ATHOL — Town Manager Shaun Suhoski has formally registered his opposition — and that of Athol’s Selectboard — to proposed legislation that would, in some instances, strip cities and towns of some of the revenue promised in hundreds of host community agreements negotiated between municipalities and cannabis-related businesses across the commonwealth. Omnibus bill S-2660, a compilation of several proposals that is being considered by the Senate Ways and Means Committee, includes proposals to change provisions related to community impact fees included in the HCAs, retroactive to 2016. A companion bill, H-4440, is also awaiting action in House Ways and Means.
Suhoski has sent testimony to the chairs of the respective Ways and Means committees arguing the legislation would “significantly impact cities and towns that worked to embrace the cannabis industry through negotiated host community agreements.”
“As in Athol,” Suhoski’s testimony continues, “I would surmise that many selectboards, city councils, town managers and mayors negotiated in good faith with the cannabis industry (some with budgets larger than the municipality itself) to reach agreements mutually beneficial to the new industry and its host community. Now, year into the licensing and start-up of the industry, municipalities will face an ex post facto review of these contracts in a new and even more complex regulatory scheme.
“Upending over 1,000-plus contracts across the commonwealth by enacting a bill with an effective date in 2016 — nearly six years prior — will create confusion for all parties and potentially spawn ill will and legal challenges that are unnecessary. Contract law falls under the jurisdiction of the judiciary. Having the CCC (state Cannabis Control Commission) assume and usurp home rule is a troubling specter and should be rejected.”
A sponsor of one of the bills currently under the umbrella of S-2660 is State Sen. Diana DiZoglio (D-Methuen). Her legislation calls for changes in how community impact fees are collected and accounted for.
“Transparency and accountability in our government is absolutely essential,” she told the Athol Daily News in an exchange of emails. “That is why I filed this legislation, which would require cities and towns to show how the cannabis impact fees they are collecting are being used to mitigate the impact in the community of cannabis shops.
“Local cannabis businesses generally seem to agree that if there are legitimate impact costs to a municipality due to a cannabis facility, they have no problem paying the assessed fee. However, they are greatly concerned by the lack of transparency by some cities and towns in the HCA process. Transparency, along with oversight, is critical to ensure that legal cannabis companies are on a level playing field as every other business in Massachusetts.”
S-2660 and H-4440 also call for creation of a Social Equity Trust Fund, which would provide grants and loans to Economic Empowerment or Social Equity participants. Monies from the fund would provide financial assistance to cannabis entrepreneurs who have been disproportionately harmed over the decades by the “war on drugs,” generally those from communities of color.
The Massachusetts Municipal Association said it supports the intent of this proposal but said in its own letter to the Ways and Means chairs, “the components in these two bills related to host community agreements make the measures untenable and unworkable for cities and towns and their residents.”
Regarding community impact fees, the MMA said, “We understand the community impact fee portion of the host community agreements has become controversial. We understand this concern and believe it might create a more predictable negotiation process for all parties if this particular part of the host community agreements could be managed differently in the future. However, H. 4440 and S. 2660 would not do that. These bills would create a more burdensome, unpredictable process for all parties, including the Cannabis Control Commission.”
Suhoski told the Athol Daily News that undoing the HCAs that have been negotiated in recent years could cost Athol a good chunk of money.
“The HCAs will result in essentially three percent of gross revenues (of local cannabis businesses) as a ‘one-time’ receipt to the town over the five-year term of the contract. Thereafter, under the current law, these HCA fees are extinguished unless both parties agree to enter new successor agreements.
“Because these revenues will be based upon the first five years of operation of the various businesses, I cannot give a firm number. However, projecting from the roughly $525,000 received from two of the enterprises in their first year, I would estimate the benefits to Athol to exceed $2.5 million and probably $3 million.”
Greg Vine can be reached at gvineadn@gmail.com