Consultant for planned Lanesborough pot shop questions proposed benefit payment

Posted Wednesday, July 17, 2019 7:00 pm

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LANESBOROUGH — A New York City chocolatier might reluctantly agree to Lanesborough's terms to open a retail recreational marijuana store on Route 8.

The cannabis consultant for Lev Kelman said he believes his client will sign two host community agreements the Select Board unanimously approved Monday, including a local community benefit payment on top of the 3 percent municipal tax the state allows on all cannabis-related operations.

The documents still need Kelman's signatures so he can seek final municipal approval as well as two state licenses, one each to operate a marijuana manufacturing facility and retail store at the former Arizona Pizza restaurant across from the northern exit to the Berkshire Mall.

Consultant Ezra Parzybok, of Northampton, says the proposed 2 percent community benefit payment on gross annual sales of marijuana and marijuana products is tantamount to a third tax not being assessed in neighboring Pittsfield.

Parzybok says the added levy would put Kelman's pot shop at a competitive disadvantage with municipalities charging the standard local fees and taxes outlined in the state's marijuana retail regulations.

"It is unfortunate but the cost of the additional 2 percent tax will be passed on to the consumer and that it potentially conflicts with state law," he wrote The Eagle in an email.

Lanesborough officials say their town counsel, KP Law of Boston, proposed the community benefit payment.

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Parzybok and Kelman weren't present Monday night when the Select Board finalized the host community agreement, which includes the standard 3 percent annual community impact fee on gross sales of all marijuana and marijuana products.

In addition, state regulations allow cities and towns to assess up to a 3 percent tax on retail sales only. Lanesborough voters approved a 3 percent sales tax at a special town meeting two years ago. All told, Lanesoborough would collect 8 percent in taxes/fees on retail; 5 percent on manufacturing. That compares to the typical 6 percent and 3 percent, respectively, in other communities.

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Lanesborough's stiffest competition for retail marijuana revenue dollars would come from Pittsfield, which only assesses the 3 percent community impact fee and an annual 3 percent tax or flat fee on retail sales, whichever produces the least revenue.

Lee, Williamstown and Great Barrington are the other Berkshire towns with retail recreational marijuana stores.

The Lanesborough Select Board has justified the added 2 percent fee/tax, in part, to capitalize on the initial public demand for recreational marijuana in the Berkshires. The board at its Monday meeting noted the $535,000 in local revenue that Great Barrington raked in from April 1 to June 30 from sales at Theory Wellness, the county's first retail pot shop.

"I doubt we'll see that kind of traffic here," said Chairman John Goerlach.

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"I doubt that, too," added Selectman Henry "Hank" Sayers.

Kelman, under the name Royal Hemp LLC, plans to manufacture and sell cannabis-infused chocolate at the vacant, 3,135-square-foot Arizona Pizza building. Royal Hemp has bought the eatery, which closed in February 2018.

Since the proposed shop location is zoned for recreational marijuana production and retail, no special permit is needed.

But Kelman still must submit a site plan to the Planning Board for approval before he can apply for two licenses from the Massachusetts Cannabis Control Commission.

Kelman is no stranger to pot-related products. He told the Select Board in March that he uses medicinal marijuana, and four years ago he began selling hemp chocolate bars at his store, Brooklyn Dark in New York City, which he opened in 2011.

Dick Lindsay can be reached at rlindsay@berkshireeagle.com and 413-496-6233.