Grow, Gift, Repair

HCA bill heading to full legislature

Massachusetts lawmakers on Friday advanced a bill that would put stricter requirements on so-called host community agreements — the contracts between marijuana businesses and municipalities that have come under scrutiny from federal prosecutors in recent months.

The state Legislature’s Joint Committee on Cannabis Policy approved the bill in a bid to push back on “unrestrained and expensive host community agreements” (HCAs) that hurt economic development and efforts to drive down the black market, according to state Sen. Sonia Chang-Diaz, the committee’s co-chair.

“The bill the Cannabis Policy Committee is reporting out today seeks to put more explicit guard rails on the development of HCAs, to restore balance to the market and enable entrepreneurs who don’t have $1 million in starting capital to still have a chance at competing,” Chang-Diaz, a Jamaica Plain Democrat, said in a statement.

The bill “expressly authorizes” the Cannabis Control Commission, the state agency tasked with overseeing the legal marijuana industry, with reviewing and regulating host community agreements, according to a summary provided by Chang-Diaz’s office.

The bill also “specifies that no financial obligations of any kind are permissible beyond the maximum 3% of gross sales fee (currently allowed) that a municipality may require to defray local impacts of a marijuana establishment,” the office added. Many marijuana entrepreneurs have complained that despite the 3% cap, many cities and towns have made donations or other expenses in excess of that cap a requirement to getting an HCA.

The bill still faces a lengthy approval process on Beacon Hill: The state House and Senate must sign off and send the bill to the governor’s desk.

Under the bill, the five-year duration period of a host community agreement starts on the day the marijuana business opens. A city or town could also waive the requirement to have a host community agreement with a marijuana dispensary. Lawmakers included the provision in response to city and town officials who said the host community process was burdensome when they already have a business permitting process.

Marijuana companies must have the agreements in hand before applying for a license with state officials. Industry advocates and some dispensaries have voiced complaints alleging that towns are asking for money from them above the 3% community impact fee allowed by current state law.