By Tracy F. Seelye, Express editor
editor@whitmanhansonexpress.com
HANSON – Changes to Cannabis Control Commission (CCC) requirements for contract consideration that will affect host community agreements (HCAs) are doing so in a way that has some town officials again protesting that the state is overreaching its authority.
For now, however, the town is working with its town counsel to determine a set of actionable items to complete, with deadlines to help them comply with the new regulation requirements.
“I think having counsel assist us will be a big help.” said Town Planner Antonio DeFrias as he and Town Counsel Liz Lydon met with the Select Board on Tuesday, Oct. 29 to discuss those changes.
“It shouldn’t be a heavy lift,” Lydon said as Board Chair Laura FitzGerald-Kemmett balked at the cost of legal fees in the face of Hanson’s financial situation and she wanted the board to have time to think about and process the information presented.
“This has been going on for, roughly, about a year, so I’ve worked with counsel … to stay up to date and keep Hanson in compliance,” DeFrias said as he passes the microphone to Lydon to explain the nuances of the changes, how they affect Hanson and what, if anything, the town needs to do remain in compliance with the law.
The regulations were amended within the past year or so, according to Lydon.
“We knew that [changes were coming, but we weren’t sure to the extent, because the statute changed first, then the regulations were issued about a year ago,” she said. “The statute was unclear about what the regulations would state and how restrictive they would be.”
Town counsel then began the process of trying to renegotiate the HCAs. Only to find there were still uncertainties.
“The regulations actually went beyond what we had anticipated for restrictions on HCAs,” Lydon said. “They came up with a model HCA, they changed the whole payment structure around community impact fees, so that you could no longer charge a percentage of sales … and it has to be based on documented costs over the prior year.”
Any HCAs already negotiated, once their term expires, they would have to comply with the model agreement, or very close to it, according to Lydon, who added there is briefing case law to the effect that it’s not final because it hasn’t been appealed to the Supreme Judicial Court.
“But it’s created more uncertainty in the law because it says that the regulations are not retroactive to existing agreements,” she said. “That means all the agreements that are in place now should still be valid, however that doesn’t help with the uncertainty around payments under the existing agreement, because you still have to have documented costs related to the impacts of [an establishment].”
That boils down to: all of the existing host agreements have to be renegotiated, with fees based on documented costs and only cover impacts directly caused by a facility.
“We kind of knew that they were going to lean in this direction,” Select Board Chair Laura FitzGerald-Kemmett said. “It wasn’t as if they took a sharp left and nobody knew. … The CCC kept saying, ‘You better document,’ and, ‘It needs to be real costs.’”
She asked if Hanson had looked at when its agreement expires and what would need to be taken into consideration in negotiating a new one.
“We’ll need to very closely mirror whatever that model agreement is,” she said.
Lydon said she didn’t have that information at hand, so FitzGerald-Kemmett asked that the firm circle back to the board with it.
But Lydon said the CCC would notify the town when the agreement does expire at which time the establishment would reach out to town counsel.
“I have plenty of models that we can use,” she said.
“At the risk of stating the obvious, to me, it’s super-frustrating that we were sold a bill of goods,” FitzGerald-Kemmett said. “The rules have changed mid-stream … with, as far as I can tell, very little ability for voters, or the people impacted, or the towns impacted, to even influence what ended up happening. … It’s really disappointing to see the state take that approach.”
Other board members agreed.
FitzGerald-Kemmett said that, without the community impact fee they agreed to she doubted that agreement would have been possible.
Lydon said the agreements are still discretionary with case law as well as the aspect that towns can elect not to continue relations with a marijuana establishment if it is not in the town’s best interests.
“I have not seen that happen yet, but it is an option,” she said.
Lydon added that another piece of the regulation is that there is now a requirement for a social equity policy in place, requiring prioritize consideration of social equity applications from historically disenfranchised groups such as minority-owned businesses, or those seeking permits who are persons who were impacted by the war on drugs (including arrests for marijuana) or others who might fall under the label of an historically disenfranchised group.
The policies must include streamlining the application process, providing all the materials and information needed on the town’s website, including permitting requirements and a contact person and all applications must be easily accessible and an application process for a new HCA must be made available and transparent with decisions posted as well as how many establishments exist in a town and how many are social equity applicants.
“That should have been done already, under the law,” Lydon said. “But they are not enforcing [the policy requirement] it until May. Once the policy is in place, you’ll have to move forward to implementing the policy.”
There are three options:
- adopt a bylaw to exclusively permit social equity businesses for three years or until the exlusivity goal has been met;
- adopt the model bylaw ordinance created by the Commission to permit social equity businesses; and the easiest option, which does not require a Town Meeting vote;
- create a local approval process, which is required by the regulations anyway for equity applicants, that is administered on a one-to-one basis with a general applicant.
“This is a lot to unpack, but what I’m hearing you say is we’re getting no more money, but we’re being asked to do a lot more regarding this type of business,” FitzGerald-Kemmett said.
Lydon said the 3 percent fee still applies if Hanson allowed retail facilities in town, something Town Meeting did not approve.
“I don’t see that floating,” FitzGerald-Kemmett said. “We’ve tried that several times and we’ve gotten a very strong message on that.”
She did not see any incentive for the town to agree to what she called an unfunded mandate to comply with the new policy requirement.
“My thought is, we just do what we’ve done up until this point, and take it to Town Meeting for option one or two and see if the town wants to do anything with them,” said Board member Joe Weeks. “The town really needs to have a say in this.”
FitzGerald-Kemmett had more questions about what Town Meeting would be asked to decide.
“We don’t need to make that decision tonight,” she said. “It seems like a lot for a little town like ours, with very few resources, to take on.”
Lydon said, while there is assistance to applicants, there is no real assistance to towns and there is a lot of turnover going on at the CCC, which creates difficulties.
FitzGerald-Kemmett asked if the town could opt against allowing more facilities in town at all, because they lack the infrastructure to work with it effectively, and Lydon said it could be limited to the one license Hanson has already approved.
“If someone applied, it’s still at your discretion if you want to award another HCA,” Lydon said. “That is in the Select Board’s hands.” But another way to comply is to draft a social equity business policy first.
Lacking a policy, the town could be subject to fines if an applicant reported the town to the CCC.
She said there are other area towns who have complied, that Hanson can refer to for policy language,
“This is extremely concerning to me,” said Board member Ed Heal. “This sounds like a huge, huge, huge, slippery slope. We’re in the middle of an MBTA slippery slope, and it’s like, ‘Wow, they’re going to make us approve permits …’”
FitzGerald-Kemmett broke in to explain that the policy is required only if the town allows more permits.
“We don’t know what Town Meeting will decide,” Weeks repeated.
“This is the state going above and beyond yet again, forcing us to do something,” Heal said, later adding, “A white male cannot start a…”
“Well, maybe let’s not get quite…” FitzGerald-Kemmett said. But Lydon said a white male could if he had ever been arrested on marijuana charges.
“But that’s the person that gets the business,” Heal said to Weeks. “Somebody like me or you or even you,” he said, gesturing to FitzGerald-Kemmett, “wouldn’t be able to start a marijuana business.”
“Well, I’m a woman,” she said.
“To put it in a nutshell, you have the policy in place, but once you have it in place, it doesn’t mean that you have to allow any more [businesses],” DeFrias said.