Local marijuana fees top $50 million as industry slams municipal ‘slush funds’

Current state law allows communities to levy a 3% tax on marijuana sales, as well as an impact fee of up to 3% of a company’s annual sales, provided the fees are “reasonably related” to the costs imposed by the institution. But in the absence of state oversight, many municipalities charged marijuana operators the maximum amount without citing specific impacts.

Local officials say the fees were negotiated in good faith and helped mitigate the cost of setting marijuana regulations, processing license applications and dealing with increased traffic.

But the North East report raises new questions about the practice, which advocates and entrepreneurs have long denounced as a simple form of corruption that funnels money into independent projects while freezing small cannabis startups that don’t. cannot pay the fees.

Of the 88 communities that had previously reported collecting fees as part of their local agreements with marijuana companies, only 47 reported the amount in response to a public records request by the researchers. This suggests that the total of $53.3 million is significantly lower than the actual amount collected by cities and towns.

Fall River – whose former mayor is serving a six-year sentence in federal prison for accepting bribes from marijuana license applicants – received $5.34 million in fees, more than any other municipality responding to the survey. The city did not tell researchers how the money was spent and made no comment to The Globe.

Brookline, where the Boston area’s first recreational marijuana store opened in 2019, was second on the list with $4.9 million in impact fees. This total is in addition to the hundreds of thousands of dollars that local marijuana companies have paid to police officers working on city-mandated security details at dispensaries.

Devon Fields, the city’s administrative services manager, said the advent of marijuana stores has brought significant administrative headaches and costs to the neighborhood, including several special town meetings on pot policy proposals. .

“We suffered a ton of neighborhood impacts, including disorderly driving as well as litter and litter and parking and traffic enforcement issues,” Fields said. “I think it’s completely justified. . . . It would be a shame if that money stopped. »

Unlike many municipalities, Brookline has set aside its expenses in a separate fund administered by a community board and publishes a detailed account of expenses. Fields defended the city’s handling of money, which was used to hire addiction counselors and launch racial justice initiatives, and noted that Brookline has pushed local pot retailers to emphasize the diversity in hiring.

“The public process at Brookline is transparent and really highlights everything,” she said. “More oversight would be nice – we don’t want a Fall River situation in our hands. But we were in a situation where [legal marijuana] was happening whether we were ready or not, and we had to spend a lot of time and resources to make it work.

The Massachusetts Municipal Association, which represents local governments, lobbied against the impact fee crackdown proposal, saying the fee is fair and an effective incentive for cities and towns to house marijuana facilities.

“It’s no surprise that the cannabis industry is releasing another report that promotes the financial interests of their members, aiding their campaign to discredit the host community agreements that cities and towns have fairly negotiated on behalf of the public”, Geoff Beckwith, Group Executive Director. , said in a statement. “Cities and towns should retain the ability to represent their residents and taxpayers in negotiating local agreements with the cannabis industry.”

Only 42 municipalities provided the researchers with information on how they spent revenue from fees. Of these, half said they invested the money in their general funds, which allowed them to spend it on a number of local initiatives and budget items, whether or not related to the impact of marijuana stores and grow facilities.

Maynard, for example, spent part of his $137,000 in fees on four park benches, while Wareham invested the majority of his $1.7 million in new police headquarters. Other communities said fees were used for everything from fire equipment and police cars to storm drains and ride-sharing programs.

“Our research shows that while some municipalities are following the spirit of the law and striving for real transparency, most are not,” said Jeffrey Moyer, a Northeast public policy professor who oversaw the study.

David O’Brien, president of the Cannabis Group of Companies, said it shows “many municipalities are using community impact fees as a slush fund with no accountability and little transparency.”

A handful of communities, including Northampton and Lee, have stopped collecting impact fees, saying marijuana companies have been good neighbors and impose few measurable costs. But others have doubled. Haverhill, for example, is fighting a lawsuit filed by a local marijuana store challenging its impact fees.

Kim Napoli, a longtime advocate for drug policy reform and attorney at law firm Vicente Sederberg, said cannabis operators are happy to cover any real costs they may impose, such as the need to treat wastewater from growing operations. What is objectionable, she argued, is having to pay substantial fixed fees that are not imposed on non-marijuana businesses with similar impacts.

“It’s basically legalized bribery,” Napoli said. “I appreciate the need for local control, but the impact fee is far too vague for comfort.”

Dan Adams can be contacted at [email protected] Follow him on Twitter @Dan_Adams86.

Melissa C. Keyes