September 12, 2018

Marijuana growers threaten lawsuit against CCC

Photo | Matt Wright
Marijuana plants growing at Sira Naturals' Milford facility.

An organization representing Massachusetts marijuana growers is considering a lawsuit to compel the Cannabis Control Commission to review the statutorily-required agreements between marijuana businesses and their host towns, something the CCC has resisted doing under the impression it does not have the authority to do so.

Peter Bernard, president of the Massachusetts Grower Advocacy Council, told the News Service on Tuesday that his outfit plans to discuss its proposed suit with its attorney on Wednesday and is leaning towards taking the issue to court.

"We just want them to review these going forward and strike down offending contractual clauses going backwards," Bernard said.

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.

In August, the CCC voted down a proposal to include a review of host community agreements as part of its licensing process, with Chairman Steven Hoffman arguing that the CCC lacks the legal authority to intervene or reject an application based on the host community agreement.

On Tuesday, appearing on WGBH's "Boston Public Radio," Hoffman said the law is "explicit up to a point" when it comes to what can or cannot be part of a host community agreement, specifying that the community impact fee must be limited to 3 percent of gross sales.

"What else can be included in the agreement is not quite as explicit and so some cities and towns are asking for quote voluntary donations. There's some concern we have," Hoffman said. "To the extent that we think there is abuse, as we said at our last meeting, we will go back to the Legislature with evidence and say, 'we think you probably need to tighten these standards a little bit about what is allowable.'"

Hoffman's previous suggestion that the law is not clear enough and needs clarification led Marijuana Policy Committee Chairman Rep. Mark Cusack to say the issue "has less to do with ambiguity than it does reading comprehension." His co-chair, Sen. Patricia Jehlen, said the CCC's decision not to review the agreements meant "any enforcement of the law will be left to the courts."

That's exactly what Bernard and the Grower Advocacy Council have in mind. Bernard told the News Service on Tuesday that "it's going to take a judge to sort it out, and we don't see anyone else stepping up."

"We see the issue of sticking to the law on this as important because without oversight a town can extort an applicant, or an applicant with money can make bribes, all out in the open," Bernard said. "Lack of oversight is causing economic empowerment applicants and small businesses to miss out."

During his appearance on "Boston Public Radio" on Tuesday, co-host Jim Braude asked Hoffman about the likelihood of legal action against the CCC.

"I think from day one there's been likelihood of litigation," Hoffman responded.

Once Braude clarified that he was asking specifically about litigation around the CCC's decision not to review host community agreements, Hoffman said, "Yeah, I think it's possible. I'm not going to go any further than that, but it's possible."

Before voting 4-1 in favor of not reviewing host community agreements, some commissioners said they were concerned that making the review part of the commission's licensing process would open the young agency up to legal challenges and further delay the launch of an industry for which nearly 1.8 million residents voted for almost two years ago.

"I have concerns that if we start going into these HCAs, that we are going to be sued, that we are going to delay the process, that a simple anticipated hour of inspection, if we don't get it right then we're going to come back and be told we didn't do it right," Commissioner Jennifer Flanagan said at an August meeting of the CCC.

The CCC had hoped to launch the retail marijuana industry in Massachusetts by July 1. Hoffman and CCC officials have refused to provide an updated timeline for when consumers will be able to legally buy marijuana.

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