MMA urges Cannabis Policy Committee to reconsider host community agreement bills that would usurp local control

The Honorable David M. Rogers, House Chair
The Honorable Sonia Chang-Diaz, Senate Chair
Joint Committee on Cannabis Policy
State House, Boston

Dear Chair Rogers, Chair Chang-Diaz, and Distinguished Members of the Committee,

On behalf of cities and towns across the Commonwealth, the Massachusetts Municipal Association is writing to offer our comments and concerns regarding several bills before your Committee for a public hearing today.

Municipal officials have been on the front line of implementing the Act to Ensure Safe Access to Marijuana (Chapter 55 of the Acts of 2017), and have a responsibility to ensure that it is done in a balanced way that maximizes the benefits of the new industry while giving appropriate consideration and weight to health and safety concerns, and possible adverse impacts on residents, business, neighborhoods, economic development plans, or other important factors. As part of the implementation process, municipalities and private recreational marijuana establishments have been negotiating terms in their host community agreements pursuant to G.L. Chapter 94G section 3(d), and we have heard from a number of communities that these negotiations have largely been a positive experience with both sides coming to the table to negotiate freely and in good faith.

This is why the MMA strongly opposes H. 3536, An Act relative to the cannabis control commission’s authority regarding host community agreements, and S. 1126, An Act relative to host community agreements. The MMA believes that these bills are overreaches and would usurp local authority. Contracting between local governments and private entities is a long-established practice and the changes reflected in these bills could have a long-term impact on the ability of municipalities to contract freely, even outside the marijuana industry. The MMA strongly supports existing municipal contracts that allow for the negotiation of monetary or development considerations for the benefit of the municipality. Some examples include private development contracts or Tax Increment Financing (TIF) agreements, host community agreements with the gaming industry, contracts with the movie industry, cable franchising agreements, and mitigation contracts with industrial and housing developers. In this context, municipally negotiated host community agreements are an extension of common practice.

The marijuana industry’s public relations and lobbying campaigns have sought to diminish and weaken the municipal role in the permitting and licensing processes. This is entirely predictable and expected – that’s what industry trade groups do on a regular basis to court their members and build a paying constituency. Almost every industry seeks to limit government’s role at all levels, but this frequently runs counter to the public interest. In the area of marijuana licensing and permitting, cities and towns have an essential role in determining the number of establishments in their communities, permitting those businesses, and negotiating host community agreements that serve the public interest for the people of their communities. Again, it is expected that the marijuana firms and their lobbyists will seek to flatten the landscape and remove municipal discretion and flexibility in the negotiation process. However, that is not in the public interest.

The marijuana public relations campaign has asserted claims that host community agreements create a barrier to entry for social equity businesses and smaller firms. That is clearly a self-serving distortion of reality. There are major barriers to entry in any new and emerging industry. For the marijuana industry in Massachusetts, the true barriers are access to capital, the cost of legal services given the complex interplay between state and federal law, the lack of business/retail experience, and competition from a small number of very large firms that are attempting to consolidate their dominant positions in the marketplace through mergers, associations and other legal maneuvers.

Instead of squelching municipal authority to negotiate on behalf of the public interest, as H. 3536 and S. 1126 attempt, we recommend that policymakers focus on how we can create innovative programs so that small players can get the assistance they need. Municipalities want diversity in their communities and they want to welcome businesses run by local entrepreneurs. The lack of participation by these candidates should not be blamed on municipalities, or on the modest cost of host community agreements that have been mutually and freely agreed to by both parties.

It is also important to recognize that we have 351 cities and towns with diverse needs and approaches to policy implementation, reflecting the expectations of the citizens of their communities. Similarly, businesses will have differing expectations and practices in terms of how they engage with the community and become good corporate citizens. How these approaches are reflected in host community agreements will differ all across the state. We oppose state-set impositions that take away municipal authority to negotiate on behalf of their residents.

Further, it is likely that once the marijuana industry becomes more established in Massachusetts, and the market becomes saturated, private marijuana establishments will gain the upper hand in the negotiations. Tying the hands of municipalities will severely limit their ability to come to the table as equals, and could undermine their ability to represent the public’s interest in a balanced setting.

While we strongly support the authority of cities and towns to include additional provisions for mitigation payments or nonprofit donations in their host community agreements, there are many agreements that have no additional clauses. At our last count, there are at least 28 communities that have no additional clauses in at least one of their host community agreements – that’s nearly half of the 59 communities that have a marijuana establishment (either in operation or having received a final or provisional license). In total, communities have already executed at least 473 host community agreements. According to the Cannabis Control Commission’s website there are over 3,000 partial applications submitted with the Commission, meaning communities can anticipate executing many, many more host community agreements in the coming months.

H. 3536 and S. 1126 would tie the hands of municipalities and place a thumb on the scale in favor of industry, severely limiting their ability to come to the table as equals, and undermining their ability to represent the public’s interest in a balanced setting.

In terms of social-consumption-related bills before your Committee today, the MMA welcomes the opt-in framework that is under consideration and looks forward to working with your Committee and state policymakers to advance an approach that works well. We have concerns with the language in H. 3541, An Act clarifying business permitting procedures and S. 1125, An Act relative to social consumption of marijuana. We are completely supportive of our few communities that wish to be a part of the social consumption pilot program, however, the language of these bills seemingly conflates local municipal processes, and we would like to work with you on language that better reflects the local legislative process to allow these municipalities to opt-in to and determine the number of social consumption establishments that will operate in their communities.

Thank you for your interest on these very important local government matters. If you have any questions, please do not hesitate to have your office contact me or MMA Senior Legislative Analyst Brittney Franklin at 617-426-7272 or bfranklin@mma.org at any time.

Sincerely,

Geoffrey C. Beckwith
Executive Director & CEO