Jennifer Flanagan: Cannabis reform in Mass. a win-win for industry, state

This month, Gov. Charlie Baker signed into law the first major cannabis reform legislation since Massachusetts established a regulated adult-use cannabis market. It includes several reforms aimed at important issues that have been advocated for over the past five years, which promise to benefit not only the local cannabis industry but the commonwealth as a whole.

Since the passage of Question 4 in 2016, Massachusetts has endeavored to create a well-regulated and sustainable cannabis industry that upholds the intent of the ballot question and protects the public health and safety of consumers and the broader community. While some critics believe the rollout of the adult-use cannabis industry in Massachusetts has been less than ideal, our state has succeeded in its mission. Despite considerable hurdles – the illegal status of cannabis, the quick timeline established, and lack of established best practices, just to name a few – Massachusetts now has a thriving, stable cannabis industry.

I have a rather unique perspective on the matter. I was a state senator when voters approved legalization. I was an inaugural member of the Cannabis Control Commission throughout the implementation process and now work as the director of regulatory policy for the nationally recognized law firm Vicente Sederberg LLP, working with industry members and government officials across the country. I believe the state has done a good job under the circumstance we had to face.

The legislation signed into law this month seeks to close the gap and produce a more equitable and fair cannabis program. It reflects numerous proposals that were brought forward to address key concerns shared by lawmakers, regulators, advocates and industry members alike. Most notably, it addresses some critical issues involving host community agreements and social equity.

The new law substantially brings in line community impact fees that a host municipality can demand from licensed cannabis operators, and it establishes a commission review and approval process for the Host Community Agreements between cannabis businesses and the municipalities in which they are located. Municipalities are also required to adopt policies to promote social equity in the cannabis industry, and financial incentives in the form of additional sales tax revenue will be available for municipalities that host at least one adult-use retail dispensary that qualifies as a social equity business.

The new law also includes a fix to the process by which municipalities can authorize on-site social consumption establishments, which licenses currently available only to commissioner-certified social equity businesses for the first three years.

Notably, a Cannabis Social Equity Trust Fund will be created to provide grants and loans to social equity businesses, which often have less access to investment dollars and financial services. My hope is that current operators will choose to contribute to this fund and assist social equity applicants who are seeking to take advantage of the many opportunities available in the legal cannabis industry but have not previously had access to the necessary capital and technical services. Certain deductions for cannabis business expenses will also now be allowed for state income tax purposes, which will ease the tax burden cannabis businesses endure and further assist social equity businesses to be successful.

Last but certainly not least, the law aims to provide a more streamlined process for expunging cannabis-related criminal records, another commitment to repair the damage caused by cannabis prohibition.

I appreciate the governor and state Legislature taking a meaningful, and thoughtful approach to accomplishing the many initiatives included in this law and would like to thank Governor Baker, Senate President Spilka, Speaker Mariano, Chairman Donahue and Chairwoman Chang-Diaz for their hard work in passing these meaningful reforms before the end of the legislative session. Once the Cannabis Control Commission creates the regulations to fully implement the new law, it will directly benefit individuals who have been disproportionately impacted by the war on drugs.

While it may be too soon to say what the next five years will look like, there is no denying in the last five years Massachusetts has made great strides toward a safe, equitable and successful cannabis industry.

Jennifer Flanagan is director of regulatory policy at Vicente Sederberg LLP. She was one of the first commissioners appointed to the state Cannabis Control Commission, where she served from 2017 to 2021. She previously represented the Worcester and Middlesex District in the state Senate and the 4th Worcester District in the state House of Representatives.