Committee bill gives cannabis commission express authority over host community agreements

Lawmakers on the Massachusetts Legislature’s Cannabis Policy Committee on Friday advanced a redrafted bill that would give the Cannabis Control Commission express authority to review and regulate the mandatory agreements and payments between host communities and marijuana businesses.

In addition to having the CCC regulate host community agreements (HCAs), the committee said its bill (S 1126/H 3536) would allow a municipality to waive the requirement to have an HCA, make clear that an HCA may not require any financial obligations beyond the maximum 3 percent of gross sales fee, and clarify that the five-year term of an HCA begins on the day the business opens to customers.

“The legal framework for the new marijuana market is supposed to strike a balance across multiple goals — competing out the illicit market, local and restorative economic development, public revenue generation, and public health and safety among them. Unrestrained and expensive host community agreements that have become common over the past year have compromised multiple of those goals,” said Senator Sonia Chang-Diaz, the committee’s Senate chair. “The bill the Cannabis Policy Committee is reporting out today seeks to put more explicit guard rails on the development of HCAs, to restore balance to the market and enable entrepreneurs who don’t have $1 million in starting capital to still have a chance at competing.”

State law requires applicants for marijuana business licenses to enter into a host community agreement before the CCC will consider an application. The law stipulates that those agreements cannot run for more than five years and that the community impact fee paid to the municipality by the licensee cannot exceed 3 percent of the establishment's gross sales.

But the CCC has wrestled with the policy for more than a year now as entrepreneurs, lawyers, and lobbyists have shared stories about cities or towns demanding a greater percentage of gross sales or other asks that would not appear to comply with the language of the law.