider applicants’ access to capital and business experience because they want viable companies, said Geoff Beckwith, of the Massachusetts Municipal Association.
Those requirements, however, can feel to equity applicants like a sign saying: Not welcome.
Brockton, one of the state’s most diverse cities, also had one of the highest marijuana arrest rates. But two local black entrepreneurs, Woods and Vanessa Jean-Baptiste, said then-Mayor Bill Carpenter ignored their meeting requests for seven months and quietly signed host agreements with better funded, more connected companies.
Carpenter said at the time that Jean-Baptiste did not request a meeting until it was too late and that he picked businesses that seemed viable, but his choices frustrated his diversity commission.
“This is our social justice reparations,” said chairman Tony Branch.
Carpenter died in July. Councilor Moises Rodrigues became mayor and reopened applications only for equity entrepreneurs because he felt they deserved a chance. Woods and Jean-Baptiste applied.
“To have this opportunity, it’s just the right thing to do,” said Jean-Baptiste, 28. “The [racial] wealth gap alone is ridiculous, and the war on drugs played a big role in that.”
For now, Jones, the Marlborough entrepreneur, refuses to visit a pot store.
“None of the current dispensaries represent the people that I want to support,” she said, “which are my people.”