Our Opinion: Pot applicant fees invite trouble
U.S. Attorney Andrew Lelling may be on a fishing expedition with his convening of a grand jury to investigate contracts between Massachusetts communities and the marijuana retailers within their borders. Still, the pursuit of extra payments from retail applicants beyond that outlined in state law by many municipalities invites corruption and the situation in Fall River has provided evidence that it can happen.
The Boston Globe reports that six communities, including Great Barrington, have received subpoenas from Mr. Lelling's office seeking information about the specifics of their "host community agreements." The Globe added that it is likely many other communities received subpoenas as well.
In September, Mr. Lelling charged Fall River Mayor Jasiel Correia II of pressuring four marijuana businesses to pay $275,000 in cash bribes in exchange for city approval. The mayor has pleaded not guilty. This is the apparent motivation for the U.S. attorney to see if anything else is amiss regarding marijuana retail contracts in the state.
The state's marijuana law limits the value of payments under host community agreements to 3 percent of a company's annual revenue for a maximum of five years, adding that the payments be "reasonably related" to the cost imposed by the retail facility, which could include traffic control costs and assuring that people under 21 are not served. Many municipalities have exceeded this limit by requesting separate fees or "donations," asserting that this is not specifically prohibited by the state law. It is not specifically allowed by the law either. In Great Barrington, Theory Wellness, the county's first recreational retailer, grossed more than $6 million in sales in less than three months, passing along $185,807 in the community impact fee to the town. Theory also agreed to donate $10,000 annually to a local nonprofit of its choice that provides "health, wellness and/or substance abuse education programs."
This appears well-intentioned on the part of Great Barrington. But The Eagle warned in an editorial on August 6 ("Our Opinion: Towns wrong to hit pot stores with fees") that this practice constitutes an invitation to abuse. Lanesborough, at the recommendation of its consultant, KP Law of Boston, seeks to impose a 2 percent community benefit fee on sales at New York City chocolatier Lev Kelman's planned retail marijuana store in the former Arizona Pizza restaurant on Route 8 on top of the 3 percent assessment allowed by law. Mr. Kelman has grudgingly agreed to this stipulation, most likely because the large margins associated with retail marijuana sales make it a good business decision. Marijuana industry advocates assert that this practice by town and city officials makes it difficult for small, locally owned pot retail firms to get a foothold in the business. Furthermore, a Globe Spotlight Team report found that applicants with financial resources enabling them to hire law firms or former municipal officials to act as lobbyists are the most likely to win approval from local town officials. Favoring the well-heeled runs counter to the intent of the Legislature to encourage those of low-income to open marijuana shops, specifically in neighborhoods that have been ravaged economically by the sale and usage of illegal drugs.
Mr. Lelling's search may not turn up another Fall River but that doesn't change the fact that the practice of many communities to seek extra money from retailers opens the door to corruption and closes the door to applicants who are not carrying a big bankroll. Either the Legislature should amend the law to to specifically prohibit this practice or it should set forth the parameters for such payments and give the Cannabis Control Commission the power to review all municipal contracts with retailers and block those that skirt state law.
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