THE STATE’S MARIJUANA oversight board wants to put a halt to communities demanding payments from legal pot businesses in excess of what’s allowed by law but the panel’s decision could move the opening of retail stores even further back.
The Cannabis Control Commission on Thursday put off for two weeks a proposal by Commissioner Shaleen Title to review community host agreements for all applicants to ensure they are in compliance with the statute that limits municipalities to collecting a 3 percent tax and payments of no more than 3 percent of the gross revenues to cover legitimate expenses.
But commissioners have heard from some applicants and seen agreements that some cities and towns are extracting hundreds of thousands of dollars more in payments to allow companies to open up in their communities.
The law does not give the commission the power to force communities to comply but Title insisted the board has both the right and the responsibility that applicants abide by the statute, adding if someone enters an agreement beyond the scope of the law, they are not in compliance with the application requirements.
“I believe the vast majority of municipalities are acting in good faith but some going beyond what is provided in the (law),” said Title, who told reporters after the meeting she’s seen “five or six” agreements that were blatantly beyond what the Legislature allowed. “I actually don’t have a problem with (rejecting an application).”
Other commissioners pushed back on the proposal, insisting the board did not have the authority to review the agreements, only to certify that a potential business has reached a deal with a community. Commissioner Britte McBride said the most the board can do is offer guidance to communities and trust they will comply with the law.
“These are contract negotiations between two willing partners,” said McBride. “Everybody engaging in these negotiations are adults.”
McBride also pointed out by adding review of host agreements to the process, the timeline for issuing final licenses would be further extended. And if the commission rejected a signed agreement and forced the parties back to the table, communities have 90 days by law before confirming they have reached a deal, pushing the opening of stores back even further.
Commissioner Kay Doyle said by rejecting applicants because they agreed to pay more than they legally had to would only impact the industry.
“If we deny licenses until such time as we receive a host community agreement we determine is compliant, it’s basically going to hurt the applicant more than anything,” she said. She also said the timing of the proposal, as communities are holding special Town Meetings in the fall to take up bans, could fuel the growing number of communities enacting prohibitions.
“I’m concerned if we make this even more complicated than it is by inserting ourselves this late in the process, we may deter communities considering allowing marijuana for adult use and give some an additional reason for them to deny the licenses,” said Doyle.
Jennifer Flanagan, a former state lawmaker before being appointed to the commission by Gov. Charlie Baker, said she’s “not happy” with seeing host agreements that don’t comply with the law but the board would be wading into the issue without knowledge of what went into the negotiations to reach the pact.
Commission Chairman Steven Hoffman said at the least, the commission should review host agreements if only to gain knowledge of what applicants are being asked to pay. But he conceded that making the approval of such agreements a part of the process may have to be done through further legislation or a change in regulations. Both potential alterations would be months in the making with the Legislature out until January and would either created a longer wait for applicants already in the pipeline – as well as consumers waiting since November, 2016 to buy legal pot – or make for a separate system for those already approved and those yet to be granted licenses.
Hoffman acknowledged a solution would have to be found sooner rather than later.
“We’re not going to approve any final licenses until we resolve this issue,” he said.