Our Opinion: Towns wrong to hit pot stores with fees

Posted Monday, August 5, 2019 5:45 pm

In crafting legislation governing retail marijuana sales in Massachusetts, the Legislature included a well-intentioned provision enabling municipalities to add a tax on sales to the contract retailers must sign to open a shop within a community. Lawmakers are confronting the law of unintended consequences triggered by the state marijuana law.

Municipalities are allowed to tax a retailer within their boundaries as much as 3 percent of a company's gross annual revenue for a period of five years. The law stipulates that these payments must be "reasonably related" to the actual costs to the town imposed by the marijuana facility. According to reports from the State House News Service and the Boston Globe, some towns are claiming the law does not prohibit them from requiring separate fees or mandatory "donations" to local nonprofits in exchange for approval. Many companies grudgingly pay fees they regard as extortion because they want to open for business in the community.

One of the goals of the marijuana law was to encourage mom and pop enterprises to establish retail shops, ideally in inner cities that have been victimized by the drug trade. This has not been happening as hoped, and it is not likely to if municipal fees on top of state taxes discourage these enterprises from getting into the field. The wealthier applicants, most of them veterans of the medical marijuana industry, may not welcome the additional fees but they are able to write them off as the cost of doing business in a community. It is also possible town officials opposed to marijuana retail shops could use these municipal fees and other requirements outside of the law to discourage shops from coming to their communities.

Lanesborough wants to impose a 2 percent tax on sales at New York City chocolatier Lev Kelman's planned retail marijuana store in the former Arizona Pizza restaurant on Route 8 on top of the 3 percent community impact fee allowed by law. This was done upon the recommendation of KP Law of Boston, the town's consultant, and Mr. Kelman, who wants to sell marijuana-infused chocolate products, has indicated he will pay the fee, although not happily. The town is being unfair, and the expressed desire of board members to capitalize on initial public demand for marijuana is not "reasonably related" to costs to the town related to the store. The Select Board should reconsider.

The provision enabling municipalities to impose taxes on pot retailers invites abuses that were not anticipated by lawmakers. It should be eliminated by amending the law, and if lawmakers don't want to take that step they should at least honor the request of the Cannabis Control Commission that the Legislature give the CCC the power to review all town contracts and block those requiring unlawfully high payments or making other demands in violation of state law.