a report from Councillor Sumbul Siddiqui, Chair of the Economic Development and University Relations Committee, for a public hearing held on Wednesday, June 20, 2019 to discuss the potential for a City-based Cannabis Social Equity Program, focusing on ways to reduce barriers to entry in the commercial Cannabis industry

Attachment A Opening remarks Thank you all for attending today's hearing. The Cannabis Control Commission is required by law to ensure that people from communities disproportionately harmed by marijuana law enforcement are included in the new legal marijuana industry. To this end, the CCC has created two programs, Economic Empowerment Priority Review, and the Social Equity Program. While Cambridge is not included in the list of communities most impacted by cannabis law enforcement policies and won't be the focus of Social Equity Programs, there are still steps we can take to make sure this industry will be a benefit to our community. Many cities around the country have equity programs and provisions, and i want to be sure Cambridge reflects the best and most innovative community practices. The central question here is, how does a city create an environment where a new industry can flourish that has both small and larger participants, and ensures full participation by people who have been disproportionately harmed by marijuana prohibition and enforcement? Much of our City Council conversations have centered around location standards, number of establishments. When we talk about equity in the Cannabis industry, we are not talking about making it easier for people to smoke pot. We are talking about making sure the implementation of this law in Cambridge supports the goals articulated in the draft Envision Cambridge recommendations, particularly the goal to provide access to opportunities for all people regardless of differences and our city's commitment to end race-based disparities and achieve racial equity. While we have had already had a number of hearings about Cannabis this term, they have focused on zoning and use regulations and 1 want to take a step back and think about the big picture equity questions that are before us. There is plenty of research that shows how the war on drugs disproportionately punished people of coior for petty crimes, and additional research that shows how few people of color have been able to access opportunities in the new Cannabis industry. This industry is expecting to make $1 billion per year in Massachusetts alone by 2020, and it is incumbent on us that we are cognizant of this history as we think about how to regulate it. Many of the current companies that are part of this market have multi-million dollar facilities. Many of them have willingly embraced equity programs, offering to mentor small businesses (like Sira Naturals' Business Accelerator Program), and shown a willingness to hire employees from diverse backgrounds. This is already a part of the conversation in the burgeoning industry, and I want us to be aware of what is already known to be best practices for municipalities. Additionally, equity programs can help bring the black market above ground, transitioning illegal networks into legal and profitable ones and making it harder for youth to access Cannabis illegally. Today we will hear from Commissioner Shaleen Title, who has been a lead advocate on the Cannabis Control Commission and drafted Massachusetts equity provisions. We will also hear from Khadijah Tribble from the Harvard Kennedy School, and co-founder of the Marijuana Policy

Attachment B City of Cambridge Economic Development & University Relations Committee Public Hearing to Discuss the Potential for a City-based Cannabis Social Equity Program Wednesday, June 20, 2018, 4:00pm, Sullivan Chamber Testimony submitted by: Shaleen Title, Esq Commissioner, Cannabis Control Commissior Shaleen.Title@,Mass.Gov Thank you, Councilor Siddiqui, for the invitation to present today and, broadly, thank you to the ity of Cambridge for being a leader and a role model by proactively having the discussion ‹ annabis and social equity at the municipal leve As a very quick background on my position, last September, after many years in the cannabis movement and industry, and after co-authoring the legalization ballot question, I was jointly appointed by the governor, treasurer, and attorney general to be one of the Cannabis Control Commission members. By law the commission is required to be five people, one person each with expertise in: government regulation, business and finance, public health, public safety, and (in my case) policy and social justice. Our agency is tasked with implementing and administering the Massachusetts adult-use marijuana law, including issuing business licenses. My focus has been on social equity, an area on which the data shows the first legalization states did not focus enough - and I was part of those early efforts - but Massachusetts has taken this lesson to heart and I am confident that with a little luck and collaboration from some leading cities and towns including Cambridge, this is an area in which we are poised to succeed, and I am also confident that this will have wide-ranging implications - other states and even countries have reached out with a desire from learn from our efforts and results on equity, and I think they So l'd like to do today is walk you through what has been done with at the state level to provide some context to set up your conversation about what a local equity program might look like. First - why do we need an equity program? Well, it's very well documented across the country that there have been significant racial disparities in the way that marijuana prohibition has been enforced, and Massachusetts has been no exception. Even recent statistics from 2016 show that 42.2% of those arrested for growing or selling marijuana were black, and the arrest rate of black peopie for marijuana sale or cultivation was seven times higher the rate at which white people were arrested for the same offenses. That's why nearly everyone involved in the drafting and passing of this law felt it was so important to write language that ensured that people of color fully participated in this newly legal industry we were designing. There was a broad consensus in favor of equity among many different communities, activist groups, and state leaders and legislators. The state marijuana law contains an unprecedented mandate. When I wrote that, I thought I would be handing it off to faceless regulators to figure out what that means. But here I am. The mandate says that at the regulating agency shall actively promote participation in the marijuana industry by communities disproportionately harmed by the war on drugs.

