Medical cannabis dispensaries in Massachusetts are being subjected to a ‘pay-to-play’ scheme by cities and towns in order to get letters necessary to win state licenses, according to a Boston Globe review of compacts between the companies and the municipalities.
Good Chemistry of Massachusetts promised to pay the city of Worcester $450,000 over three years, and $200,000 a year after that along with $10,000 annually to charities, in order to procure the blessing from city officials. The company also has to pay property taxes and agreed never to seek a reduction or elimination of taxes due to its not-for-profit status.
A negotiation in Springfield shows that the city would get 7 percent of a prospective dispensary’s revenue, along with another $50,000 per year donation to the police department.
In Salem, Alternative Therapies Group paid $82,856 to the town after opening their dispensary, the state’s first, a year ago. That deal requires them to pay 1.25 percent of their annual sales for the first two years and 2 percent after that.
These types of arrangements are not typical in other states with cannabis infrastructure, and advocates say the system will increase the cost of doing business in the state while siphoning money from shops that could be used to offset costs for needy patients.
Local leaders say the arrangements are necessary because municipalities will need the funds to deal with unforeseen problems with the industry, such as increased traffic and police services.
Dominick Pangallo, chief of Staff for Salem Mayor Kimberley Driscoll, said the city has experienced neither a crime nor traffic increase since the dispensary opened.
Edward M. Augustus Jr., Worcester’s city manager, said the city will use the funds from Good Chemistry for a struggling after-school and summer youth program, not for police and traffic services.
“The market will dictate at what point it is not financially viable for them to sign host agreements that are above a certain number,” Augustus said in the report. “It’s up to the companies to say that’s not sustainable.”
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