The Massachusetts House appears poised Wednesday to take up legislation giving state cannabis regulators the authority to review and regulate the agreements marijuana businesses are legally required to enter into with their host municipalities.
Marijuana advocates and regulators have been wrestling with the issue of host community agreements (HCAs) for more than a year as entrepreneurs, lawyers, and lobbyists have shared stories about cities or towns demanding more from businesses than the state’s marijuana laws allow. Activists and business owners have pointed to the required agreements as one reason for the slower-than-anticipated rollout of the retail marijuana market and as a barrier that’s keeping small businesses from establishing themselves in the new industry.
Second Assistant Majority Leader Representative Paul Donato said after Monday’s session that the host community agreement bill is on the House’s agenda for the formal session it has planned for Wednesday.
Legislative clarity on HCAs and enforcement of those agreements could help clear up one of the thorniest issues that has faced regulators as the legal marijuana industry establishes itself in Massachusetts.
Late last month, lawmakers on the Joint Committee on Cannabis Policy advanced a redrafted bill (H 4327/S 2479) that would give the Cannabis Control Commission express authority to review and regulate the mandatory agreements and payments.
It was not immediately clear whether that redrafted bill, which the House sent to the Committee on Health Care Financing and which the Senate sent to its Ways and Means Committee, is the one the House intends to discuss Wednesday. House Speaker Robert DeLeo's office confirmed Monday that the topic of HCAs will be on Wednesday's agenda, but did not specify a bill number and said the House was waiting for something from its own Ways and Means Committee.
The Committee on Health Care Financing, which has been without a House chairperson since Jennifer Benson resigned her seat in the Legislature last month, was not immediately available to field questions about that committee’s plan for the bill. Bill sponsor Representative David Rogers of Cambridge was not available for comment.
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.
In addition to having the CCC regulate HCAs, the Cannabis Policy Committee said its bill 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.
On Monday, an advocacy group that was behind the 2016 ballot initiative that legalized marijuana in Massachusetts sent an organizing e-mail to ask its supporters to call legislative leaders to urge that the HCA bill get votes in both the House and Senate.
“Unfortunately, the rollout of the [legal marijuana] program has been frustrating for many Bay Staters, especially those who are trying to get businesses up and running,” Marijuana Policy Project New England Political Director Matt Simon wrote in the e-mail. “In particular, the requirement that applicants sign host community agreements (HCAs) with municipalities has created significant problems, especially for smaller businesses. HCAs detail benefits cannabis businesses must provide to a locality, such as fees and ‘voluntary’ donations.”
In January 2019, the CCC voted to formally request that the Legislature grant it “statutory authority to review and regulate” HCAs. The commission had previously voted down a proposal to include a review of HCAs as part of its licensing process, with Chairman Steven Hoffman declaring at the time that the CCC lacks the legal authority to intervene or reject an application based on the HCA.
Michael P. Norton contributed to this report.