So, with the guidance of the law, our excellent advisory board, and most importantly guidance fiom those communities every step of the way, our Commission took three actions: First, we defined communities disproportionately harmed by a transparent process, primarily using a study it commissioned on arrest data around Massachusetts. Our process to designate these areas was open, transparent, and totally objective. The reports as to what data we used and how are public. There are 29 cities that are defined by the report, with certain neighborhoods designated in Boston, Worcester, Springfield and Lowell. Second, we interpreted applicants who qualify for "econ empowerment priority review" as applicants who meet 3 of 6 specific criteria. Applications for that certification ended in April, with 123 applicants meeting that criteria, and if or when those applicants apply for those license, they will move to the front of the line, along with medical dispensaries who get the same benefit. Those six criteria are: 1. Majority of ownership belongs to people who have lived in areas of disproportionate impact for 5 of the last 10 years; 2. Majority of ownership has held one or more previous positions where the primary population served were disproportionately impacted, or where primary responsibilities included economic education, resource provision or empowerment 1o disproportionately impacted individuals or communities; 3. At least 51% of current employees/sub-contractors reside in areas of disproportionate impact and will increase to 75% by first day of business; 4. At least 51% of employees or sub-contractors have drug-related CORI, but are otherwise legally employable in a cannabis-related enterprise: 5. A majority of the ownership is made up of individuals from Black, African American, Hispanic, or Latino descent; 6. Owners can demonstrate significant past experience in or business practices that promote economic empowerment in areas of disproportionate impact. Third, we created an equity program, to be launched this summer, to provide various benefits including technical assistance to applicants and operators who are from disproportionately harmed communities or who have drug convictions or whose parent or spouse has a drug conviction. That program will be run by our Community Outreach Director, Shekia Scott, who will present to the Commission on the details on the program on Tuesday June 26. But in short, the people who qualify will have access to various types of technical assistance based on their skill level and area of interest in the legal marijuana industry and they will have access to fee waivers as well. I want to stress that there's no point in an equity program if the program isn't fair to begin with. It's not meant to be a kiddie table. It's meant to be one tool in a system that is fair and equitable and accessible, and we've kept that in mind throughout the regulatory process. For example, our commission decided not to mandate that applicants raise a certain amount of capital, and our application fees range from just $100 to $600 depending on the license type plus the cost of background checks.

In addition to explicit statutory requirements, we recognized the obvious necessity of giving people of color, women, veterans, small farmers, and individuals with disabilities a chance to participate in this newly legalized, and potentially lucrative field. That -- in addition to the simple fact that it's 2018 -- is why our regulations require all applicants to submit and adhere to a diversity plan to promote racial and gender equity and include veterans and people with disabilities. We created a kind of "extra credit" program to reward non-equity applicants who want to go above and beyond. Companies that donate one percent of their revenue to a technical assistance fund for equity applicants can put a special "social justice leader" seal on their packaging as a signal to conscious consumers who want to support businesses that share their values. We also wanted to encourage innovation and creativity, so we require all applicants to submit a plan for how the business will positively affect communities disproportionately impacted by high rates of arrest and incarceration for drug offenses. Looking at headlines in Massachusetts, there are already applicants experimenting with incubators, career fairs, skills training, and other plans. We also created a variety of pathways for different businesses of different sizes to succeed. Unlike the medical program which is vertically integrated, the adult-use program is made up of separate licenses for cultivation, manufacturing, retail, transportation, research, and testing. We also created licenses for microbusinesses, allowing small cultivators under 5,000 square feet to also manufacture under one license, with a 50% discount on licensing fees. We created co-ops to allow small farmers to pool their resources across multiple locations. The application fees are waived for equity applicants, and we waived the monthly service fees on seed to sale tracking software for equity applicants, microbusinesses, and coops. One of the very first things we did when we were writing this law to be equitable was to ensure that was no cap on licenses at the state level. This is the one most important piece of advice I can give when people ask about how to ensure a program is fair: there should be no cap on the number of licenses. In all my years working on this issue, I've concluded that a cap does nothing for equity and pits otherwise well-intentioned entrepreneurs against each other, incentivizing bad behavior. No one should be referring to licenses as "golden tickets." When you set up a system like that, any equity program is akin to a cosmetic diversity plan you just throw on top of a system of inequity. It has to be fair to begin with. So in Massachusetts, we decided that the state would set no cap and simply deem applicants suitable or unsuitable. But of course cities and towns can set that cap. And that's what really makes you the entity that can make or break of all of this. When I get asked by other states if there's anything I would do differently if I could go back, I tell them only one thing, which is that I wish I have been more thoughtful from the beginning about the opportunities at the local level to be a model of inclusion. But it's not too late. Given that within reason, cities and towns can essentially choose for licenses to be issued locally to whomever you want for whatever reasons you want, there is an extraordinary opportunity for

localities like Cambridge to make this industry look like you want it to look based on your values. So, with that, I thank you again for the invitation to present, and I want to express not just willingness but enthusiasm to work with you at any step. Our staff and our commission is building this equity program from scratch, and we intend to be totally open and transparent about the feedback we're getting and the decisions we are making. So if there's anything we can do to guide you or make the local equity process easier for you, definitely contact me and I hope this will be a collaborative effort. I look forward to listening to the comments from you and your residents. .-—.... …..….

Attachment C ONOMIC DEVELOPMENT & UNIVERSITY RELATIONS COMMITTEE COMMITTEE MEETINGS - AGENDA - 4:00 PM Wednesday, June 20, 2018 Sullivan Chamber Call of the Meeting Cannabis industry in Cambridge. Agenda 4:00 Opening remarks and introductions (Councillor Siddiqui) 4:10 Introduction to MA equity provisions (Commissioner Shaleen Title) 4:30 Models for local and statewide equity programs (Khadijah Tribble) 4:50 Considerations from the Mass Recreational Consumer Council (Kamani Jefferson) 5:00 Responses from City Councillors 5:15 Responses from Community Development Department 5:30 Public Comment 5:55 Final remarks (Councillor Siddiqui) Page 1 City of Cambridge