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Massachusetts Towns Got $2.5M In Illegal Payments From Dispensaries

Something’s messed up in Massachusetts. Dispensaries are paying way too much to municipalities, according to the law.

Boing Boing

Newly revealed data fuel claims that the green rush has seemingly resulted in a money-mad morass of Massachusetts marijuana corruption, reports 7 News Boston. Municipalities in the state have received at least $2.5 million in illegal extra payments from Cannabis dispensary operators.

You can bet that the blowback from the new study is just beginning, particularly true given the timing of the study’s release. A once-promising young mayor’s trial for alleged Cannabis corruption just headed to the jurors.

The Cannabis Business Association paid for the new research. The study examined hundreds of agreements between Massachusetts municipalities and marijuana businesses licensed to operate in those cities and towns.

The study found that cannabis companies have paid at least $2.46 million more than required under law. Beyond that, it found that communities often have no plan for how to spend the money they collect.

‘Host Community Agreements’ Reviewed

Jeffrey Moyer of the McCormack Graduate School of Policy and Global Studies at the University of Massachusetts Boston conducted the research. Moyer reviewed 460 host community agreements. State law requires the agreements as a condition for licensure.

The payments to cities and towns are not supposed to exceed 3 percent of a marijuana business’s gross sales. But, surprise, surprise, researchers found they often do.

“A significant proportion of the agreements we analyzed required additional payments from business beyond the legal limit, amounting to an excess of at least $2.46 million whether through reimbursements, local charity donations, so-called ‘community benefit payments,’ or donations of employee time to education efforts,” Moyer said.

On the same day the report was released, Joint Committee on Cannabis Policy held a hearing on bills that would further regulate host community agreements. The agreements have been a problematic issue for both regulators and the dispensaries. The problem’s been around since Massachusetts marijuana legalization went into effect in 2017.

The House last February passed a bill that would have made clear that payments are not to exceed 3 percent. The Cannabis Control Commission has explicit authority under the bill to review and enforce the terms of host community agreements.

The Senate never took up that bill.

Few Plans For How To Spend The Money

Moyer, in his report, also found that Massachusetts municipalities collecting impact fees and other payments had few plans for how to spend the money. The plans that did exist often did not align with the recommendations of the Cannabis Control Commission. The plans were not subject to any oversight or enforcement.

The study recommends, among other things, that the Legislature authorize the Cannabis Control Commission to review host community agreements. The Commission should establish rules for such agreements, according to the study.