Even though an Essex Superior Court judge ordered Caroline Pineau, the owner of Stem, a Haverhill retail marijuana shop, to pay $356,000 to the city in impact fees, the business owner made her point this week and still stands on solid ground, in our opinion.
Pineau wasn’t unwilling to pay what was required under the Host Community Agreement with the city. She had offered to put the money in escrow until the city detailed specific impacts of the pot shop’s operation on Haverhill and how the impact fees had been spent to mitigate those impacts. In other words, Pineau was fine with paying, but she wanted proof from the city that there really were impacts that warranted the high fees.
As reporter Mike LaBella quoted Pineau in a story he wrote for Thursday’s Eagle-Tribune, “We are not discouraged or surprised by this preliminary ruling. The law clearly states that impact fees must be directly related to a cannabis establishment’s operations and must be documented and made public.”
Her pending lawsuit against Haverhill could have widespread impact on retail cannabis shops across Massachusetts and affect their financial futures.
After the ruling this week ordering Pineau to pay, Haverhill Mayor James Fiorentini said, “We are pleased and thankful for the court’s preliminary decision. We anticipated this decision, which is based upon well-established law, and believe we will win the final decision also.”
The city of Haverhill argued the pandemic made it difficult to do produce a detailed assessment of the impact of the marijuana business and said the Host Community Agreement requires payment of impact fees – and that the detailed documentation would come later.
We have supported legislation proposed by State Rep. Andy Vargas, a Haverhill Democrat, that would require local governments to conduct annual audits of the cost to the communities from hosting pot businesses.
Legislation passed in 2016 allows communities to charge pot shops excise taxes up to 3% as part of “host agreements.” That’s on top of the 10.75% state cannabis excise tax and the state’s 6.25% sales tax and up to 3% local excise tax, so we’re talking significant money that pot shops must pay to cities and towns.
The judge’s ruling might be appropriate, given the stipulations of the Host Community Agreement. But Haverhill and every community where marijuana business are operating should work to expedite the details and justifications about expenses they have incurred since those businesses opened.