The state of cannabis retail in Cambridge as of mid-January in a graphic from the Community Development Department.

A concerned citizen rang alarm bells at a public meeting about shady businesses practices in Cambridge’s cannabis industry that were met with indifference by officials including city councillors and city staff.

“Twice in the last three months, I’ve been offered money to be a social equity front for existing operators trying to get around Cambridge’s social equity policies. So I just wanted to let the city know that people are trying to do this,” said Steve DeMarco, identifying himself as a certified state social equity holder to a meeting of two council committees Jan. 18.

“They’re trying to get around the equity provisions that you’ve established. And they’re going to be relentless with it. So I just wanted to bring that to your attention,” DeMarco said.

The specifics of DeMarco’s concerns are fuzzy, but the policies he refers to are designed to increase the representation of marginalized communities in dispensary ownership.

The council’s response? “Mr. DeMarco, your time is expired,” city councillor E. Denise Simmons said. (Minutes from the hearing held by the Civic Unity and Economic Development committees are available here.)

Statements such as DeMarco’s are not uncommon, councillor Paul Toner said later. But with no evidence presented, the city felt little need to follow up. “People make allegations in public meetings all the time, and if they have evidence, they should share it with us,” Toner said.

No one followed up

No one from the city followed up with DeMarco to express interest.

Assistant city manager Iram Farooq confirmed that the city of Cambridge is not following up on the attempt at whistleblowing. “We’re not aware of his private business dealings,” Farooq said.

Cambridge’s acting cannabis liaison, associate economic development specialist Christina DiLisio, was a key speaker at the Jan. 18 hearing but declined to comment on DeMarco’s statement.

The state Cannabis Control Commission, contacted in the hopes an expert there could clarify issues around DeMarco’s claims, expressed no interest. A representative referred a reporter to social-equity information on its website. A review shows only a single possibly related memo warning of “predatory investors and scam artists” from 2019.

Officials asked whether DeMarco was describing anything illegal said they didn’t have enough information.

Disenchanted by the process

Other people in the marijuana industry weren’t surprised upon hearing of DeMarco’s comment, or that it was ignored. “That’s the problem with the industry and all of this social equity. That’s kind of why I backed off [from] it,” said Mike Crawford, a marijuana advocate and major player in Massachusetts weed who goes by the name Mike Cann. Perry Bailes, a Salem resident, said shady business practices and backdoor dealings happen so often that he left the weed business after trying to start a small dispensary. He was “extremely disenchanted in regard to the host community agreement process [and] the real estate process.” Bailes continued, “I came across some rather unscrupulous people. I’ve certainly had some experiences where [there were] expectations for a behind-the-door payment to the prospective real estate owners.”

DeMarco could not be reached for comment; the Cambridge address he provided to the council is an Airbnb, according to a neighbor. “I would hope that the city maybe can require full documentation for any kind of side deals that businesses might make,” he said in the meeting, “or anything that you guys can do to crack down on this kind of predatory lending and basically trying to steal people’s businesses.”

This isn’t the first time something like this has happened in Massachusetts. The Boston Globe reported that companies defy regulations and admit in on public documents.

Entrepreneur frustration

Though state law for adult-use cannabis was created in 2017, some five years later there remain only two retailers open in Cambridge: Yamba Market and Western Front, both in Central Square.

There are two dozen cannabis businesses open or preparing to open in Cambridge, according to documents from the hearing. That including 10 adult-use retailers under construction and nine more a step or more back at some level of review, whether it’s for a host community agreement, special permit or application. Cambridge also has three medical marijuana dispensaries in operation, none of which currently also sell recreational product.

Speakers at the meeting agreed Cambridge has made great strides in cannabis regulations but still has arbitrary rules that prohibit streamlined success for businesses. Explaining Cambridge’s cannabis permitting, licensing and dispensary application process took 20 minutes at the hearing.

“I’m proud of Massachusetts. We’re the first state that in its legislation had equity mandates … It has been and always will be a high – maybe the highest – priority of the commission,” said Steve Hoffman, a former chair of the state’s Cannabis Control Commission. Yet the numbers of minorities and applicants such as women and veterans “are nowhere near where they need to be.”

Many new or potential dispensary owners also expressed frustration with fees and permits they see as arbitrary. Owners and employees were left frustrated, confused and stuck in the development stage of their business rather than “actually opening doors,” said Marcus Johnson Smith, a co-founder of a cannabis business called The KG collective that was near opening. “Literally four years from this month was when I first signed my lease,” he told councillors.