MA Municipalities May Be Strong-Arming Cannabis Businesses

Thanks to a provision in the official application for marijuana business licenses in Massachusetts, municipalities in the Bay State have been able to squeeze cash, donations and other perks from cannabis entrepreneurs, according to Boston.com.

Applications require aspiring marijuana business owners to include a so-called “letter of non-opposition” from town councils showing they don’t oppose the business from settling within their borders. In Massachusetts, growers and dispensaries are required to be vertically integrated.

But before they sign off on a non-opposition letter, some towns have gotten marijuana businesses to sign “Host Agreements” stating they will provide a portion of their income to the towns.

For example, the agreement between Worcester, Massachusetts and the recently-approved Good Chemistry dispensary mandates that over the next three years the business pay the city $450,000 plus between 1.5% and 2.5% of gross sales. After that, Good Chemistry must pay Worcester $200,000 plus 2.5% of gross sales, Boston.com reported.

Other dispensaries have paid cities between $50,000 and $100,000, the report said. Some businesses have dismissed the agreements as the cost of doing business, but the state’s leading medical marijuana patient advocate called the agreements a form of “extortion.”

2 comments on “MA Municipalities May Be Strong-Arming Cannabis Businesses
  1. Joe on

    The whole “MMJ program” has been a farce and sadly it’s the only way we could get access to it. They claim it to be “medicine” but you pay a hefty tax on it and (at least here in NY) although it’s “sick” and elderly people who are going to the dispensaries the dispensaries are in “dark seedy” areas of town with no signage basically “shaming” people and possibly leaving them vulnerable to attack. And when states and municipalities charge hundreds of thousands of dollars for applications and requiring millions in insurance and bond the “little guy” can not afford to get into the business theoretically making it a big business only business.

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