The Commission seeks to support municipalities in establishing fair, transparent, and equitable licensing processes for marijuana businesses at the local level in accordance with state law. The agency is required by Massachusetts General Laws chapter (“G.L. c.”) 94G §4(a½)(iv) to (1) establish procedures and policies to promote and encourage full participation in the regulated marijuana industry by people from communities that have previously been disproportionately harmed by marijuana prohibition and enforcement and (2) to positively impact those communities.

Host Communities are required to create and adhere to the following plans and policies:

1. Equity Standards for Host Communities to Promote Full Participation in the Regulated Marijuana Industry;
2. Equity Standards for Host Communities during Host Community Agreement (HCA) Negotiations with Equity Parties; and
3. Equity Standards for Host Communities to Positively Impact Communities Disproportionately Harmed by Marijuana Prohibition and Enforcement.

To comply with these requirements, a Host Community must publicize the above equity related policies and plans, as well as information about its transparent practices to promote and encourage full equity participation in the regulated marijuana industry pursuant to 935 Code Mass. Regs. (“CMR”) §§500.181(3)(b) and 501.181 (3)(b) in a publicly accessible conspicuous location at its offices and on its website.

Given the unique opportunity to build a large and lucrative industry, the Commission encourages municipalities to build the licensee selection process in a way that prioritizes the community’s individual needs and the Commonwealth’s commitment to an equitable industry and to economic justice.

Host Community Municipal Equity Notification Application

Municipalities are required to notify the Commission of their equity policies and plans. The Commission has developed an application for Host Communities to use through the online Massachusetts Cannabis Industry Portal (MassCIP). Tutorials for registering for MassCIP and technical assistance are available on the Commission’s website.

To complete the notification application, the following information will be needed:

• Name and contact information of the municipality and its authorized municipal representative;
• The Host Community’s actions taken to meet the Commission’s minimum municipal equity standards, accompanied by supporting documentation;
• Documentation of transparent practices developed by the municipality which can include, but is not limited to, the following:
  • A photo of the information publicized in a conspicuous location within the municipality’s office;
  • A PDF document with a link to the municipality’s website displaying the required information; and
  • A digital copy of the Municipality’s transparent practices.
• The Host Community’s Equity Plan;
• Local municipal data questions; and
• Host Community attestations.

All supporting documentation uploaded to MassCIP should be in one of the following formats and should not exceed 4MB per file: PDF, JPEG, JPG, PNG, GIF.

Equity Standards for Host Communities to Promote and Encourage Full Participation in the Regulated Marijuana Industry

Host Communities must adopt local rules or bylaws to comply with 935 CMR §§500.181(3) and 501.181(3) that include equity standards to promote and encourage full participation in the Regulated Marijuana Industry on or before May 1, 2024.

On or before May 1, 2024, a Host Community shall submit an attestation to the Commission affirming it has adopted local laws to effectuate compliance, identifying the specific laws passed. Additionally, the Host Community must submit its equity plan and any other documentation of its compliance with 935 CMR §§500.181(3) and 501.181(3).

A Host Community shall develop a municipal equity plan to encourage full participation in the regulated marijuana industry. The equity plan shall:

• Encourage applications from businesses and individuals that would meet the definition of Social Equity Businesses, Social Equity Program (SEP) Participants, and Economic Empowerment Priority Applicants (EEA) as determined by the Commission;
• Include goals, programs, and measurements a Host Community will utilize to promote and encourage equity participation;
• Consistently publish data regarding the total applicant pool for Marijuana Establishments (MEs), identifying each Social Equity Business and License Applicant that has been designated an SEP Participant or EEA, or who have been pre-verified as a Social Equity Business.

Pursuant to 935 CMR §§500.181(3)(a) and 501.181(3)(a), municipalities are presumed to have met the Commission’s minimum acceptable equity standards by taking at least 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.

Transparent Practices to Promote and Encourage Participation

Host Communities are encouraged to build their licensee selection process in a way that prioritizes the community’s individual needs and the Commonwealth’s commitment to an equitable industry and economic justice. To promote and encourage full participation, under 935 CMR §§500.181(3)(b) and 501.181(3)(b), Host Communities must adopt transparent practices when establishing their framework. The requisite transparent practices shall include, but are not limited to:

• Publicizing certain information in a public location at its offices and on its website which at a minimum shall include:
  • 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;
  • Identification of key individuals involved in a Host Community’s Local Approval Process, including, but not limited to, their names, titles, business addresses, and business contact information (such as email addresses or phone numbers);
  • A list of all documentation required by a Host Community’s Local Approval Process, in downloadable form and paper form;
  • Identification of application criteria for local approval to operate an ME and scoring methodologies relied on by a Host Community;
  • General scoring information for all applicants and a Host Community’s scoring of each individual applicant;
  • A Host Community’s explanation, in narrative form, of its reasoning for the approval or denial of an application; and
  • Any other information required by the Commission.

