August 29, 2018

Frustrated lawmakers urge CCC to review municipal agreements with marijuana companies

Photo | State House News Service
Sen. Patricia Jehlen and Rep. Mark Cusack, co-chairs of the Marijuana Policy Committee.

As the Cannabis Control Commission weighs asking legislators to revisit the marijuana law to clarify requirements related to the agreements marijuana businesses are required to enter into with their host municipalities, the two lawmakers who wrote the law say no such fix is necessary.

The CCC has been wrestling with host community agreements for weeks as entrepreneurs and marijuana advocates point to the contracts as a reason for the slower-than-anticipated rollout of the retail marijuana market.

Because the CCC will not consider a license application until a host community agreement has been executed, businesses and advocates say municipalities are using the required agreements to extract more than 3 percent of the marijuana business's gross sales, the cap in place under the law.

At last week's meeting, the CCC voted down a proposal to include a review of host community agreements as part of its licensing process. Chairman Steven Hoffman said the CCC's general counsel ruled that the agency does not have explicit authority to intervene or reject an application based on the host community agreement. He added, "It is very clear in my mind that this is ambiguous and undetermined whether we have the legal authority."

Hoffman said his biggest concern is that "there is ambiguity" and suggested the ambiguity suggests that there is "an issue of clarity in the legislation."

Rep. Mark Cusack, House chair of the Marijuana Policy Committee and one of the law's authors, said the Legislature's intent was to have the CCC ensure that host community agreements comport with the requirements of the law, including the 3 percent cap.

"I think this has less to do with ambiguity than it does reading comprehension," he said. "Simply put, it is part of the licensing requirements. So it would be our understanding that they would be making sure the host agreements are compliant with the law they're in charge of overseeing and implementing, and not just check a box that they have an agreement."

Cusack said last week's vote to not review host community agreements as part of the licensing process was "disappointing and frustrating" and added that commissioners "have taken a vote to not do part of their job."

"There still seems to be a lack of urgency of getting these (retail stores) open," he said.

Sen. Patricia Jehlen, the Marijuana Policy Committee's Senate co-chair, said she is concerned that if the CCC does not enforce the law, particularly provisions like the 3 percent cap on community impact fees that are intended to make the market accessible to businesses of all sizes, the illicit market for marijuana "will continue to thrive."

"The intent of the law was to reduce the illicit market, and to give opportunity to local entrepreneurs. If the CCC doesn't enforce the law, both goals will be undermined," the senator said in a statement. "It's concerning that the CCC doesn't believe that it has any ability to review the municipal agreements in any way. Apparently any enforcement of the law will be left to the courts."

She added, "Rep. Cusack and I have clarified the intent of the law, to limit the payments cities and towns can require."

Officials from the CCC were not made available to the News Service on Tuesday and the commission declined to make an on-the-record statement.

Cusack and Jehlen sent the CCC a letter in July "very clearly laying out the intent and what the law says, and they are fully empowered by the statute to review these and enforce them," Cusack said.

In the letter, Cusack and Jehlen wrote that it was their "interpretation, and intent, that the CCC has the authority and is required to therefore review any such community host agreements to ensure their compliance with statute."

"Given these statutory underpinnings, it is our hope that the CCC will ensure the conformance of these laws with respect to issuing any such licenses to prevent municipalities from using community host agreements as a form of prohibition," the co-chairs wrote in July.

Cusack said he was frustrated by last week's CCC debate and vote because commissioners did not discuss the guidance he and Jehlen sent them in July and did not talk with him about it before suggesting that the commission might ask legislators to revise the law.

He said he has spoken with CCC Executive Director Shawn Collins multiple times and said he "stand[s] ready to work with the commissioners if there is such ambiguity and they need clarification."

Commissioner Shaleen Title, a longtime marijuana activist who was the lone vote in favor of reviewing host community agreements as part of the licensing process, said she viewed the vote as "possibly the most significant decision we're going to make in terms of how we affect what happens with this industry."

During last week's debate, other commissioners said they were concerned that reviewing host community agreements as part of the commission's licensing process would open the young agency up to legal challenges and even further delay the launch of an industry for which nearly 1.8 million residents voted for almost two years ago.

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