HOST AGREEMENTS TO GET CLOSER LOOK AMID SLOW MARIJUANA ROLLOUT
By Colin A. Young
STATE HOUSE NEWS SERVICE
STATE HOUSE, BOSTON, JULY 26, 2018.....Attempting to provide clarity on an issue that has been blamed for the slow rollout of legal marijuana sales, the Cannabis Control Commission on Thursday voted to issue guidance on host community agreements and seek public comments for the next 10 days.
State law calls for communities to enter into host community agreements with marijuana licensees and stipulates that those agreements cannot run for more than five years and that the community impact fee paid to the municipality by the licensee cannot exceed 3 percent of the establishment's gross sales.
Because the CCC will not consider a license application until a host community agreement has been executed, marijuana entrepreneurs and advocates have complained that municipal officials use the agreements to secure contributions above and beyond the 3 percent cap from prospective marijuana businesses. The law states the fees "shall be reasonably related to the costs imposed upon the municipality" by the marijuana business.
CCC Chairman Steven Hoffman said the question of what can and cannot be included as part of host community agreements has created "some confusion on both sides" and Commissioner Jennifer Flanagan said host community agreements have "been a very contentious issue throughout the commonwealth."
Commissioner Britte McBride led the CCC's work to develop the municipal guidance it approved Thursday. She said the CCC hopes to help clear up what is considered "reasonably related" in a host community agreement.
"The guidance we are going to issue, if agreed upon by the commission, states that the commission views fees that are reasonably related as those that compensate a municipality for its actual and anticipated expenses resulting from the operation of the marijuana establishment," she said. "There needs to be a reasonable relation, the fee cannot merely be a fee without designation of its origins or justification of its amount."
The Yes on 4 campaign behind the 2016 ballot initiative said it places "a lot of blame" for the slow launch of retail non-medical marijuana sales on municipalities because many have dragged their feet on establishing zoning for marijuana businesses and have not moved quickly to agree to the host community agreements prospective businesses must have executed before applying for a license from the CCC.
RiverRun Gardens, a Newburyport-based company that is seeking a license to grow marijuana as a microbusiness, tweeted Thursday, "#smallbusinesses in the #cannabis market are being priced out. We will pay 3%, as the law states, not more."
Commissioner Shaleen Title said the issue of host community agreements strikes at the heart of the CCC's goal of incubating a fair and equitable legal industry. She said the ability of a small business, minority-owned business or other economic empowerment program applicant to fairly negotiate a community host agreement "is a critical factor, maybe even the most critical factor to creating a just and inclusive industry."
"If municipalities don't follow that law, they are creating an obstacle to the commission's mission statement, which is to safely, equitably and effectively implement the law," Title said. "We already know that barriers to entry when they're too high at the local level we end up with a market that is very slow to start up, that has a striking lack of diversity."
The CCC agreed Thursday to publish the guidance and solicit public comments on the document until 5 p.m. on Monday, Aug. 6. The commission plans to discuss the feedback they receive at a meeting on Thursday, Aug. 9.
Commissioner Kay Doyle said it is critical that the CCC get its guidance on host community agreements out quickly so it can "get it resolved as soon as possible." She asked that people submit detailed comments -- "Supreme Judicial Court-worthy briefs" -- to give the commission a real sense of the issue.
"It is actually more an encouragement for folks on all sides of this issue to take the time you are given to comment, and particularly the lawyers listening in the room," she said. "I really want to hear...we hear a lot anecdotally, but want to actually see an argument -- a legal argument including statutory construction -- on both sides of this issue rather than just hearing about it."
The CCC also approved guidance on equitable policies for municipalities, a document that "encourages municipalities to build the licensee selection process in a way that prioritizes the community's individual needs and the Commonwealth-wide commitment to an equitable industry and economic justice." The commission also approved a guidance document to provide applicants with information on the requirement to provide the CCC with a diversity plan and a plan to positively impact areas of disproportionate impact.
Also Thursday, the CCC more than doubled the number of provisional licenses it has issued by unanimously approving seven provisional licenses.
The CCC approved three applications from Alternative Therapies Group, Inc., a Salem-based company that already operates a medical marijuana dispensary, including an application to grow between 30,001 and 40,000 square feet of marijuana, to manufacture marijuana products and another to operate a non-medical retail shop in Amesbury.
The commission also OK'ed four applications from New England Treatment Access, which operates medical dispensaries in Brookline and Northampton. NETA was approved for licenses to grow between 40,001 and 50,000 square feet of marijuana, to operate two non-medical retail locations and to manufacture marijuana products.
CCC Executive Director Shawn Collins said Thursday the CCC has a total of 85 applications before it for review. Of those 85, Collins said 35 are awaiting a review for completeness by CCC staff, 18 have been returned to the applicant because they were found to contain insufficient information and that the CCC is waiting for word from its background check vendor or host communities before proceeding with another 20 applications. The CCC had already issued five provisional licenses and approved another seven Thursday.
The CCC has not yet licensed an independent testing laboratory, though one of the completed applications before the CCC was submitted by a testing lab. No non-medical marijuana can be sold in Massachusetts until it has been tested and approved by an independent lab.
Serving the working press since 1894