BOSTON — Lawmakers are seeking to curtail fees cannabis businesses are forced to pay to cities and towns as part of a broader overhaul of the state’s pot law.
The legislation, which was recently approved by the Legislature’s Joint Committee on Cannabis Policy, would nullify existing host agreements between pot operations and local governments and require them to renegotiate the terms.
Impact fees would still be allowed, but they would be capped at 3% of a pot shop’s gross sales, and the host agreements would expire after five years.
The proposed changes would also give the state’s Cannabis Control Commission more regulatory authority over the terms of those host agreements.
“No applicant, licensee, or holder of a provisional or final certificate of registration shall be denied a license, registration, renewal thereof by the commission on the sole basis of an agreement containing an invalid term or condition related to the community impact fee,” the bill, filed by Sen. Pat Jehlen, D-Somerville, reads.
The proposal is part of a broader package of changes to the state’s cannabis laws, including a plan to authorize on-site consumption at pot bars and cafés.
Supporters of the proposed changes have long argued that local governments are charging excessive pay-to-play fees and refusing to justify the charges. They say pot shops have a minimal impact on police, fire and other municipal services.
The state’s 2016 law legalizing cannabis allows adults age 21 and older to possess up to 10 ounces, and authorized regulated cultivation and sales.
The law allows communities the option of charging pot shops excise taxes up to 3% on retail sales. That’s on top of a 10.75% state cannabis excise tax and the state’s 6.25% sales tax.
In addition to those taxes, cities and towns may charge impact fees that are “reasonably related to the costs” of hosting a pot business, such as staffing additional police patrols. But those fees cannot exceed 3% of the company’s gross revenue.
Those fees must be renegotiated by communities every five years under the law.
Some communities have added a “re-opener” clause to agreements that require cannabis sellers to ramp up payments if they’re giving other communities more money.
Industry advocates say the long lines and traffic jams outside dispensaries that came with the opening of the first retail stores in late 2018 subsided long ago. Most stores hire their own security and don’t rely on local police.
David Torrisi, a former state lawmaker and president of the Commonwealth Dispensary Association, which represents marijuana retailers, said negotiations of so-called host agreements are “inherently one-sided, the impact fees are being abused” and the cost of a marijuana business on surrounding communities is “negligible.”
“I could make the argument that a Dunkin’ Donuts shop has more of a detrimental impact than a marijuana store does,” he said in recent testimony.
Efforts to eliminate the impact fees are strongly opposed by the Massachusetts Municipal Association, which argues that the agreements are no different than contracts with developers and others to offset the increased costs of providing police, fire or other municipal services.
In a letter to lawmakers opposing the bill, MMA President Geoff Beckwith said the proposed legislation would “usurp local authority” to negotiate agreements with private businesses to offset impacts to the community.
“Contracting between local governments and private entities is a long-established practice and the changes reflected in these bills could have a long-term impact on the ability of municipalities to negotiate on behalf of the public, even outside the marijuana industry,” Beckwith wrote.
The measure is currently before the Senate Ways and Means Committee, which must decide whether to put it up for a vote in the full Senate. It would also need to be approved by the House and Gov. Charlie Baker.
Christian M. Wade covers the Massachusetts Statehouse for North of Boston Media Group’s newspapers and websites. Email him at firstname.lastname@example.org.