This week the Massachusetts Legislature passed legislation that will have sweeping reforms to the Commonwealth’s cannabis industry. An Act Relative to Equity in the Cannabis Industry, which is expected to be signed by Governor Baker, will, among other things, limit the fees that municipalities can charge cannabis businesses as well as strengthen social equity programs aimed at helping entrepreneurs from communities that have been disproportionately impacted by marijuana prohibition succeed in the legal cannabis industry. For some businesses, as it relates to host community agreements, it can mean a three-percent improvement on their bottom line.
Some key takeaways of the legislation include:
- Cannabis businesses would be allowed to deduct certain operating expenses from their gross income for state tax purposes
- Limits community impact fees to a maximum of 3% of the gross sales of the marijuana establishment
- Prohibits host community agreements (“HCAs”) from including a community impact fee after the 8th year of operation
- Requires that the Cannabis Control Commission review and approve each HCA as part of a completed marijuana establishment license application and at each license renewal
- Creates a ballot initiative procedure for voters of municipalities to petition to allow for licensed marijuana social consumption establishments within their municipality
- The creation of a Cannabis Social Equity Trust Fund and a cannabis social equity advisory board
As always, Prince Lobel attorneys are happy to explain more about these and other changes in this constantly evolving industry. Please feel free to reach out to any member of the Prince Lobel Cannabis team.