A communication transmitted from Yi-An Huang, City Manager, relative to Awaiting Report Item Number 24-048, regarding a request which directed City staff to enact policy that will extend the priority period for Social Equity and Equity Empowerment cannabis business applicants

Megan B. Bayer Assistant City Solicitors Paul S. Kawai City Solicitor Sean M. McKendry Diane O. Pires Elliott J. Veloso DECORA First Assistant City Solicitor Kate M. Kleimola Sydney M. Wright Evan C. Bjorklund Franziskus Lepionka Andrea Carrillo-Rhoads Public Records Access Officer Seah Levy CITY OF CAMBRIDGE Office of the City Solicitor 795 Massachusetts Avenue Cambridge, Massachusetts 02139 September 16, 2024 Yi-An Huang City Manager Cambridge City Hall 795 Massachusetts Avenue Cambridge, MA 02139 Re: Council Order 2024 #116 of September 9, 2024, requesting that the City Manager direct the appropriate City staff to enact policy that will extend the priority period for Social Equity and Equity Empowerment cannabis business applicants for a period of six months to one year, or until guidance has been received from the Cannabis Control Commission. Dear Mr. Huang, I am writing in response to the above referenced Council Order that seeks to amend the Cannabis Business Permitting Ordinance (the "Ordinance") Preference Period for an additional six months or a year to allow the City to determine whether the Preference Period, which has been in place for five years, has satisfied the state requirement that municipalities establish policies to promote equity. In August, 2022, an Act Relative to Equity in the Cannabis Industry was signed into law. The law requires host municipalities to establish policies to promote equity in the cannabis industry through various means, all aimed at increasing participation by social equity and economic empowerment applicants. The Cannabis Control Commission promulgated regulations to effectuate the municipal equity requirement in October, 2023, and has recently set up a portal that municipalities will use to attest to compliance with the equity requirements. The City will be submitting its attestation through the portal in the coming weeks, but does not yet have confirmation from the Cannabis Control Commission whether the existence of the Preference Period for the past five years, in conjunction with the other requirements of the Cannabis Business Permitting Ordinance, and the City's cannabis policies and practices, will satisfy the municipal equity requirements. Extending the Preference Period will provide additional time for the City to submit its attestation and hear back from the Cannabis Control Telephone [phone removed] Facsimile [phone removed] 11Y/TTD [phone removed]

Commission, and then determine whether any additional measures are required to be in compliance before the expiration of the Preference Period As it stands currently, the preference period will expire September 23, 2024. The proposed amendment would extend the preference period for six months until March 23, 2025. Additionally, the state Cannabis Control Commission regulations have a preterence period specifically for cannabis delivery licenses and the state's preference period ends on April 1, 2025' , but per the Urdinance, the City will have an additional year of the preterence period tor cannabis business permits for delivery businesses for Group A Priority applicant. The City's additional year of preference period for delivery businesses will last from April 1, 2025 until April 1, 2026. Also, it should be noted that when the Council enacted the Ordinance, it defined Priority Applicants as follows: A. Group A Priority Applicant. An Economic Empowerment Applicant certified as such by the Commonwealth's Cannabis Control Commission; or a Social Equity Program Applicant certified as such by the Commonwealth's Cannabis Control Commission; or Women or Minority Owned business as certified by the Commonwealth and/or by the City; or a Cambridge resident for at least the three previous years prior to application earning less than 50% of Area Median Income (AMI) in the three previous tax years prior to application - to be known as Group A Priority Applicants. B. Group B Priority Applicant. A MTC within the City that was licensed or registered by the Massachusetts Department of Public Health not later than July 1, 2017 to sell cannabis products in a Cannabis Retail Store pursuant to the Commonwealth's medical use of marijuana laws, which seeks to operate as a licensed marijuana retailer pursuant to the Commonwealth's adult use of marijuana laws - to be known as Group B Priority Applicants. Those who qualify as Group B Priority Applicants cannot also qualify as a Group A Priority Applicant. The Ordinance then goes on to state: "The City shall issue a Cannabis Business Permit pursuant to this Chapter only to Priority Applicants." Section 5.50.040. Therefore, even after all preferences period are over, only Group A and Group B Priority Applicants are eligible to receive a Cannabis Business Permit to operate in the City. Attached for the Council's consideration are proposed amendments to Section 5.50.040, Permitting preferences for priority applicants, of the Ordinance. Additionally, attached is a an emergency motion the Council could make if it finds that an emergency exists and it wishes to pass this amendment through all stages of legislation in one meeting. There is a mechanism for the Council to pass an ordinance in one meeting if the Council determines that the proposed ordinance or amendments relate to a special emergency involving the health or safety of the people of the City or their property, and if there are no other statutes or 1 The preference period for state cannabis delivery licenses runs for a 3-year period and commenced the date the first delivery license was issued by the Cannabis Control Commission. 2

ordinances that would prevent passage in one meeting. Pursuant to Rule 20 of the City Council Rules, and G.L. c.43, §22, an ordinance may be passed through all stages of legislation at one session if no member of the City Council objects thereto. Additionally, pursuant to G.L c. 43, §20, the City Council may pass an ordinance on the date on which it is introduced if it orders by a two-thirds vote that the proposed ordinance or amendments relate to a special emergency involving the health or safety of the people of Cambridge or their property. The proposed amendment to the Cannabis Business Permitting Ordinance is not a zoning amendment, which would require compliance with G.L. c.40A, §5, so there are not other statutes or ordinances that would require that a different process be applicable to this proposed amendment. If the Council wants to pass this proposed amendment in one meeting, the Council needs to take two votes; one two-thirds vote to find a special emergency involving the health or safety of the people of Cambridge or their property, and a second majority vote to pass the amendment. Very truly yours, Megan B. Bayer City Solicitor 3