The Massachusetts Cannabis Control Commission (MCCC) made an official announcement Thursday reminding municipalities who are seeking agreements with adult-use cannabis businesses to stay within the law when it comes to negotiating financial terms, the Associated Press reports.
The MCCC said it has seen “anecdotal” evidence of communities exploiting cannabis businesses with excessive taxation and fees, which is against clear stipulations in Massachusetts‘ state cannabis law.
State law allows municipalities to charge businesses for anticipated costs of services such as road or traffic improvements, policing, etc. Host communities are not allowed, however, to charge more than 3 percent of the total annual revenue of the businesses and no arrangement may last longer than five years. In addition to the 3 percent for services, municipalities may also collect up to an additional 3 percent in taxes.
“If municipalities don’t follow that law, they are creating obstacles to the commission’s mission statement, which is to safely, equitably and productively implement the law. We already know that when barriers to entry are too high at the local level we end up with a market that is slow to start up and has a striking lack of diversity.” — Shaleen Title, MCCC Commissioner, in the report
However, the commission itself is unsure whether it has authority over the agreements made between municipalities and cannabis business owners. At least one commissioner, Jennifer Flanagan, has defended the communities, citing costs associated with substance abuse treatment that were not considered in the state’s cannabis regulations.
“Instead of hiding our heads in the sand and pretending this doesn’t exist, I really think that part of the conversation with municipalities has to be about the public health aspects of this.” — Jennifer Flanagan, MCCC Commissioner, via the Associated Press
The MCCC gave communities two weeks to respond to the directive.