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Massachusetts Cannabis Control Denies Proposal to Review Host Community Agreements

August 30, 2018

Last week, the Massachusetts Cannabis Control Commission voted down a proposal that is now causing controversy in their newly established cannabis industry. The proposal would require the Massachusetts Cannabis Control Commission to review host community agreements to ensure that companies were paying no more than 3% of annual revenue and that the agreement was for no longer than five years.

Payment Caps

Massachusetts law caps payments and term length for cannabis companies but has no way to enforce this law if the Massachusetts Cannabis Control Commission refuses to review the agreements. The proposal was sponsored by Commissioner Shaleen Title but was voted down 4-1 by the panel.

Title’s proposed measure would have mandated reviews of all host community agreements and force the Massachusetts Cannabis Control Commission to reject licensing for companies who intentionally violated the payment caps and term length. In effective it would limit big cannabis companies from monopolizing certain cities and regions within the state and provide more opportunities for small businesses to be successful in the cannabis industry.

Authority of Cannabis Commission

Massachusetts Representative Mark Cusack noted that, “The law is clear and [the commission’s] authority is clear — they’re just choosing not to do an important step of the licensing process. They’re almost guaranteeing lawsuits by knowingly allowing illegal host community agreements.”

The Massachusetts Cannabis Control Commission is failing to provide the check balances necessary so that local small businesses have a shot at competing in the recreational marijuana market. Naysayers of the proposal cited the gray area of the state law, saying it doesn’t clearly grant the commission the authority to review the agreements.

Clarifying Jurisdiction

They are afraid of that passing such a measure could provoke further litigation prolonging the delay the beginning of recreational sales. It seems that they are more interested in passing the buck by recommending that the State Legislature pass a more stringent law.

It is unlikely that the Legislature will amend the law to clarify the jurisdiction of the  Massachusetts Cannabis Control Commission as it pertains to host community agreements. State Senator Patricia Jehlen is also worried that the lack of action will result in “small, local companies that can’t match the offers of large out-of-state corporations [to municipalities] will also lack the resources to bring suits.”