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Social Equity to be Imposed on Communities That Host Cannabis

In July, the Cannabis Control Commission voted to approve edits to revise 935 CMR 500.000: Adult Use of Marijuana and 935 CMR 501.000: Medical Use of Marijuana. One aim of G.L. c. 94G has been to encourage people from communities disproportionately harmed by the prohibition and enforcement of marijuana to benefit by guaranteeing fair, transparent, and equitable access to the regulated cannabis industry. The proposed regulations strengthen that goal by establishing municipal equity requirements. If adopted, the regulations will allow the Commission to oversee Host Community Agreements and Community Impact Fees, among other things. The draft regulations are required to effectuate Chapter 180 of the Acts of 2022: An Act Relative to Equity in the Cannabis Industry, signed by Governor Baker on August 11, 2022 (the “Act”).

Earlier this year, the Commission issued a memorandum requiring Host Communities to adopt initial policies addressing social equity by July 1, 2023. The proposed regulations detail minimum requirements that Host Communities must meet to be in compliance with the regulations.

Notable revisions to the regulations relative to equity include new sections on municipal equity, 935 CMR 500.181 and 935 CMR 501.181: “Minimum Acceptable Equity Standards Governing Municipalities and Host Communities.” Under these sections, a Host Community must develop a plan to promote equity participation, reserve licenses for Social Equity Businesses, donate a minimum of 3% of each Community Impact Fee it receives from Licensees to the Cannabis Social Equity Trust Fund, and adopt local rules or bylaws on social equity by May 1, 2024. Host Communities that fail to comply with the regulations face the imposition of fines and will appear on a published list of communities that are out of compliance.

The Massachusetts Municipal Association and the Massachusetts Municipal Lawyers Association submitted a joint letter commenting on the proposed regulations. We will provide an update once the regulations are finalized.


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