What Connecticut can learn from Massachusetts's marijuana industry
Recreational use of marijuana became legal in Connecticut last July, and retail sale is slated to begin at the end of this year. Massachusetts legalized the drug in 2016 — and the state’s industry offers a glimpse at what Connecticut could soon see.
WSHU’s Ebong Udoma spoke with CT Mirror’s Erica Phillips to discuss her article, “Can marijuana bring back social equity in Massachusetts? A case study,” as part of the collaborative podcast Long Story Short.
WSHU: Erica, you took a look at how the social equity provisions of the Massachusetts Cannabis Control Commission are working. And you're using it as a case study on what might happen in Connecticut. What did you find?
EP: Sometimes going and talking to people who have been through something is a good way to understand how things might go for you if you're about to embark on a similar endeavor. And that's the case here. So Connecticut is, as you know, on the verge of having recreational marijuana shops and growers and delivery and so forth, open up. That's supposed to happen around the end of this year and early next year. And Massachusetts has had this going on for a while.
To your question, Massachusetts also has these programs set up to try and make the industry equitable. So you're starting a new industry or launching it from scratch. How do you make sure that it's not just sort of immediately dominated by huge corporate players?
WSHU: And that was a big theme in Connecticut that Governor Lamont emphasized, the fact that this would be the most equitable legalization of adult sales of marijuana in the country. And so we really need to pay attention to this aspect of it.
EP: Exactly. And so again, so Connecticut is going to kind of make its attempt at being equitable. And I think I said, you know, equitable in terms of making sure there's space for everyone in the industry. But some of those specific programs also are aiming at trying to improve specifically the communities that were most affected by the war on drugs. And that's, you know, actual physical geographic communities, and then also communities of folks that experienced the worst of the War on Drugs era.
And so, in Massachusetts, there are some similarities with their social equity programs. And I'm sure the governor of Connecticut believes that Connecticut has the best one. I don't know how to kind of measure that, especially since ours doesn't necessarily exist yet. But you know, everyone is truly kind of aiming for this goal of equity in the industry, which I think is good.
Now, all that said, What does the industry look like in a place that's had adult use marijuana for sale now in Massachusetts for about four years? Well, it does kind of start to look like the normal industry where there are really big players who do dominate certain parts of the market. And there are upstart players who, actually, from what I found in the conversations I had, are kind of carving out their niche, and also trying to improve the communities that they exist in and argue that that has been one of the outcomes of this.
Communities that might have been a little bit dicier in years past — now, there's kind of a cleanup happening. The marijuana stores bring foot traffic and contribute to the community and employ people in the community, and from people I talked to, that has had some positive economic impact.
WSHU: Well, let's talk about Ulysses Youngblood, who you talked with in Worcester. Could you tell us a little bit about him and his concept about "blue ocean" and "red ocean?"
EP: Yeah, so he's a really fascinating guy. And one thing that that isn't in the story is that he grew up in Connecticut. He grew up in Bridgeport, I believe, and played football in Connecticut, and was recruited to a university in Massachusetts to play football. But within his first year, he was kicked out of school because they thought that he was smoking marijuana in his dorm, which may or may not have been the case. But at any rate, he got kicked out of school for marijuana use. As soon as it got legalized, he said, "You know what, I'm gonna start a business. I want to make something out of this." And so, you know, he got a college degree back here at Sacred Heart, I believe, and then went back, got an MBA and started his business. He's now a professor teaching classes about this.
But anyway, yes, so he thinks a lot about how business works and how industries work, and especially with this being a brand-new industry, but one that he's been familiar with for a while in the casual sense. And he has this theory that he's ascribed to called "blue ocean," which means that there is room for everyone. So it's not a red ocean, there's no blood in the water. You find your own place where there's no competition, and you can kind of offer something and start something that's new, and carve out kind of a new part of the market for yourself. So he has this really interesting way of thinking about it. And again, it's a new industry, so there might be opportunities like this. But that's not to say it's not competitive. So we have some other businesses I talked to that, you know, kind of got into that.
WSHU: Yes. Talk about Frank Dailey — he had problems raising the capital, even though he was able to get a license. The first hurdle is getting the license.
WSHU: — because of the limited number of licenses. And then even after you do get a license, being able to finance the business is another huge hurdle.
EP: Right, so Connecticut has placed pretty strict limits on the number of licenses available, Massachusetts doesn't have limits quite like that. But that's not to say it's easy to get a license, you know. There's still some hoops you have to jump through. But again, once you get licensed, wherever you are, Massachusetts, Connecticut, California, Colorado, you know, you still have to get a business off the ground, and you have to borrow money to do that. Anyone would have to borrow money.
And when you're a marijuana business, and it's illegal at the federal level, a lot of banks which are regulated at the federal level are not inclined to lend money to you. So it limits your options quite heavily, and unless you're sort of already a big business that's been doing this in some other states and has some deep pockets of lawyers and accountants, it can be very, very hard to get all the paperwork figured out, get all the terms sort of fairly to your liking, and get that money and get things started. So that's sort of the big hurdle. And you mentioned Frank Dailey — he talked a lot about how he had trouble finding good terms for any loans and ended up basically self-funding the business, which is what happens in a lot of these cases.