With expanded delivery in play, watch out for crooks targeting equity applicants
After months of hard work by activists who are fighting to expand adult-use delivery and boost opportunities for equity applicants, the Massachusetts Cannabis Control Commission formally opened the public comment period for adult-use delivery regulations last week.
The work, however, is not done; over the coming weeks, it will be imperative for folks to reach out to the CCC via email ([email protected]) to voice support for the existing draft regulations as proposed with a slight change to allow wholesale delivery operators the ability to repackage products before sale (as is currently allowed for brick and mortar retailers who have a limited delivery license).
In critical related news, with the expansion of adult use delivery so close, it is important to highlight the CCC’s formal guidance related to predatory financial investment scams that target equity (EE and SE) applicants. Anyone who is approached to work with “equity funding aggregators,” or in other words, to partner with big cannabis operators (and their financial backers) should always review the guidelines in this document to ensure one is not falling victim to a predatory agreement. Selected quotes from the commission’s handout include:
Predatory investors and scam artists are targeting cannabis entrepreneurs, particularly those eligible for programs such as the Economic Empowerment and Social Equity programs. Our ongoing conversations with other state regulators reveal that this is a concern across many states.
A trustworthy lender, investor, or other business interested in working with your business will take the time to get to know you and to consider the benefits and risks of a partnership, and you should do the same. … Ask questions, and check references. … We recommend consulting with qualified attorneys or other independent professionals before making a final decision and signing any contracts or agreeing to make any payments.
Investors or lenders who only show interest in your status as part of a particular program are not evaluating your business the way that a legitimate investor or lender would. If anyone guarantees you funding without performing due diligence on your company and ability to run a business, you should question whether you want to work with them.
The guidance is extensive—“No one can guarantee you a license”; “Be wary of any business that has abruptly changed its name, industry, or business plan multiple times”; “Be skeptical of resumes and websites whose claims of success in cannabis business sound too good to be true—they probably are.”
That last one may be the most important; if everyone around you sees nothing but green, you may want to play devil’s advocate and start asking some tough questions.