The governor of Massachusetts signed legislation designed to promote social equity in the state’s cannabis industry, as well as establish the framework for on-site marijuana consumption lounges.

Massachusetts lawmakers recently approved the legislation in a convincing vote after a month of negotiations. According to NBC Boston, the compromise bill, S 3096, seeks to “promote greater diversity in the legal marijuana industry, ratchet up oversight on the host community agreements that marijuana businesses are required to enter into with municipalities, and to lay the groundwork for cities and towns to green light on-site cannabis consumption establishments within their borders.”

Gov. Charlie Baker gave his approval for the reform to Massachusetts’ marijuana laws nearly six years after voters chose to legalize recreational cannabis at the ballot box.

In particular, the new legislation will create a Social Equity Trust Fund charged with providing grants and no-interest and forgivable loans to low-income individuals and those disproportionately harmed by cannabis criminalization who wish to participate in the licensed industry.

The state’s Marijuana Regulation Fund, which collects cannabis excise tax as well as application and licensing fees, will allocate 15 percent of the funds it holds towards the new body.

“This law will rebalance the playing field, where so far wealthy corporations have been able buy their way through the licensing process and too many local, small business owners and Black and brown entrepreneurs have been locked out,” said Sen. Sonia Chang-Díaz, co-chair of the legislature’s Cannabis Policy Committee.

Another boost to marijuana reform advocates in Massachusetts is the inclusion of provisions that will eventually allow for on-site cannabis consumption spaces, subject to community approval though local votes. To date, only Nevada and Alaska have passed legislation permitting the practice at the statewide level.

The bill also contains provisions that will provide tax relief to marijuana businesses in Massachusetts. Specifically, it addresses Section 280E of federal tax law which prohibits businesses dealing with a federally-prohibited substance from deducting ordinary expenses from their tax bill.

Under the new legislation, cannabusinesses will be treated in the same manner as other legal businesses insofar as the state’s tax code is concerned.

“To ensure that cannabis businesses can thrive in the commonwealth, it decouples provisions of the Massachusetts tax law to allow cannabis businesses to deduct ordinary business expenses,” said Sen. Michael Rodrigues, chairman of the Senate’s Ways and Mean Committee.

The legislation also contained provisions approved by lawmakers that would have established a pilot study to assess the feasibility of allowing qualifying students to access and use medical marijuana products at school.

Baker, however, decided to veto this provision on the basis that it strayed too far from the legalization proposal approved by voters in 2016.

”The voter initiatives that legalized medical marijuana in 2012 and 2016 included strong measures to keep marijuana away from K-12 schools and school children. Both laws explicitly stated that marijuana would in no circumstance be permitted on school grounds,” Baker said. “Because the study proposed in section 26 clearly works against these important and well-established protections and disregards the clear intentions of the voters in legalizing marijuana use, I cannot approve this part of the bill.”

state marijuana laws