Page 12 - BusinessWest April 14, 2021

Editorial
Cannabis Business Is Riding High
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Back in November — only two years after adult-use marijuana became legal in the Commonwealth — the Massachusetts Cannabis Control Commission
reported sales had surpassed $1 billion, and the state had collected some $200 million in taxes from the adult-use windfall. At the time, employment in the adult-use canna- bis field in Massachusetts was approaching 6,000. It’s likely significantly higher now.
The COVID-19 impact? Not much, really. Except during those weeks from March through early May 2020, when most businesses of all kinds were closed to the public, dispensaries have reported steady revenues right through the pandemic. While the supply-chain issues and other economic impacts that followed in the wake of COVID did slow the pace of prog- ress at some projects in various stages of development, cus- tomers are still lining up to get into the shops currently open.
In short, some industries are more resilient amid shifting economic tides — and public-health emergencies, it turns out — than others, and cannabis has proven, so far, to be one of them.
One lingering question, however, is how the rapid prolifera- tion of dispensaries and other cannabis businesses will impact sales at each individual shop — in other words, will supply
Opinion
begin to outstrip demand and make this a riskier or less desir- able industry to enter than it was a year ago?
To hear the business owners themselves tell it, the answer is no. Take Northampton, for example. Both Noho-based busi- ness owners we spoke with for this issue’s cannabis focus say that city has become such a destination for cannabis that each new enterprise just adds a little more texture to a robust eco- system — and draws in even more customers from outside.
After all, if a city is known for its restaurants, no one ever says there are too many, or that it’s a bad idea to open another.
The heightened competition has, of course, forced new business owners to think critically about how to best stand out from the crowd, and the stories starting on page 29 are good examples of how they’re doing exactly that.
Cannabis has been a boon for the state’s coffers, no doubt about it. But it continues to be a strong driver of employment as well, one with a still-undefined ceiling. And it’s begun to add real vibrancy to the economy and lifestyle of communities that have been welcoming hosts.
In short, this is still fertile soil. After a year of economic news that hasn’t always been bright, that’s something to cel- ebrate. v
UI Freeze Key to Economic Recovery
EBy Vasundhra Sangar
arlier this month, Gov. Charlie
Baker signed a two-year
unemployment-insurance (UI) rate freeze, along with a tax benefit for small companies that borrowed money under the federal Paycheck Protection Program (PPP).
The unemployment measure is great news for employers, who will avert a 60% increase as a result of a two-year schedule freeze on employer UI rates at Schedule E for both 2021 and 2022. The signed law will also allow the state to bond the remaining deficit in the state Unemployment Trust Fund to pay back more than $2.2 billion in federal advanc- es required to meet the overwhelming demand in COVID-19 benefit claims.
Separately, the bill will eliminate the 5% state income tax on forgiven Pay- check Protection Plan loans for pass- through businesses — including sub- chapter S corporations, LLCs, and LLPs — that used the money to keep workers on the payroll during the COVID pan- demic. This is critical for those small businesses that would have otherwise faced increased tax liability as a result of PPP loans they took to help keep their businesses afloat.
“This legislation takes a thought-
ful and comprehensive approach in delivering critical relief to facilitate eco- nomic recovery for the people of Mas-
sachusetts,” Baker said in a letter to the Legislature.
Associated Industries of Massachu- setts (AIM), which led the effort to avoid the unemployment-insurance rate shock, commended the governor and the Legislature for addressing the issue.
“The unemployment-insurance rate freeze provides a tremendous boost to Massachusetts employers as they seek to begin the process of economic recov- ery,” said Brooke Thomson, executive vice president of Government Affairs
at AIM. “Associated Industries of Mas- sachusetts and its 3,300 member com- panies worked diligently to support the freeze, and we are grateful for the collab- orative approach taken by the Legisla- ture and the Baker administration.”
AIM worked with policy makers throughout the development of the leg- islation to ensure it balanced the needs of employers and workers, ensuring public-health protections and encour- aging economic recovery.
In addition to the UI and PPP pro- visions of the language, the governor returned to the Legislature proposed changes to a COVID leave section of the legislation.
The COVID-19 Emergency Paid Leave provision passed by the Legis- lature would provide an additional 40 hours of paid leave to full-time employ-
ees if they are unable to work as a result of a COVID-19 infection or a quarantine order, and if the worker needs time to care for a family member unable to work because of COVID. Additionally, employ- ees will be able to use paid leave time to take time off to receive the vaccine.
In his amendment letter to the Leg- islature, the governor is seeking chang- es that would eliminate differences between the state’s version and a similar federal mandate, and adopt the federal requirement that unemployed workers receive no less than their usual pay rate, up to $850, or two-thirds the rate paid for family leave.
In addition, Baker is proposing to convert funding for the leave program to a tax credit of $40 per employee, whether or not employees take leave, for employers unable to access federal tax credits.
Based on the governor’s proposed amendment, the leave program would last through September 30, 2021.
AIM is reviewing the proposed chang- es to the leave section of the language and will provide comment to employers when the review is complete. v
Vasundhra Sangar is vice president of Government Affairs for Associated Industries of Massachusetts.
12 APRIL 14, 2021
OPINION
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