Boston City Council approves sweeping changes to marijuana licensing

Kim Janey spoke during a forum in 2017.Aram Boghosian for The Boston Globe

The Boston City Council has approved sweeping reforms to the city’s process for licensing marijuana facilities, with elected officials hailing the legislation as a model that will boost the prospects of smaller, local companies with diverse owners — especially those from communities of color that were hit hardest by arrests amid the war on drugs.

Wednesday’s 12-1 council vote sends the proposal by Councilor Kim Janey to the desk of Mayor Martin J. Walsh, who helped negotiate the final version of the ordinance and said he will sign it. Councilor Althea Garrison cast the lone opposing vote.

“This is an important win for the city of Boston,” Janey said in an interview following the council’s meeting. “We are creating a process where there will be much more intention and focus on equity, and where there will be more clarity, more transparency, and more accountability. It is game-changing.”

Under the plan, Walsh will create a new “Boston Cannabis Board” to publicly evaluate and vote on license applications from cannabis companies, using a set of clearly delineated and weighted criteria: a diversity and inclusion plan for hiring and pay practices (worth 25 percent), an employment plan (worth 20 percent), community support (worth 20 percent), location, safety, and security (worth 20 percent), and parking and transportation (worth 15 percent).

That’s a major change from the current system, under which Walsh officials decide behind closed doors which firms receive coveted “host community agreements,” which are required to win a state marijuana business license, based on a list of broad criteria.

A number of applicants had complained that the current process is opaque and subjective, and gives an unfair advantage to politically connected operators — though Walsh officials counter that the 14 applicants to receive host community agreements so far are diverse in size and ownership, and that the city is doing its best to strike a tricky balance between neighborhood feedback, equity, and picking qualified operators.

The new cannabis board’s size and membership have yet to be determined; Janey said she expects Walsh to issue an executive order creating the body within weeks.

Walsh’s support of the measure is striking. For one thing, it effectively reduces his unilateral power over the process of picking Boston’s pot companies. And, while he has long pledged to dutifully implement the law, the mayor was a vocal opponent of marijuana legalization in 2016.

Today, Walsh says he is concerned about how the former prohibition on the drug was enforced.

“Together, we will ensure those who have been impacted hardest by the War on Drugs can benefit most from this new economic opportunity,” Walsh said in a statement, adding that his administration has always “worked to ensure the process is fair, transparent, and equitable for all.”

Janey’s ordinance would also establish an equity program offering technical assistance and training for entrepreneurs who were arrested in the past for marijuana crimes, or belong to groups or communities disproportionately targeted by police enforcing the prohibition of cannabis. The program would be funded with as much as $5 million in fees charged to marijuana operators over the next five years.

The city under the new plan will be required to approve equal or greater numbers of equity-program participants compared to other applicants, a provision Janey said would ensure fairness and a place for the disenfranchised in the burgeoning marijuana sector.

Another section of the new legislation calls for the city to publish a registry of marijuana applicants and their proposed locations. That will make it easier for entrepreneurs to know whether other companies are competing for approval in the same area — a key piece of business information, since the city mandates a half-mile buffer between every marijuana facility.

And finally, Janey’s plan will force companies to provide extensive disclosures about their true owners and who holds effective control over operations. That’s a response to revelations earlier this year that a number of out-of-state, investor-backed pot conglomerates were essentially recruiting local minorities to stand in as straw applicants on their behalf.

“This ordinance requires greater scrutiny of applicants so we know who the owners are and who the investors are and anyone with equity or a controlling interest in the company,” Janey explained at Wednesday’s council meeting. “We are requiring full disclosure so we can make sure that larger companies are not enlisting people of color to be the face of the company without any power or ownership.”

Some of those who would qualify as equity applicants under Janey’s ordinance opposed the plan, saying it didn’t give sufficient recognition to those enrolled in the state Cannabis Control Commission’s similar economic empowerment program. They called for a return to an earlier version of the measure that would have granted an exclusivity period to such applicants, and protested outside City Hall Wednesday in advance of the council meeting.

But assurances from the city that all current applicants will be subject to the new rules — meaning existing applicants who aren’t part of the equity program won’t have an advantage — helped mollify some critics.

“I feel optimistic,” said Chauncy Spencer, an economic empowerment applicant trying to open a cannabis shop in Mattapan who had expressed concerns about the final version of Janey’s ordinance. “We still need to work some things. I’d like to see the buffer zone waived for empowerment applicants, and I’m worried about the makeup of the board — is it going to be stacked with prohibitionists? We want to have some input on that, and on how the training is set up. But overall, I’m happy.”

Janey at the meeting had batted away criticism, saying the deal represents major concessions by Walsh and is a huge — if imperfect — step forward.

“It’s important we don’t pit one group against another and play the ‘oppression Olympics’ ” Janey said. “I want all of them to win.”

Shaleen Title of the state Cannabis Control Commission, a key architect of the state’s marijuana equity laws and regulations, said the passage of Janey’s ordinance was a historic step forward in efforts by regulators to ensure the cannabis business is equitable.

“Boston set a new national standard today in terms of a fair and consistent standard for the local process, which was sorely needed,” Title told reporters following the vote. “They listened to the applicants who have been struggling. . . and they addressed their challenges head-on.”