Massachusetts Senate passes bill to crack down on excessive cannabis fees

The Massachusetts state Senate unanimously passed a package of cannabis reforms that includes clamping down on the exorbitant fees some municipalities are charging licensed marijuana businesses.

The measure, which passed by a 39-0 margin on Thursday, also would give the state Cannabis Control Commission the authority to approve or reject the host community agreements (HCAs), according to The Boston Globe.

HCAs are the controversial agreements that prospective marijuana operators must sign to do business in those communities.

The law allowed municipalities to collect up to 3% of a company’s gross sales to offset negative impacts.

But most communities demanded the maximum without evidence of actual costs, and some also enticed companies to make tens of thousands of dollars of “donations” to various community causes.

“Today’s vote is a positive step to rein in the lack of transparency and blatant overreach by municipalities who have padded their budgets by collecting outrageous ‘impact fees,’” David O’Brien, president of the Massachusetts Cannabis Business Association, told the Globe.

“The time has come for every municipality to provide receipts for how they are spending the money they have collected.”

The Senate measure also would allow marijuana businesses to sue if local communities fail to properly document the impacts supporting the fees.

As far back as 2018, the Cannabis Control Commission cited anecdotal evidence of municipalities imposing excessive fees on marijuana businesses, slowing the rollout of the recreational marijuana market. Federal prosecutors also reportedly investigated some of the deals.

The Senate bill, which was characterized as the most significant package of reforms since the adult-use marijuana implementation law was enacted in 2017, also includes a provision allowing licensed marijuana cafes in a handful of communities.

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House Speaker Ron Mariano has already pledged to pass a similar reform package in the state House of Representatives.

Then the House and Senate would need to agree on a final bill before it could be sent to Democratic Gov. Charlie Baker for his signature.