(1)
935
CMR 500.181 is governed by M.G.L. c. 94G
§§ 3 and 4, as amended by St. 2022, c. 180. Pursuant to M.G.L. c. 94G
§ 3, the Commission must establish minimum acceptable standards for Host
Communities to promote and encourage full participation in the regulated
Marijuana industry by people from communities that were disproportionately
harmed by Marijuana prohibition and enforcement and to positively impact those
communities.
(2) M.G.L. c. 94G,
§ 4(a)(xxxi)-(xxxii) empowers the Commission to establish procedures for
municipalities to promote and encourage full participation in the regulated
Marijuana industry during negotiations of HCAs with Social Equity Businesses
and to develop minimum acceptable standards governing HCA negotiations with
Social Equity Businesses. The Commission is further authorized to develop best
practices for HCA negotiations between municipalities and License Applicants
that have been designated as Social Equity Program Participants or Economic
Empowerment Priority Applicants.
(3)
Equity Standards for Host
Communities to Promote and Encourage Full Participation in the Regulated
Marijuana Industry.
(a)
Municipalities are presumed to have met the Commission's minimum acceptable
equity standards for promoting and encouraging full participation in the
regulated Marijuana industry by taking one of the following actions:
1. Adopting an ordinance or bylaw to
exclusively permit Social Equity Businesses for three years or until the goals
of the exclusivity period have been met;
2. Adopting the Model Ordinance or Bylaw
created by the Commission to permit Social Equity Businesses; or
3. Creating a Local Approval Process for
equity applicants that is administered on a 1:1 basis, where a General
Applicant may be approved only after a Social Equity Business has commenced
operations. Host Communities may choose to administer a 1:1 Local Approval
Process until such time as 50% of the Licensees operating in the Host Community
are Social Equity Businesses.
(b) Notwithstanding
935
CMR 500.181(3)(a), a Host
Community shall adopt, but not be limited to, the following transparent
practices to promote and encourage full equity participation:
1. A Host Community shall publicize certain
information in a conspicuous location at its offices and on its website which
shall, at minimum, include:
a. All required
steps of a Host Community's Local Approval Process including, but not limited
to, all associated fees, deadlines, and meeting schedules for local bodies
involved in the Local Approval Process;
b. Identification of key individuals involved
in a Host Community's Local Approval Process, including, but not limited to,
their name, title, business address, and business contact information such as
email address or phone number;
c. A
list of all documentation required by a Host Community's Local Approval
Process, in downloadable form and paper form;
d. Identification of application criteria for
local approval to operate a Marijuana Establishment and scoring methodologies
relied on by a Host Community;
e.
General scoring information for all applicants and a Host Community's scoring
of each individual applicant;
f. A
Host Community's explanation, in narrative form, of its reasoning for the
approval or denial of an application; and
g. Any other information required by the
Commission.
2. A Host
Community shall develop an equity plan to promote and encourage full
participation in the regulated cannabis industry by individuals from
communities disproportionately harmed by cannabis prohibition and enforcement
and shall publicize its equity plan in a conspicuous location at its offices
and on its website. A Host Community's equity plan shall:
a. Encourage applications from business and
individuals that would meet the definition of Social Equity Businesses, Social
Equity Program Participants, and Economic Empowerment Priority Applicants as
determined by the Commission; and
b. Include goals, programs, and measurements
a Host Community will utilize to promote and encourage equity
participation.
3. A Host
Community shall publish data regarding its total applicant pool, which shall
identify each Social Equity Business and License Applicant that has been
designated as a Social Equity Program Participant or Economic Empowerment
Priority Applicant, or who have been pre-verified pursuant to
935
CMR 500.101(7).
4. The Commission may require the Host
Community to report data to the Commission.
(c) A municipality or Host Community shall
adhere to best practices for HCA negotiations with individuals or entities
pre-verified or verified pursuant to
935
CMR 500.101(7), Social
Equity Businesses, and License Applicants that have been designated as Social
Equity Program Participants or Economic Empowerment Priority Applicants
including, but not limited to, the following:
1. A Host Community shall develop a standard
evaluation form, or use a form developed by the Commission, that scores
components of an application. The evaluation form shall include consideration
of equity in the overall evaluation score, which must comprise not less than
25% of the total evaluation score. This equity component shall include:
a. whether an individual, entity, or License
Applicant is pre-verified or verified pursuant to
935
CMR 500.101(7);
b. whether the License Applicant is a Social
Equity Program Participant;
c.
whether the License Applicant is an Economic Empowerment Priority
Applicant;
d. whether a License
Applicant or pre-verified individual or entity has a prior Marijuana-related
criminal offense or conviction;
e.
whether a License Applicant or pre-verified individual or entity is part of an
Area of Disproportionate Impact, as identified by the Commission; or
f. whether a pre-verified individual is of
Black, African American, Hispanic, Latino, Native American or indigenous
descent, or a majority of a pre-verified entity or License Applicant entity is
comprised of individuals that are of Black, African American, Hispanic, Latino,
Native American or indigenous descent.
