In a statement with the potential to further ramp up an already passionate discussion about Cannabis Host Community Agreements in Massachusetts, Attorney General Maura Healey told hosts Jim Braude and Margery Eagan of Boston Public Radio today that "I have been on record [about] giving the Cannabis Control Commission authority to review these Host Community Agreements."
Host Community Agreements, or HCAs, are contracts that companies must sign before beginning the process of obtaining a state cannabis license - wherein the operator may agree to give up to 3% of their yearly revenue to a their local city or town in the form of a "impact fee" - and that process has long been a source of consternation for applicants seeking to open businesses in the flourishing industry.
Some cities and towns, a steadily increasing number of smaller applicants alienated by the process tell me, have been ignoring the limits on fees (3% of an operator's yearly revenue) that can be charged via those Host Community Agreements because the new industry is seen as a quick source of revenue for cash-strapped municipalities.
The issue, beyond the illegal fees? The money collected by way of those HCA agreements are, by law, not allowed to be used to generate revenue and must, instead, be collected only to offset "specifically documented" impacts caused by the operation of a cannabis company in that city or town.
However, dating to a decision made by the Cannabis Control Commissioners in a 4-1 vote in the fall of 2018, there is currently no one, at any level of elected state government, reviewing those HCA's for compliance with the law.
State law, the Commission told lawmakers in 2019, was "unclear" and thus the Agency would not review the agreements to ensure compliance.
As a result, what some argue is supposed to be a hard cap in those HCA's of 3% of a companies yearly revenue has turned into a baseline figure, with certain municipalities tacking on hundreds of thousands of dollars in extra "voluntary donations" on top of that 3% for items ranging from new fire trucks or police cruisers to traffic improvement studies.
Further compounding an already difficult situation, the CCC also does not currently require cities and towns to document the impact caused by cannabis companies in the context of those HCA agreements (leading one local operator, Caroline Pineau from STEM Haverhill, to sue her town in desperation after she was told her store was responsible for an increase in domestic violence locally, thus justifying the 3% impact fee).
Speaking to me Tuesday afternoon about the AG's comments, Pineau told me, “I’m glad to hear that the AG agrees with many lawmakers that the CCC needs the power to review HCAs. Hopefully that will help convince the Legislature to pass a bill specifically granting the CCC that authority.”
For some prospective applicants like Ominique Garner, the despair and anger at the CCC's 2018 decision not to review HCA's is palpable.
"[The CCC] said they were worried about being sued, but what was the cost of that decision on the community who didn't have the money to hire the lawyers to be able to sue?" Garner asks me, imploring an answer we both know is sadly not going to be forthcoming.
Garner continues, "the CCC knows they are the only ones with the authority to review everything in the cannabis industry...if the CCC is not willing to review these HCA's then they are showing that they are not willing to prioritize the Black and brown communities that were most directly impacted by the drug war."
"On so many occasions I, and others in my community, went directly to the CCC and told them that their authority to review these HCA's was written into the law, and that by not doing so they were hurting us and hurting in a way that cannot be repaired", she tells me.
Garner, and others, made impassioned pleas to Commissioners during an applicant forum held in the spring of 2019.
"When we talk about equity, equity is about access to the market and meeting the most marginalized people where they are at. The people who have been impacted by the CCC's decision to not review these HCAs, and to not prioritize the Black and brown communities that were hurt most by the drug war...those people don't have the same tools as the large companies who can afford to pay illegal HCA fees. Thus the very system that was designed to help us has now become a tool of oppression."
Garner concludes, "I also appreciate the Attorney General for speaking up about this issue, as I have heard from multiple applicants that they had reached out to her office, however this has been going on for three years and I wish that she had used her platform to speak out earlier and stop the pain."
Dr. Jeffrey Moyer, the author of a recent UMass Boston academic research study examining abuses of the HCA process by local cities and towns that concluded nearly $2.5 million has been collected to date in illegal fees, also told me Attorney General Healey's comments were a welcome respite from years of "artificial" debate;
"Its great that Attorney General Healey is coming around, two or three years later...perhaps the Cannabis Control Commission would have voted a different way had the AG made her position clearer when this issue was first being discussed in the fall of 2018", Moyer tells me.
"Hopefully this input gives the CCC, or lawmakers, the impetus to finally do something and solve the issue once and for all."
The CCC, for its part, told me in a statement through a Spokesperson Tuesday afternoon that;
"Two years ago, and again as part of the recent Joint Committee on Cannabis Policy hearing, the Cannabis Control Commission (Commission) submitted a several-hundred page report to the Legislature seeking clarification and authority to regulate Host Community Agreements (HCAs). Since then, a Superior Court judge has agreed the Commission is consistent in its position that it has no role under Chapter 94G in reviewing the contents of HCAs, and the statute gives the agency no further role beyond the certification to the contents of the HCA, which the Commission currently does through its licensing review process. While the Commission awaits further guidance from the Legislature, last year it implemented a new practice in which all licensees applying for renewal must submit municipal data regarding the funds their city or town put towards community impact. As part of the agency’s commitment to transparency, the Commission continues to report publicly on the data it receives as part of its monthly public meetings."
Justices of the Massachusetts Supreme Court, however, cast the Agency's interpretation of Chapter 94G in doubt on a number of those claims during oral arguments last month in a closely-watched HCA case (Mederi Inc. v. City of Salem).
The CCC, while not a party to the litigation formally, wrote an Amicus Curiae brief ('friend of the court') in that case defending its position on HCA's, but Associate Justice Scott Kafker told attorneys for Mederi during those oral arguments in February of this year that he was "...as bewildered as you that the CCC doesn’t think it can enforce its economic empowerment priority [through oversight of HCA agreements]. To me, those seem like what the CCC is best capable of doing.”
The still-pending SJC decision in Mederi will supplant the precedent cited by the Commission spokesperson above, should the Justices rule that the Agency did indeed have authority under the law to review the content of HCA's.
While Healey did also note, during her remarks, that she did not per se see a role for the Attorney General's office in the Host Community Agreement process, for the State's top law enforcement officer, and one of three elected officials responsible for appointing Commissioners to the CCC, to make a public statement noting her opinion that the Agency should have the authority to enforce HCA law further adds pressure on lawmakers to fix the problem.
Said Kate Avruch, Founder of Silk Consulting and a Professor of Cannabis at Worcester's American International College, "I’m hopeful that these sorts of conversations will reinforce the duty of the CCC to oversee the laws as written. As of late, we have seen a hyper focus on HCAs community impact since the Fall River case, however without legislative confirmation that this is the CCCs responsibility, I am personally worried that this will continue to be a game of pass the buck."
Attorney General Healey also closed her remarks on HCA's with a direct message to local cities and towns, one that perhaps captures the essence of the reform efforts currently underway on Beacon Hill and elsewhere;
"My message to any town engaging in these agreements is; be reasonable, don't be exploitative...and always follow the law."