“I think it’s bananas that we’re not allowing these retailers to open in a safe and controlled way to serve the needs of the Commonwealth in a time of emergency.”
The state of emergency facing small businesses and the cannabis industry in particular was at the center of a virtual hearing held by the Joint Committee on Community Development and Small Businesses on Tuesday.
Bill S.2643, filed by committee Chair Diana DiZoglio last month, is emergency legislation aimed to create “a Massachusetts Paycheck Protection Program (PPP) for businesses ineligible for the comparable federal PPP.” A public agency would be tasked with developing regulations for the service within 30 days of the bill’s enactment. So far, 15 lawmakers have signed on in support.
The bill itself doesn’t explicitly focus on cannabis. But with the majority of the virtual session being dominated by impassioned and data-rich monologues from the Bay State cannabis and hemp industry, the measure and its potential immediate benefits to qualifying recipients could potentially provide a lifeline in an otherwise morbid business landscape across the state.
On Tuesday, the chorus of testimonies came from a kaleidoscopic mix of local business owners, nonprofit representatives, community activists, and cannabis industry CEOs and leaders. Nearly everyone from the cannabis industry echoed sentiments CCC commissioner Shaleen Title told the national outlet Marijuana Moment one day before the hearing.
“The COVID-19 pandemic, the exclusion of federal emergency relief and the state’s order closing those businesses all threaten the commitments to racial and economic equity that are explicitly integral to the laws that govern our state’s cannabis industry,” Title noted. “This type of state financial support would help Massachusetts to preserve the gains it has made for small businesses.”
In Tuesday’s virtual hearing, state Sen. Sonia Chang-Diaz emphasized that it is well within the reach of the Commonwealth to reopen adult-use cannabis businesses with special conditions (curbside pickup, vigilant procedures, safety for workers and consumers). The cannabis industry, she noted, already operates on par with if not under “greater health restrictions [than] peers in the alcohol and restaurant industry.”
“It would be a revenue generator for communities and the state,” Chang-Diaz said. “As we’re contemplating a supplemental budget to meet the needs of our communities … I think it’s bananas that we’re not allowing these retailers to open in a safe and controlled way to serve the needs of the Commonwealth in a time of emergency.”
The senator added, “It’s a self-inflicted wound that we can cure in the Commonwealth and solve it in an hour of need.”
Chang-Diaz said she and her colleagues are increasingly hearing from consumers and business owners about how unfair the closure of recreational dispensaries is compared to the treatment of liquor stores. If that is a tolerable risk, she said, then adult-use shops would be no different, even if restricted to consumers from Mass.
Massachusetts is the only state in the country with legalized cannabis use and sales to mandate the shutting of all adult-use retail storefronts and businesses, a fact that wasn’t lost on those offering testimony.
There were stories about staff layoffs, burnt sweat equity, and the impact on non-cannabis specific ancillary businesses. Others spoke about the massive loss of tax revenue that normally flows from these businesses into communities and to the state. Local independent business owners chimed in from across the state: Chuck Saba, CEO of beWell, with operations in Merrimack and Lowell; Ellen Rosenfeld, president of family owned and operated CommCan with operations in Medway, Millis, and Southborough; Meg Sanders, co-owner of Canna Provisions in Lee; Caroline Pineau of Stem in Haverhill.
In her turn, Pineau broadcast from her empty retail storefront to underscore the impact that assistance from the bill could provide for a woman-owned business with millions of dollars and several years of work invested.
“I’m relying on this business to support my family,” she said in her testimony. “So I ask you, What do I do? Why do I not matter to this administration? If we continue to remain unable to open or excluded from funding, it will derail an entire industry.”
On that note, Chair DiZoglio clarified: “This PPP bill is needed,” she said, because “we are not allowing these businesses to open with restrictions.”
If the proposed legislation passes, the obvious next issue will be who gets what, and moreover who oversees who gets what. Segun Idowu, executive director for the Black Economic Council of Massachusetts, spoke in support of both bills, but noted that any PPP fund must have a specific designation for minorities.
“More than 90% of businesses in the US did not gain access to these federal PPP programs, so any local PPP program must set aside tools and access to proper paperwork for minority-owned businesses,” Idowu said. “Otherwise, they will be shut out of the process again.”
Idowu cited how one Bay State minority-owned cannabis business opened just before the shutdown order and now isn’t eligible for federal assistance. He also urged the committee to form a tracking task force to ensure any of the PPP assistance for the Commonwealth would in fact go to the businesses and communities that need it most.
David O’Brien, president of the Massachusetts Cannabis Business Association (CBA), represents smaller and emerging cannabis operators and ancillary businesses, many of them minority, woman, or LGBTQ owned. He said that since recreational cannabis businesses are shut out of federal COVID assistance, there is an extraordinary need for the state’s regulatory body to support the bill.
The day after Governor Charlie Baker instituted the stay-at-home order in March, forcing non-essential businesses to close, O’Brien said his team conducted a survey of the state’s cannabis industry, asking what would be the greatest impact on them during closedown.
“The top four answers submitted were layoffs, health concerns for employees and customers, access to capital, and cash flow to cover expenses during that period,” O’Brien said. “I ask to see if [the CCC] will offer a letter to you in support for your PPP legislation. They’re already on record for doing it … I don’t imagine that’s a stretch for them to voice support for an industry they oversee.”
Mitzi Hollenbeck, a former Lakeville selectwoman, is a partner at CPA firm Citrin Cooperman and is the founder and co-leader of the firm’s cannabis practice. She joined others in explaining what’s at stake for a state that’s already going to endure significant financial hardships due to the pandemic.
“Based upon the local revenue, where we have about $600 million in sales since recreational sales became legal … that’s generated about $120 million of revenue that went right into local communities,” Hollenbeck said. “This is essential to local businesses and the Massachusetts economy.”