2 min read January 2024 — The Bay State’s emerging cannabis industry continues breaking sales records, reaching $4.5 billion in gross adult-use sales since sales started in November 2018 through 2Q23. But providing equal opportunities to all communities in Massachusetts to benefit from the commerce of cannabis as well as banking restrictions have been ongoing challenges stakeholders are grappling with.
On Monday, Gov. Maura Healey’s administration appointed Ryan Dominguez, founder and executive director of the Massachusetts Cannabis Coalition and Mass CultivatED, to the Cannabis Social Equity Advisory Board. The board administers the state’s Cannabis Social Equity Trust Fund and Dominguez is expected to play a greater role in promoting entrepreneurship in the cannabis industry, particularly for disenfranchised communities.
“The Cannabis Social Equity Advisory Board plays a critical role in ensuring that communities in Massachusetts that have historically been harmed by marijuana regulations have an equal opportunity to be involved in the cannabis economy,” said Gov. Healey in a press release.
According to the Massachusetts Cannabis Control Commission, state and local revenue from 2018 through 2Q23 reached $912 million, including $150 million directed at municipalities through the host community agreement fees.
The industry has faced increasing pressure as 2023 turned into a buyers market. The average retail price of an ounce of adult-use cannabis dropped 56% from January 2022 ($358.20) to November 2023 ($159.11). The Bay State has also seen fewer out-of-state buyers as neighboring Connecticut, New York and Vermont have legalized marijuana. These difficulties caused 17 marijuana businesses in the state to either lose or return their operating licenses, as cited by MassLive.com. Some businesses have pivoted to focus exclusively on medical marijuana, stepping away from the adult-use market.
Businesses operating in the cannabis industry have also been impacted by banking restrictions, as indicated by market leaders.
“We spent a significant amount of time looking at how to bank the cannabis industry and understanding the considerable compliance, cash handling and physical security requirements involved. We set out to understand our borrowers, planned our anti-money laundering approach, and now provide credit on a multistate level,” said Joseph Campanelli, president and CEO of Needham Bank in an interview for Invest: Boston 2022-2023.
He added, “Only recently did we realize that if you worked at a dispensary or a cannabis related business and your W-2 form came from that, then you could have a difficult time getting a mortgage or car loan because many financial institutions did not recognize it as a qualified source of income.”
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