Massachusetts cannabis retailer sues city over ‘community impact fees’

A cannabis retailer in Cape Ann, Massachusetts, is suing the city of Gloucester over “community impact fees” the company says are excessive and bad for business.

The suit, filed by the owner of Happy Valley in Salem Superior Court, names the city and outgoing Mayor Sefatia Romeo Theken and is asking the city to give back nearly $500,000 in fees, The (Newburyport) Daily News reported.

According to the lawsuit, Gloucester officials insisted on a community agreement that called for at least 3% of gross sales as a fee plus additional amounts for charitable contributions.

The city also demanded separate agreements for all three parts of the company, with the 3% fee applying to the retail arm, a $100,000 yearly fee for the grow operation and $50,000 a year for the processing side.

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Massachusetts’ recreational marijuana law allows communities to seek yearly fees of up to 3% of gross sales from a cannabis company, plus charitable contributions, for up to five years, depending on a business’ assessed impact on the community.

The president of cannabis retail trade group the Commonwealth Dispensary Association said the situation was “pay to play” and disadvantages small business owners in minority-majority communities.

The issue of unfair impact fees in Massachusetts was raised in September, when the chair of the state’s Cannabis Control Commission expressed skepticism over claims by the town of Haverhill that three marijuana shops were costing the municipality $1.3 million a year. The town was seeking to collect corresponding fees.