Grow, Gift, Repair

Politico article on equity

Massachusetts’ problem, though, goes beyond cities not wanting pot on their turf. The lack of state oversight of host community agreements has resulted in corruption and groups shut out of the licensing process.

Now the Commonwealth is working on a fix: A bill that would give the Cannabis Commission the ability to review host community agreements advanced out of committee in January.

Host community agreements are a five-year contract between the business owner and the town that requires the cannabis business to pay up to 3 percent of its gross annual income back to the town for any extra costs the town may incur. That “community impact fee,” though, has been misused in so many towns that the federal government has launched a criminal probe.

In August 2018, the Boston Globe reported that many host community agreements were potentially violating state law. In January 2019, the Massachusetts Grower Advocacy Council told state regulators that 79 percent of the host community agreements they reviewed in the state “require marijuana establishments to pay annual contributions to the town that either plainly violate the statutory terms or may result in unlawful community impact fees.” Last week, public radio station WGBH reported that out of approximately 500 community agreements, 314 went beyond the limits set by the state.

In November, U.S. Attorney Andrew Lelling convened a grand jury to investigate corruption connected to the issuance of local cannabis licenses.

MGAC’s Peter Bernard said that these additional payments have included everything from one-time fees of $90,000 to the city and local charities, to purchasing the city a new snow plow. Bernard said that these extra fees mean out-of-state operators can come in with deeper pockets and the ability to offer city governments more than smaller, local businesses.