The Massachusetts House of Representatives overwhelmingly voted on Wednesday to approve a bill amending the state’s weed laws, including significant social equity investments and the addition of cannabis consumption cafes to the state’s roster of regulated pot businesses. Lawmakers in the House voted 153-2 to approve the bill, which is nearly identical to a measure passed by the Massachusetts Senate in April.

House Speaker Ron Mariano issued a statement quoted by the Boston Globe, saying the bill aims “to create a fair and successful cannabis industry, fostering equitable opportunities to those disproportionately impacted by the systemic racism of historic drug policy.”

The bill makes several changes to existing cannabis laws in Massachusetts, where voters approved a ballot measure to legalize cannabis for use by adults in 2016. Since then, recreational pot retailers in the state have sold more than $3 billion in weed products, according to a report from the Massachusetts Cannabis Control Commission that was released the same day the bill was approved in the House.

Adam Fine, a partner with the cannabis law firm Vicente Sederberg, says that the “legislation marks the House of Representatives’ first significant movement on cannabis since adult-use legalization.”

“Components of the bill address some of the concerns that have been identified over the past five years, particularly around social equity, host community agreements and movement towards allowing social consumption sites,” Fine wrote in an email to High Times. “The proposal creates the Social Equity Trust fund for social equity operators and provides a mechanism for money to be raised to help applicants enter the cannabis space.”

New Investments in Social Equity

Under the bill, 20% of the pot taxes collected in the state will be dedicated to investments in cannabis social equity businesses. The share of revenue is higher than the 15% detailed in an earlier version of the bill and double the 10% included in the Senate bill.

The increased funding would be substantial. From July 2021 through April of this year, Massachusetts has collected $124.5 million in recreational cannabis excise taxes. Under the House version of the bill, that amount of revenue would equate to more than $25 million in funding for social equity cannabis businesses in the state.

Under the state’s current social equity program, only 23 of the state’s 253 licensed cannabis businesses are owned by entrepreneurs qualified for the economic empowerment and social equity programs administered by the Cannabis Control Commission. Shanel Lindsay, the co-founder of the advocacy group Equitable Opportunities Now, praised lawmakers in the House for the change and urged senators to retain the higher percentage in a compromise version of the bill.

“Without this funding, our equity goals are just hollow promises,” Lindsay said.

Both versions of the bill require local governments to consider social equity factors when issuing local permits. The House bill also simplifies the expungement process for past weed convictions and arrests by making more offenses eligible for relief. The legislation also directs judges to approve all eligible petitions for expungement, removing much of their discretion to deny requests without explanation.

“We mean it when we say our residents have the right to keep these records from following them around for life,” said state Representative Michael Day.

Massachusetts Bill Reforms Host Community Agreements

Another provision of the legislation would reform the contracts cannabis businesses sign with local governments to obtain local licensing approval known as host community agreements. Cannabis operators and applicants for licenses have argued that community impact fees included in such agreements by local governments exceed the cannabis industry’s negative effects on the community.

Both the Senate and House versions of the bill limit impact fees by requiring local governments to detail any negative impact and set commensurate fees. State regulators would have the authority to reject plans that require excessive payments.

“Without enforcement, we’ve seen some communities push the bounds further than allowed by law, this legislation will make local permitting straightforward and allow more social equity applicants to move through the local process,” said Fine.

The House version ends impact fees once a weed business has been open five years and gives the Cannabis Control Commission 45 days to review local agreements, while the Senate bill allows up to 120 days.

“The municipality literally has the upper hand in these negotiations, and many have used it to a fault,” said state Representative Daniel Donahue. He added that the legislation would help create a “legal, fair, and honest” cannabis industry in Massachusetts.

The Massachusetts Municipal Association of local governments opposed the change, saying the changes to impact fees were a way for cannabis operators to keep more profit for themselves at the expense of local communities.

“The key issues for cities and towns include making certain that the final version of legislation doesn’t interfere with existing host community agreements, and making sure that communities can collect adequate community impact fees going forward,” said Geoff Beckwith, the associate director of the group.

Beckwith added that reducing or eliminating the impact fees “could be a disincentive for additional communities to accept cannabis establishments.”

Massachusetts Cannabis Business Association president David O’Brien praised the changes to the state’s cannabis laws included in the legislation.

“By providing start-up capital, empowering the [cannabis commission] with proper oversight of greedy municipalities, and allowing cannabis operators to deduct normal business expenses,” O’Brien said, “entrepreneurs now will be able to pursue their dreams of starting a small business with fewer barriers in their way.”

Before the legislation can become law, a conference committee will have to rectify the differences between the House and Senate versions of the bill. Both bodies would then have to vote in favor of a final bill before sending it to Governor Charlie Baker for approval.