Applicants & Licensees / Host Community Agreements
Host Community Agreements
Under state law, Marijuana Establishments (ME) and Medical Marijuana Treatment Centers (MTC) must execute Host Community Agreements (HCA) with the municipalities in which they plan to operate.
Basic Terms and Conditions
The HCA identifies the stipulations and responsibilities of both the municipality and the applicant or licensee.
The Commission encourages municipalities to carefully consider the impact of the particular Marijuana Establishment proposed for a community, as well as benefits it may bring in local revenue and employment, when negotiating a Host Community Agreement.
While the two parties may agree on a wide range of terms and conditions, the following are possible provisions that may be outlined in the agreement:
- The HCA may contain a provision that the ME or MTC must make jobs available to residents of the municipality. While residency may be one of several positive factors in recruitment, it should not prevent the ME or MTC from hiring the most qualified candidates or hinder compliance with Massachusetts Anti-Discrimination and Employment Laws.
- The HCA may include terms for the ME or MTC to provide paid police detail for the purposes of traffic and crowd management during peak hours of operation.
- The HCA may identify the type of security system required for controlling access to areas in which Marijuana or Marijuana Products are kept. Possible methods include a keypad or electronic access card system.
- The HCA may include the steps that an ME or MTC must take if it wishes to relocate within the municipality.
- The HCA may include stipulations if the ME or MTC wishes to terminate the agreement with the municipality.
- The HCA may outline details of how the ME or MTC will assist with community support, public outreach, and employee outreach programs.
- The HCA may identify how the ME or MTC will work with the municipality to provide municipal-sponsored educational programs.
Optional Local Taxes
In addition to the mandatory 6.25% sales tax and 10.75% excise tax on marijuana and marijuana products, municipalities may impose an optional 3% local tax as part of the HCA. The tax may be applied to adult-use retail sales only.
Community Impact Fees
An HCA may include the terms of an optional community impact fee. The fee cannot total more than 3% of the gross annual sales and must comply with applicable legal requirements.
Community impact fees are limited to a period of five years, although the parties may consider negotiating a shorter duration. At the close of the term, the parties may negotiate terms of a new community impact fee, which is also capped at five years.
The community impact fee must be reasonably related to the costs imposed upon the municipality by the operation of the ME or MTC. Municipalities must demonstrate how the proposed fee will cover anticipated costs and should not rely on the community impact fee as a revenue generator.
Possible costs included in community impact fees may include, but are not limited to:
- Municipal inspection costs;
- Traffic intersection design studies;
- Public safety personnel overtime costs;
- Environmental impact studies; and
- Substance abuse prevention programming.
If a municipality seeks to impose a fee that may be characterized as a fee, donation, or gift, including any assessment above the 3% community impact fee, it must comply with the legal requirements for regulatory fee.
Guidance for Municipalities
Municipalities should be aware that the negotiation of HCAs may be subject to scrutiny by federal and state law enforcement agencies. The Massachusetts Office of the Inspector General can advise municipalities on whether the terms and conditions of an HCA are compliant with state law. Municipalities are strongly encouraged to seek legal advice from a licensed attorney regarding HCA negotiations.
Guidance for Applicants and Licensees
MEs and MTCs are also strongly encouraged to seek legal advice from a licensed attorney regarding HCA negotiations.
For More Information
If you have additional questions regarding host community agreements, please contact us at Commission@CCCMass.com or (774) 415-0200.
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