MA’s Cannabis Control Commission Chair Troubled By Predatory Financing Deals
Deals that include things like forced sales once the exclusivity period has ended
The chairman of the Cannabis Control Commission raised concerns Thursday with what he said are “predatory financing deals” being offered to entrepreneurs and businesses from communities disproportionately harmed by the decades of marijuana prohibition and renewed the agency’s call for the Legislature to make an alternate funding source available.
As he opened Thursday’s meeting, Chairman Steven Hoffman noted that commissioners would be considering two delivery courier and seven delivery operator applications, license types that are currently available exclusively to participants in the CCC’s social equity program and economic empowerment applicants.
Though he was pleased to see “such momentum” behind those delivery license options, Hoffman said he is “deeply troubled by continuing reports” of social equity and economic empowerment applicants being targeted by would-be investors with financing deals that include things like forced sales once the exclusivity period has ended, control over key hiring and personnel decisions and cash distributions significantly disproportionate to stated equity ownership.
“While we have no jurisdiction over private negotiations between investors and prospective applicants, once we receive an application we have the authority and we’ll continue to use that authority to look at all relevant contracts, including financing contracts, to ensure compliance with our regulations as they relate to cap limits, required [economic empowerment applicant] or [social equity participant] control and disclosure requirements,” the chairman said. “And if there are violations, we have the necessary tools to enforce compliance. I am determined to put an end to predatory lending practices in the industry and commit to use all the resources available to the commission to do so.”
To Read The Rest Of This Article On Worcester Business Journal, Click Here