2. In circumstances where a Host Community
imposes a cap on the number of Marijuana Establishments or MTCs that may obtain
local approval to operate, if a Host Community later decides to allow
additional Marijuana Establishments or MTCs, at least 50% of those licenses,
but no less than one license, above the previously-established cap shall be
reserved for: License Applicants that are Social Equity Businesses; License
Applicants that have been designated as Social Equity Program Participants,
Economic Empowerment Priority Applicants, or both; or individuals or entities
verified or pre-verified pursuant to
935
CMR 500.101(7), including
pre-verified individuals or entities that have already been designated as
Social Equity Businesses, Economic Empowerment Applicants, or both. A Host
Community seeking exemption from this regulatory requirement may submit a
waiver request pursuant to
935
CMR 500.850. Such request must include
identification of proposed compensating features, as provided under
935
CMR
500.850(2)(b).
(d) Host Communities must adopt local rules
or bylaws to comply with
935
CMR 500.181(3) on or before
May 1, 2024. A Host Community shall submit an attestation in a form and manner
determined by the Commission affirming that it has adopted local laws to
effectuate compliance with
935
CMR 500.181(3) and
identifying the specific laws passed. In addition, a Host Community shall
submit its equity plan and any other documentation of its compliance with
935
CMR 500.181(3).
(e) Any interested person may file a
complaint with the Commission alleging noncompliance with an equity requirement
under
935
CMR 500.181. If the Commission substantiates
an allegation of noncompliance with
935
CMR 500.181, a Host Community shall be fined
after first receiving notice and opportunity for corrective action pursuant to
935
CMR 500.310 and
935
CMR 500.320. A Host Community shall be fined
in an amount equal to the annual total of CIFs received from all Marijuana
Establishments and MTCs operating in the Host Community during the prior
calendar year.
1. The Commission shall afford
a Host Community a right to a hearing pursuant to
935
CMR 500.500.
2. All fines collected shall be deposited
into the Cannabis Social Equity Trust Fund established in section 14A of
chapter 94G.
3. The Commission may
identify on its website any municipality or Host Community that has been
assessed a fine for equity noncompliance.
4. Fine assessments pursuant to this section
shall take effect no sooner than May 1, 2025.
(4)
Equity Standards for Host
Communities during HCA Negotiations with Equity Parties.
(a) A Host Community shall prioritize
negotiations of HCAs with equity parties. The equity party to negotiations of
an HCA for an application for licensure is: a License Applicant that is a
Social Equity Business; a License Applicant that has been designated as Social
Equity Program Participants, Economic Empowerment Priority Applicants or both;
or an individual or entity verified or pre-verified pursuant to
935
CMR 500.101(7), including
pre-verified individuals or entities that are not yet a License Applicant but
have already been designated as Social Equity Businesses, Economic Empowerment
Applicants, or both.
(b) A Host
Community may waive or reduce fees for an equity party to an HCA negotiation,
including, but not limited to CIFs, zoning and occupancy fees.
(c)
Required
Practices. At minimum, a municipality or Host Community shall take
the following actions during HCA negotiations with an equity party to promote
and encourage their full participation:
1.
Engage in an ongoing dialogue by providing multiple opportunities for
discussion and negotiation of HCA terms including, at minimum, two conferences
with an equity party;
2. Include
any attorney, authorized representative, or other advocate, if elected by an
equity party, in all negotiation discussions and conferences;
3. Promote language access by providing a
certified interpreter or translator to assist an equity party who is a
Non-English speaker during all negotiation discussions and
conferences;
4. Provide reasonable
opportunities for an equity party to review a proposed HCA, HCA term or
condition outside of a negotiation conference, or to seek review or input by a
third party of their choice.
5.
Negotiate the terms of an HCA in good faith, including consideration of
flexible terms that may mitigate particular challenges affecting an equity
party, such as access to capital, with all terms and clauses conspicuously
identified and openly discussed; and
6. Allow an equity party to propose an
amendment to, or seek cancellation of, an HCA within thirty days from the date
of execution of the HCA.
(d)
Prohibited
Practices.
1. No municipality or
Host Community shall negotiate an HCA with an equity party through the use of
undue influence, duress, coercion, intimidation, threats, or any strong-arm
tactics.
2. No municipality or Host
Community shall threaten loss of an equity party's position in its local
application queue or delay to the processing of an equity party's
application.
3. No municipality or
Host Community shall compel an equity party to sign an HCA in any manner that
conflicts with the practices required in
935
CMR 500.181(4)(c).
4. No municipality or Host Community shall
negotiate or discontinue negotiations with an equity party in bad
faith.
(5)
Equity Standards for Host Communities to Positively Impact
Communities that were Disproportionately Harmed by Marijuana Prohibition and
Enforcement.
(a) A Host
Community must develop a plan to positively impact one or more of the following
communities:
1. Past or present residents of
the geographic "areas of disproportionate impact," which have been defined by
the Commission and identified in its Guidance for Identifying Areas of
Disproportionate Impact. The designation of these areas will be re-evaluated
periodically.
2. State-designated
Economic Empowerment Priority Applicants.
3. State-designated Social Equity Program
participants.
4. Massachusetts
residents who have past drug convictions.
5. Massachusetts residents with parents or
spouses who have drug convictions.
(b) A Host Community shall publicize said
plan in a conspicuous location at its offices and on its website. The plan
shall outline the goals, programs, and measurements the Host Community will
pursue.