MONTAGUE — The Selectboard intends to freeze spending revenue generated from its cannabis impact fee “as a precautionary measure,” as requested by Town Administrator Steve Ellis, in response to new state cannabis legislation that was signed into law earlier this month.
“At this point in time, having consulted with counsel, given the changes in the cannabis host community agreement law … there’s just a lot of uncertainty relative to the ground that we’re standing on as we consider expenditure of those funds,” Ellis said. “The legislation itself still needs to be interpreted into a set of regulations by the Cannabis Control Commission, but we view that we’re really proceeding at risk if we make any further expenditures based on how open-ended that law is.”
The legislation, An Act Relative to Equity in the Cannabis Industry, follows more than a month of negotiations between the House and Senate, according to the Massachusetts Municipal Association (MMA). The law eliminates “the inclusion of community impact fees in host community agreements after the first eight years of a licensee’s operation, and licensees would be allowed to bring a breach-of-contract action against the host community if they believe the community impact fees are not reasonably related to the actual costs imposed upon the city or town,” according to the MMA.
“The law is also likely to retroactively subject existing host community agreements to scrutiny by the Cannabis Control Commission (CCC), a major concern for the MMA and local officials,” the association’s statement continues. “This is due to the CCC’s new authority for review and approval — not only at license application but also at each license renewal.”
Prior to Gov. Charlie Baker signing the bill into law, Ellis framed language surrounding host community agreements as “the most intriguing and potentially concerning” aspect for Montague during a Selectboard meeting in May.
“There could be implications for Montague’s agreements (because of) a particular clause that would have the Cannabis Control Commission review all host community agreements on an annual basis at the time that firms are relicensed, which occurs annually,” he said at the time.
Currently, Montague has four actives host community agreements, according to Selectboard Chair Rich Kuklewicz. Only one cannabis establishment is operational — 253 Farmacy, a dispensary at 253 Millers Falls Road. To date, 253 Farmacy has contributed roughly $631,000 toward the town’s cannabis impact fee stabilization account, with $408,850 having been designated for uses, Ellis said.
The only ongoing set of expenses relative to cannabis impact fee spending goes toward the Brick House Community Resource Center’s “Strengthening Families” program, which Ellis said has been almost fully implemented. He requested the Selectboard allow this program to wrap up its closing events as intended and instead only request that other parties set to receive funding through cannabis impact fee revenue delay their expenditures.
Cannabis impact fee budget appropriations for fiscal year 2022, amounting to $288,800, included evidence-based substance abuse prevention programming; substance abuse counseling in schools; science, technology, engineering and math (STEM)-based after-school programs; and a feasibility assessment and preliminary design for roadway safety improvements to the intersection of Millers Falls Road and Industrial Boulevard. Ellis said funding for police training for identifying cannabis intoxication was scheduled as well, but has “not yet been expended due to limited training time being available for officer participation.”
Ellis told the Selectboard he was reassured by Police Chief Christopher Williams that his department is “not having significant issues with cannabis intoxication” and that he “is comfortable with delaying” cannabis impact fee spending “until the context and the legality is clarified.”
“I think it’s unfortunate,” Selectboard Clerk Matt Lord said. “I think it’s a defensible step to take.”
Reach Julian Mendoza at 413-772-0261, ext. 261 or jmendoza@recorder.com.