Massachusetts regulator criticizes local ‘impact fees’ for cannabis firms

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The practice in which Massachusetts municipalities levy “impact fees” on cannabis companies that operate within their jurisdictions is drawing increasing criticism, including from a top state marijuana regulator.

According to The (North Andover) Eagle-Tribune, the fees came under fire Friday when Steven Hoffman – who chairs the Massachusetts Cannabis Control Commission – said he’s skeptical of the town of Haverhill’s claims that three marijuana shops are costing the municipality $1.3 million annually.

Officials sought to cover those costs – mostly attributed to increased police staffing and resources – by charging the cannabis businesses “impact fees.”

“We built a big industry, but it’s not a new industry as it’s replacing an illicit industry that has existed for decades,” Hoffman said, the newspaper reported.

“So, things like training police on DUI and drug education has been going on for a long time and has nothing to do with the introduction of a legal business replacing an illegal business, therefore, a lot of the incremental expenses cities and towns are saying they are incurring – I just don’t buy.”

Though impact fees have been part of the cost of doing business for Massachusetts marijuana companies since the state’s recreational market debuted in 2018, the practice has sparked litigation in Haverhill.

The lawsuit against the town of Haverhill, filed by retailer Stem, is ongoing.

State lawmakers, meanwhile, are debating whether to put “impact fees” under the jurisdiction of regulators. That could mean the practice will eventually be brought to a halt.