State marijuana regulators are concerned about a “significant uptick” in recent weeks of potential industry investors proposing contract terms that might violate regulations in an attempt to take advantage of economic empowerment and social equity program entrepreneurs.
Cannabis Control Commission Chairman Steven Hoffman said Thursday that fellow commissioners and staff have received a burst of complaints, particularly involving limitations on control of a marijuana vendor applicant.
In some cases, investors are proposing aggressive loan terms that increase the likelihood that an entrepreneur would be unable to pay and would therefore lose control of their business.
“This is an issue we’ve been concerned with for a while and focused on for a while and there has been a recent uptick,” Hoffman told reporters after the commission’s meeting. “The fact that there’s so few alternatives available to some of these applicants means that they’re probably more open to considering some of these terms than they would be if they had some other options.”
Hoffman said he could not put an exact estimate on how many incidents have occurred recently, but he said he personally has received between 10 and 15 complaints in the past two months, most of which are tied to negotiations over delivery operations.
The commission will work to increase awareness in the field so that economic empowerment and social equity program entrepreneurs — who will have exclusive access to delivery-only licenses with the ability to buy marijuana wholesale for the first three years of delivery under regulations approved in November — are aware of resources available if they feel improperly pressured.
“We’re not in the business of telling applicants this is a good deal or a bad deal. That’s for their judgment,” Hoffman said. “That’s for their judgment. We’re not trying to in any way, shape or form prevent them from entering into a contract that they feel is in their best interests. Th at’s just not our role. What’s very clear to me is if it crosses the line of being in violation of our regulations, we will discover that and we have clear tools in our arsenal to deal with that.”
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