January 17th, 2024

Cannabis panel appointee aims to increase equity amid turbulence

Avery Bleichfeld

Ryan Dominguez, a longtime advocate for equity in the cannabis industry, was appointed last week to the state’s Cannabis Social Equity Advisory Board.

The appointment comes as the state’s Cannabis Control Commission faces internal challenges and impatience grows with efforts to increase access to capital for minority entrepreneurs in an industry with potential to redress racially disproportionate harms from the war on drugs.

In 2019, Dominguez, 34, helped found MASS CultivatED, a community college career training program that partners with Greater Boston Legal Services to seal and expunge criminal records related to cannabis.

The appointment of Dominguez, a San Francisco native and former chief of staff to state Rep. Chynah Tyler of Roxbury, shows the state’s commitment to addressing core challenges that have limited the entry of people of color to the industry, said Ava Callender Concepcion, acting chair of the Cannabis Control Commission.

“Ryan has been doing this work for years now,” she said. “You can tell that he understands the importance and the impact that the cannabis has and can have, particularly when we talk about equity.”

The social equity board advises the state’s Executive Office of Economic Development, which awards grants from the Cannabis Social Equity Trust Fund. The commission headed by Concepcion regulates all aspects of pot cultivation and sales in the Bay State and is currently embroiled in a fight between suspended chair Shannon O’Brien and state Treasurer Deborah Goldberg over allegations of racially insensitive remarks by O’Brien and workplace issues.

Dominguez, who came to Boston in 2007 to study at Northeastern and Harvard’s Kennedy School, brings much-needed experience to state cannabis operations and greater representation for people of color, said Tito Jackson, a former Boston city councilor and founder of the Apex Noire dispensary.

“Even though equity was written into the law,” Jackson said, “the vast majority of people who actually work in the cannabis industry are not people of color, which is absolutely the opposite versus the proportion of people who got incarcerated.”

Massachusetts was the first state to establish an equity mandate in its cannabis regulations. The equity fund was created in 2022, but for almost a year, the equity advisory board sat empty due to technical issues with the structure of the law. Following the passage of the supplemental state budget at the end of 2023, the path was cleared for the flow of money from state cannabis sales to the fund. To date, no grants have been awarded.

Dominguez said he’d like to broaden awareness of the fund as well as find additional ways to fill it.

“I think there’s an opportunity for us to start having conversations about engaging with philanthropy and other kinds of donors who see this as a great way to create new businesses for Black and brown entrepreneurs, especially those affected by the war on drugs,” he said.

The slow trickle of capital to minority businesses has a direct impact on minority hiring in the industry, according to Dennis Benzan, a former Cambridge city councilor who founded and owns Western Front, a chain of three cannabis stores in Chelsea and Cambridge.

“Without financial support and access to the capital markets, those jobs that have gone to many Black and brown folks, including women and veterans and others, are now at stake,” Benzan said.

Dominguez encouraged people to be patient while the fund gets off the ground.

“I do see this fund as a long-term support system for smaller businesses and social equity and economic-empowerment businesses to continue to cover some of their operations, but also scale and grow,” he said. “Once we really have it going, I think we’ll start seeing the fruits of all of that labor.”

Concerns in the industry also exist around exit strategies for cannabis businesses participating in the state’s social equity program at a time white investors are cashing in to build up significant wealth.

Jackson pointed to firms like Levia, a maker of cannabis-infused seltzer that was acquired for up to $60 million, according to the Boston Business Journal, or Cultivate, which was the state’s first adult-use dispensary, that sold for almost $160 million. He said that to date, there has not been a major exit of a social equity or economic empowerment cannabis business in the state.

Dominguez said the question of how to exit is an ongoing conversation in the industry.

“There’s a lot of folks who got in early into our market and are now at a mature stage where they’re looking to exit,” Dominguez said. “The biggest thing for us is like, how do we create the most value for some of these social equity and economic empowerment businesses that want to exit?”

He said that regulations around exit strategies are more likely to fall under the control of the Cannabis Control Commission or the legislature, but he intends to be part of the ongoing conversation in the industry.

“I think for this role, specifically, I’m just trying to expand the pie and make sure that some of our smaller businesses that may be struggling can pay for their operations and potentially grow so that they can get that value at the end,” Dominguez said. “But I think there’s going to be a lot of need to talk a more about exits and allowing people who do want to exit to do that.”