Priority-status pot entrepreneurs feeling frustrated

MARCUS WILLIAMS is a black man who grew up and is raising his family in Dorchester. He is passionate about the genetics of cannabis and wants to grow, manufacture, and sell on the legal market. In other words, Williams is the type of entrepreneur that the state’s marijuana law seeks to entice into the legal industry.

But although Williams received priority status as an economic empowerment applicant, he is having trouble getting his business open – which he attributes to the difficulties of negotiating the licensing process.

“It’s really only multi-state operators and big conglomerates that are able to penetrate this massive wall,” Williams said.

Williams is not unique. The economic empowerment program was created to give priority in licensing to individuals from communities disproportionately affected by enforcement of marijuana laws, including racial minorities, people with drug convictions, and those from communities with high drug arrest rates. But of 699 completed license applications submitted to the Cannabis Control Commission so far, only 24 are economic empowerment applicants. Almost none have opened for business.

Despite priority status, applicants say they are stymied by municipal requirements, the state licensing process, and a lack of money. Applicants cannot get bank loans because marijuana remains federally illegal. And communities have more incentive to negotiate with well-funded and well-connected larger companies.

Williams says just getting through the licensing process can cost half a million dollars, between legal costs and the cost of leasing real estate to hold onto a site. “I know a lot of people that spent out of pocket to get to a stage where they’re not even licensed right now, and they’re literally going broke trying to pay people,” Williams said.

The Cannabis Control Commission on Thursday held a listening session for applicants at Union Station in Worcester. The commission called the session after two consecutive public meetings were interrupted by economic empowerment applicants protesting the slow pace of licensing.

“We are committed to continue listening, learning, and acting as necessary,” said commission chairman Steven Hoffman.

Asked about the pace of marijuana licensing in a December interview, Hoffman said commission staff frequently receive incomplete applications and must ask applicants for more information. The commission also has no control over how long it takes municipalities to give their approval. But Hoffman said the commission is working on hiring more licensing staff and becoming more efficient.

Hoffman said Thursday that the commission, just in the last week, hired three new licensing staff.

At the listening session, which was standing-room only, 60 budding marijuana business owners signed up to testify.

One recurring theme was money. Traditional financing options are not available to marijuana businesses because the drug remains federally illegal. Several operators said they had been approached by big companies looking to invest in their company – and take advantage of their priority economic empowerment status – in exchange for a huge ownership stake.

Averyl Andrade, a Westport farmer who wants to grow marijuana, said she got offers from around 15 corporations looking to buy a 49 percent ownership stake in her company, which would leave her with only a small portion of actual control and profits. (Under state law, a single company cannot own more than three licenses of each type, and these types of management contracts have come under scrutiny by regulators.) But she said she is not interested in giving up her company. “We want to support our community, we want to build our company…we want to do it the right way,” Andrade said.

Hans Doherty, vice president of sales for Growing in Health, which wants to sell and transport marijuana in New Bedford, said his group similarly had offers of investment, but “most of the people that came to the table just wanted to take control of our company.”

Cynthia Mompoint said she had an investor working with her on her cannabis manufacturing project in Lowell, until that investor was told it would be illegal to invest. Mompoint has reached out to people tied to her family’s real estate brokerage with little success.

“A lot of them lacked the understanding as to how it is that they can invest in something that they’ve known personally individuals who are in jail…The stigma is so strongly against that,” she said.

Other entrepreneurs detailed problems getting municipal approvals.

Chauncy Spencer, a black man who was incarcerated for a drug offense, received economic empowerment status and hopes to build a cultivation and retail shop in Boston. But he has spent six figures holding on to a property that he first leased in May 2018, while he tries to obtain a license. Spencer said he has not yet been able to receive a host community agreement from the city of Boston.

“All of these other applicants have been moving through the process easily because they had fancy lawyers and they were politically connected,” Spencer said.

But other applicants say business owners must take more responsibility themselves. Jeremy Moon of High Peaks Dispensary in Belchertown received economic empowerment status as a Native American. He says he invested his own money and has worked seven days a week, often until 1 a.m., trying to get his business off the ground.

“We’re not looking for a handout from anybody for anything,” Moon said. “We realize it takes a lot of work to do this. You can’t expect this to drop in your lap.”