Minority-Owned Marijuana Business Owners In Mass. Are Being Crushed By The Wait For Licenses

This story is part two of a two-part series about host community agreements in Massachusetts. Read part one here.

Chauncy Spencer is the proud tenant of roughly 10,000 square feet of empty space on Blue Hill Avenue in Mattapan. An old Payless Shoes sign still hangs out front, and inside, bright orange Home Depot buckets catch drops of water from a leaky ceiling.

“Essentially, this is just carpet … and wall,” Spencer said, surveying the space where he hopes to one day open "The 420," his recreational marijuana shop.

Spencer started renting this space for $5,000 per month in April 2018. When he applied for a license to open a pot shop, he said, the state told him he was first in line, and his chances for getting approved were good. He said he thought he would make his rent money back in no time.

“The city spoke the language of economic empowerment,” Spencer said. “And they encouraged us to come into this space.”

Spencer was considered “priority status” by the state because he’s black, he grew up in a Dorchester neighborhood that has been negatively and disproportionately affected by the war on drugs, and in 2003, he was arrested for growing four weed plants in his Danvers apartment and charged with drug trafficking.

Through equity programs put in place by the state, applicants with backgrounds like Spencer's are considered social or economic empowerment candidates, and they were told they could get first dibs to open a marijuana shop. After all Spencer had been through, he said it seemed to him like a kind of justice.

But the law allowed communities to make demands of applicants, and bigger businesses could offer more incentives to cities and towns. And somehow, those big operators seemed to be getting licenses first. Across the whole state, 309 provisional licenses have been awarded to marijuana applicants, according to the Cannabis Control Commission (CCC).

But only 11 total licenses have been given out to the 143 participants of the social equity program and the 122 certified economic empowerment applicants, WGBH News has found.

To operate in Massachusetts, a marijuana business has to sign a contract with the city or town they'll be working in, called a host community agreement (HCA).

A WGBH News review of nearly 500 of these agreements shows that 314 — that’s more than two-thirds — have provided bonuses to the community, like donating tens of thousands of dollars to local charities, beautifying a park, or just making cash payments.

Blake Mensing, a Massachusetts-based attorney who represents marijuana companies, equates this process to extortion. “[Bigger businesses] spend, you know, a couple hundred grand on a fire truck,” Mensing said. “So then, when that town sees a presentation from a mom-and-pop shop, they say, ‘Where's our fire truck?’”

The smaller businesses and the so-called "priority candidates" who have less resources can't compete with these offers. So they wait, while they pay rents and taxes on empty buildings.

Ed DeSousa runs a cannabis cultivator based in Newburyport called River Run Gardens. DeSousa is a part of a network of marijuana businesses and suppliers, and said he's just one of many businesses playing a waiting game with the state.

“I can name five businesses right now that have gone defunct in the waiting period,” DeSousa says. “These people are right now working minimum wage jobs because they took their entire life savings, their 401ks, and they've lost it, they're done.”

The whole process takes time. But marijuana business owners are getting impatient, and complain that there are no solid deadlines.

At a Cannabis Control Commission forum last month, Lewis Andrew Mutty of the Boston-based marijuana advocacy group Beantown Greentown complained about a 90-day review period between the point when the Commission is done reviewing an application to when a license can be granted.

“Why 90 days?” asked Mutty, whose group is waiting for a license for a shop in Lowell and is a social equity participant. “If I murdered someone tomorrow, you could have my background check done overnight."

Cannabis Control Commissioner Shaleen Title said she's heard this before.

"I would say that's the most frequent piece of feedback that we get," Title said. "We hear a lot from businesses who said, 'We're at the end of our rope here. We're going to run out of money. We're going to have to give up.'"

In response, the Commission set up new regulations for priority candidates, which would mean they don't have to get a building, a host community agreement, or the financing to set up a business until after their application is approved.

“We do understand that it's very difficult to be in this process and to be competing with other companies that may not have financial restrictions,” Title said.

But that means applicants like Chauncy Spencer are caught in the middle. While he's still paying rent, the rules are changing for Spencer's competitors.

Spencer just started driving Lyft and Uber. He estimates he can only last a few more months on his current budget. He said the system is failing him.

“I find myself doing more lobbying in the State House and in City Hall than doing my own personal business,” Spencer said.

Other applicants, like Marcus Johnson, say that's just how business works. Johnson is in the process of nailing down three locations for dispensaries in Cambridge, Somerville and Brockton.

“This isn't for the faint of heart,” Johnson said. “This isn't for the broke, frankly. This isn't for the unsophisticated.”

He’s a businessman, and runs a tobacco smoke shop in Roxbury called Kush Groove.

Sitting in the shop, in front of a wall of hoodies and sneakers, pipes and bongs, Johnson said his years of business experience have prepared him for the worst of the marijuana industry.

“It's definitely the wild, wild West,” Johnson said. “It is. You either be the shooter or get shot.”

Johnson is an entrepreneur and an economic empowerment candidate, but he said he sees himself as a businessman first. “I think it's important to ground ourselves in reality,” he said. “This is business, it's capitalism. It's America.”

Johnson said people who were promised a business opportunity by the state still need business savvy, because promises aren't contracts. When asked if he thinks the application process is “fair,” Johnson said he doesn’t know how to respond.

“I don't know if I can answer or qualify what's fair or not,” he said.

The Cambridge native is also an activist — he tries to help other economic and social empowerment candidates in his city by hosting information sessions and helping others out when he can. Johnson, who lost his father when he was 10 years old, said the resonance of his work is personal.

“My father was murdered as a result of the drug war,” Johnson said. “This is part of my life. … It's part of who I am.”

While Johnson works within the system to leverage more power for his community, several other social and economic empowerment candidates will keep appealing to the state to make good on its promise.

“I just decided to use my energy this way, to create my social equity,” Johnson said. “To create my own justice.”

Associate Producer Amanda Beland contributed to this report.