The Story Every Dispensary Owner In Mass Is Following Closely

Do cities and towns have to actually document the “impact” of cannabis shops in order to collect fees? This lawsuit may determine that.

Community impact fees. Where the hell do we even start?

I guess it would be sometime in 2017, after Massachusetts voters supported recreational cannabis at the ballot box but before the industry stopped being afraid of the small-minded municipal tyrants (and their supporters in the community) who like flexing their muscles when it’s time to welcome (or not welcome) weed businesses to their cities and towns.

As our state’s imperfect Governing Adult Use Marijuana Act was initially written, adult-use as well as medical stores were required to secure Host Community Agreements (HCAs) with municipalities where they planned on setting up shop. The Act also allowed cities or towns to impose an optional local tax of up to 3% of gross sales in addition to the 6.25% state sales tax and 10.75% excise tax on cannabis products already in play.

Between 2018 and 2022, Mass cannabis companies coughed up in excess of $52 million in so-called impact fees.

As you might imagine, business owners aren’t fans of outrageous payments to their host lords. Sure, some local weed taxes may in certain cases go to educational programs or even infrastructural improvements that aren’t inherently awful, but the whole premise of the fees is that cannabis is bad and would result in beautiful communities turning to crack holes overnight—and we all know that’s not the case. Sensible folks have always understood this, but a lot of selectpeople and town meeting and council members across Mass are anything but sensible. They’re prohibitionist monsters, and their golden geese are getting tired of forking over excessive fees.

On Monday, reported on a suit filed in Massachusetts Superior Court by Caroline’s Cannabis—the first woman-owned recreational cannabis shop in the commonwealth—contending that officials in the town of Uxbridge, where it operates one of its two retail shops, haven’t justified via actual documentation the $90,000 in quarterly fees they’re collecting. The suit was filed more than a year ago, but is now picking up steam and getting noticed.

National outlet MJBizDaily picked up the story right away, as did Green Market Report, noting that “the case could go to trial this summer, since the town is fighting the claims and has replied in court filings that it’s not required by state or local law to document expenses incurred by the dispensary’s existence.” Meanwhile, “Both the town and Caroline’s Cannabis have accused each other in court documents of breach of contract and other misdeeds.”

Law360 reported that there may be a pretrial conference in the Caroline’s Cannabis case on July 11, though that isn’t certain.

This all comes in the wake of a whole lot of advocacy around the issue, by Caroline Pineau from the Stem dispensary in Haverhill among others, and of outgoing Gov. Charlie Baker signing legislation last August that limited the taxes cities and towns can collect plus added some accountability to the fee formula.

In 2021, Northampton, where NETA opened the first rec dispensary in the state in 2018, announced that it would stop assessing impact fees moving forward. And last November, Boston became the first municipality in the state to stop collecting impact fees and return the money that they collected via HCAs up to that point.

We’ll see which cities and town officials follow suit—whether they’re guided by their hearts and fairness, or by whatever precedent possibly comes from the Caroline’s lawsuit.