A Superior Court judge in Massachusetts ruled that a cannabis retailer must pay a $356,000 community impact fee to the town of Haverhill.
However, the lawsuit that Stem filed in April continues.
Caroline Pineau, owner of Stem, alleges in the suit that Haverhill officials were violating state law by not justifying the need for so-called community impact fees.
The suit asserts that Stem had the right to withhold the fee until Haverhill officials showed how the store was affecting the town and why the fees are needed to mitigate those impacts.
Under Massachusetts law, cannabis retailers must obtain a “host community agreement” from the municipalities in which they plan to operate.
The host communities, however, have the right to seek reimbursement for extra costs related to the marijuana companies doing business in the town – extra police officers for traffic or security, for example – but the fees can total only up to 3% of the operation’s annual revenue.
But by state law, towns and cities must explain why the impact fees are being imposed. Many municipalities, however, simply ask businesses to reimburse them the full 3% without explaining why the funds are needed.
According to The (North Andover) Eagle-Tribune, Essex Superior Court Judge James Lang on Tuesday ruled that Stem must pay Haverhill’s fee while the lawsuit proceeds.
Pineau said she is confident of victory.
“We are not discouraged or surprised by this preliminary ruling,” Pineau said told the newspaper.
“The law clearly states that impact fees must be directly related to a cannabis establishment’s operations and must be documented and made public.”
A Stem victory could have a major impact on Massachusetts’ cannabis retailers, which have accused local officials of abusing community host agreements to gouge money from marijuana business owners.
An attorney for Haverhill argued that the community impact fee should be paid first and details on how the money is spent can be provided later, The Eagle-Tribune reported.