NEWS BRIEF

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.”

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