Equity Standards for Host Communities during HCA Negotiations with Equity Parties

Under 935 CMR §§500.181(4)(a) and 501.181(4)(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 can be (a)a License Applicant that is a Social Equity Business, (b) a License Applicant that has been designated as an SEP Participant and/or an Economic Empowerment Priority Applicant, or (c) 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 a Social Equity Business and/or Economic Empowerment Applicant. A Host Community may waive or reduce fees for an equity party to an HCA negotiation, including, but not limited to Community Impact Fees (CIFs), zoning and occupancy fees.

Required Practices During HCA Negotiations with Equity Parties

At minimum, the regulations under 935 CMR §§500.181(4)(c) and 501.181(4)(c) require that 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 selected 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; all terms and clauses must be 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.

Prohibited Practices During HCA Negotiations with Equity Parties

Please be aware that the regulations under 935 CMR §§500.181(4)(d) and 501.181(4)(d), specifically prohibit the following:

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 the processing of an equity party’s application.
3. No municipality or Host Community shall compel an equity party to sign a HCA in any manner that conflicts with the practices required in 935 CMR §§500.181(4)(c) or 501.181(4)(c).
4. No municipality or Host Community shall negotiate or discontinue negotiations with an equity party in bad faith.

Equity Standards for Host Communities to Positively Impact Communities that were Disproportionately Harmed by Marijuana Prohibition and Enforcement

As required under 935 CMR §§500.181(5) and 501.181(5), Host Communities must develop a plan to positively impact one or more of the below communities. This plan is unique to each Host Community, and it shall outline the goals, programs, and measurements the Host Community will pursue to impact one or more of the following communities:

1. Past or present residents of the geographic Disproportionately Impacted Areas (DIAs), 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 EEAs.
3. State-designated SEP participants.
4. Massachusetts residents who have past drug convictions.
5. Massachusetts residents with parents or spouses who have drug convictions.

Below is a list of additional recommendations from the Guidance document, the Commission’s regulations, and resources from other jurisdictions nationwide that municipalities may take under advisement in crafting their equity standards and transparent practices.

Municipalities Should Consider Allowing Various Types of Businesses

The Commission created a wide variety of license types, all authorized under state law, to encourage the participation of businesses of all sizes. Each license type involves distinct areas of business operations that create jobs in distinct fields. Municipalities that want to encourage development of small businesses may want to consider what type of licenses they wish to allow within the community, such as microbusinesses, craft cooperatives or other cultivators and manufacturers, that agree to operate on a limited scale. The Commission recommends that community leaders attend an applicant’s community outreach meeting, where residents and municipal officials may raise specific concerns. Applicants may then take the opportunity to address those concerns and move forward to negotiate a host community agreement and otherwise progress through a local selection process.

Zoning Considerations

Communities should give serious consideration to zoning marijuana businesses based on the nature of their primary business operations. For example, M.G.L. c. 94G §5(b)(3) establishes a 500-foot buffer around K-12 schools, but a municipality may choose to reduce the size of that buffer. The Commission advises communities against acting arbitrarily when considering additional buffer zones or separation requirements.

Host Community Agreements

Once a community establishes zoning and a local licensing process, if it chooses to do so, the Commission recommends that municipalities clearly identify the local permits and license required to operate MEs and Medical Marijuana Treatment Centers (MTCs). It is also recommended that municipalities clearly identify the process for initiating negotiations of an HCA and a timeline for completion of those negotiations, with deadlines for both the applicant and the municipality. If there are any differences in processing or timelines for equity parties, this information should also clearly identify this information.

Selection Process

The Commission recommends that municipalities alternate signing HCAs with EEAs and non-EEAs. In deciding which companies each municipality chooses to negotiate an HCA with, the Commission recommends instituting an objective, transparent selection process intentionally focused on repairing past inequities, beginning with prioritizing review for state-designated EEAs. The Commission further recommends that municipalities consider preferences for applicants that are designated as (1) a Social Equity Business, (2) a Social Equity Program Participant, and/or (3) an Economic Empowerment Priority Applicant, or (4) an individual or entity verified or pre-verified pursuant to 935 CMR §§500.101(7) or 501.101(4); this includes 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, or applications from companies owned by marginalized groups. As part of the selection process, consider evaluating the company’s diversity plan and plan to positively impact communities disproportionately harmed, either in the municipality or generally.

The Commission urges an exploration of the following topics and questions about municipal equity, transparent practices, and access related resources: