Cannabis Head Of State Questions Impact Fee After City Claims $ 1.3 Million In Costs | Haverhill

HAVERHILL – A state official said on Friday he was concerned about the appropriateness of the impact fees charged to retail marijuana stores by communities across the state, including Haverhill.

Almost six months after the owner of Haverhill’s Stem – a cannabis retail store – filed a lawsuit against the town and Mayor James Fiorentini requesting documentation of the costs the town incurred due to the accommodation of company, the city provided a report listing $ 1.3 million in spending. .

The report, which was provided to Stem with pottery stores Full Harvest Moonz and CNA Stores on September 10, describes both the existing costs and the annual expenses that city officials will incur as a result of the sale of marijuana in the city. detail.

The documents cost per city department, with police making up the highest portion of the total – including six new police officers and two new cruisers – with an annual cost of $ 866,930.

While he couldn’t comment on Haverhill’s report specifically because Stem and the city are still in dispute, Steven Hoffman, chairman of the Massachusetts Cannabis Control Commission, said he reviewed the document.

“We’ve built a great industry, but it’s not a new industry because it’s replacing an illicit industry that has been around for decades,†Hoffman said. “So things like police training on drunk driving and drug education have been going on for a long time and have nothing to do with the introduction of a legal business replacing a business. illegal So a lot of the extra expenses that towns and cities say incur – I just don’t buy.

State laws governing cannabis retail stores state that “the community impact charge shall be reasonably related to the costs imposed on the municipality by the operation of the marijuana establishment … and shall not not exceed 3% of gross sales of marijuana. establishment.”

In addition, impact fees that may be part of agreements with the host community cannot be in effect for more than five years.

“One of the problems is that we don’t have jurisdiction over the content of the agreements with the host community, so there is no way for us to control the content of these documents,†Hoffman said. “We asked the legislature to give CCC explicit jurisdiction over the content of HCAs and mitigation fees. It is in committee and we hope that it will become law.

Hoffman said when the state’s first two retail cannabis stores opened in November 2018, there were concerns about increasing crime, increasing drug overdoses, increasing youth drug use and the increase in DUI cases.

“Now we’ve been in the industry for almost three years and it’s gone remarkably smoothly,†he said. “There has been no increase in youth drug use, crime or hospital admissions. The best proof of this is Northampton, which is no longer asking for a mitigation fee because it acknowledged that there really was no additional expense it incurred. I commend them for recognizing this.

With 168 retailers operating in the state, even issues like trafficking and crowd control are non-existent, he said.

The retail cannabis industry in Massachusetts has already generated around $ 1.5 billion in sales this year and more than $ 300 million in tax revenue, Hoffman said.

“I think there are real issues with the way the host community agreements were negotiated in terms of how the mitigation fee is determined,” he said. “There are 351 towns and cities in Massachusetts and (potentially) 351 different ways of responding to legislation, and that’s obviously a problem.”

Impact Fee Report Details

The Haverhill report says the city needed six additional police officers during the day and early evening to cover cannabis stores and additional cases of impaired driving due to marijuana use; two additional police cars for additional officers, as well as uniforms, weapons, holsters and other equipment; the creation of a behavioral intervention unit to better manage situations where drug impairment may be a problem; and the training of six officers to recognize the impaired by marijuana. The one-time cost for the policy is $ 17,400 and the annual cost is set at $ 866,930.

The school department was the second highest reported annual cost, $ 288,219, which included items such as adding health teachers to six elementary schools, 33% of which are related to the impact of legalization, the availability and use of marijuana, and the addition of a substance. abuse counselor in high school and one in middle schools, 33% of which are related to the impact of legalization, availability and use of marijuana, according to the report. The one-time cost of the school is $ 225.

Legal fees totaled a one-time cost of $ 113,981.

The mayor’s office reported a one-time cost of $ 12,519 and an annual cost of $ 62,656, which includes the cost of responding to inquiries about the impact of cannabis retail stores, the editorial staff of agreements with the host community and the organization of meetings of the marijuana advisory committee.

The public health department reports a one-time cost of $ 282 and an annual cost of $ 28,243. Other departments reported smaller amounts.

Of the $ 1.3 million total, the city report says Stem is $ 747,658, CNA Stores is $ 424,296, and Full Harvest Moonz is $ 297,112 in annual spend.

The trial should go ahead

A Newburyport Superior Court judge partially dismissed a city request to dismiss Stem’s lawsuit against the city and the mayor.

In a lawsuit filed in Essex Superior Court in March, Stem alleged that the town had violated both state law governing the cannabis industry, as well as the terms of its agreement with the host community in failing to provide documentation of the costs incurred by the city as a result of the operation of the Company.

The city then requested that the lawsuit be dismissed, arguing that the cannabis industry is so new, that ways to determine the impact of a cannabis dispensary are still in development and that more is needed. of time.

The city’s motion to dismiss was heard in July by Newburyport Superior Court Judge Janice Howe, who on September 16 delivered a decision in which she accepted the city’s request to dismiss the charges. 1 and 2 of the lawsuit on procedural grounds, but denied the city’s request. request to dismiss counts 3, 4 and 5. The case is expected to proceed on the basis of these three counts, with Stem seeking to overturn the city’s impact fee because of what she says be inadequate documentation and evidence.

City attorney Michele Randazzo said that in light of the subsequent provision of the community impact fee analysis to Stem – and other marijuana retailers in Haverhill – she is expects counts 3 to 5 of the complaint “to be effectively rendered moot.”

“I cannot speak to Stem’s intentions for the future, but I will note that we have offered to meet with each established marijuana retailer to complete the annual review authorized under each host community agreement. To my knowledge, we have not had a response from Stem on this to date, â€said Randazzo.

The lawsuit has caught the attention of the state’s cannabis industry, as well as communities where cannabis stores have opened, as the ruling could set new standards on whether and how communities can collect fees. impact.

Hoffman highlighted the statewide importance of the Stem v City case and its potential to change the way communities move forward with their own agreements.

“What I hope is that this will provide some clarity on what is permissible and reasonable in terms of mitigation,†Hoffman said. “If the litigation results in a judgment, there will be clarity and specificity of what is allowed and what is not and I think it would be beneficial for everyone and if so it will create a priority and will reduce ambiguity and increase clarity and specificity.

Stem spokesman James Borghesani said he was grateful that the case is moving forward and that Stem will be given the opportunity to compare the costs listed in the report to any costs that Stem might consider legitimate.

“It is important to note that the law allows costs imposed on the city, and not costs invented by the city,†he said.

In addition to paying the city $ 358,000 in impact fees, with the first payment being made on May 26 of this year, Stem also paid the city $ 365,796 in taxes in June for its first year of operation and has donated more than $ 87,000 to local charities, in addition to providing the city with more than 500 hours of community service, according to documents provided by Stem owner Caroline Pineau.

Stem also paid the city $ 13,667 in property taxes for its downtown location at 124 Washington St.