Massachusetts’ mandated “host community agreements” (HCAs) between municipalities and marijuana businesses are under intense scrutiny, with cannabis companies complaining they are unfair and costly and federal prosecutors reportedly investigating their terms.
This article by MJ Biz digs deeper into the HCA issue and reports…
What chafes marijuana companies is that most municipalities have demanded the maximum 3% of gross sales as a community impact fee without evidence of actual costs, plus tens of thousands of dollars of “donations” and other payments.
Industry officials say the practice has had profound business impacts:
- Cannabis companies have been faced with the decision to pay to play or walk away.
- The agreements, in part, slowed the development of Massachusetts’ recreational cannabis market. Today, more than a year after the launch, just 33 rec stores have been licensed, resulting in little competition and high product prices.
- Some say the lack of a robust market also has made it more difficult to stamp out illicit sales.
“I don’t know of any other industry except for gaming that has to pay a legalized extortion fee to open in the community,” said David O’Brien, president and CEO of the Massachusetts Cannabis Business Association, which has around 300 members.
Learn more by reading the full article at
Federal prosecutors, industry probe municipal cannabis agreements in Massachusetts