Mellow Fellows Attorney Slams Impact Fees, Says Host Community Agreements ‘Not Even Close to Working’

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The new attorney hired by the Haverhill trio known as the Mellow Fellows was in Boston Monday to testify on Beacon Hill asking lawmakers to allow the Cannabis Control Commission the explicit authority to regulate the Host Community Agreements marijuana shops must sign before opening up shop.

Retained by Phil Brown, Tim Riley and Charles Emery, Jim Smith of Boston’s Smith, Costello and Crawford, spoke before the Joint Committee on Cannabis Policy Monday to argue against the community impact fee that businesses must pay to the cities where they do business. In Haverhill, for example, retailers have thus far agreed to pay three percent of gross proceeds for a period of five years when inking HCAs with Mayor James J. Fiorentini.

“Simply stated, they don’t work. It is not working; it isn’t even close to working. Your statute is very specific….it says that the community impact fee shall be reasonably related to the cost imposed upon a municipality. That is not happening. It also says that it should be no more than 3 percent of gross sales. That is not happening. In fact, nothing in this section of the law is being respected,” the State House News Service quotes Smith as saying.

State law requires applicants for marijuana business licenses to enter into agreements with host communities before the CCC will consider an application. The law stipulates that those agreements cannot run for more than five years and that the community impact fee paid to the municipality by the licensee cannot exceed three percent of the establishment's gross sales.

Smith said he’s had clients who have been pressed to sign HCAs that call for a four percent impact fee, require an up-front payment to the town and that require the business to make “voluntary” donations to various town organizations.

So far, the three shops granted special permits—Stem, Full Harvest Moonz and CNA Stores—have all agreed to make $25,000 annual payments to charity, with Full Harvest and CNA making an additional payment to Haverhill Public Schools for anti-drug awareness education.

Last August, the CCC voted down a proposal to include a review of host community agreements as part of its licensing process and the agency determined that it lacks the legal authority to intervene or reject an application based on the HCA. The CCC made a formal request that the Legislature amend the law to give it the power to review and regulate the contracts in January.

The CCC did not submit testimony to the Cannabis Policy Committee on Monday. Commissioner Shaleen Title, who led the push last summer to have the CCC review HCAs as part of the licensing process, submitted testimony on her own behalf.

“From my perspective as a commissioner appointed for expertise in social justice, the lack of enforcement of the legal limitations of host community agreements is a major barrier to entry for small businesses,” she wrote.

After hearing about 90 minutes of testimony Monday on the issue of HCAs, committee co-chair Sen. Sonia Chang-Diaz said she is “hardpressed ... not to conclude that host community agreements are a significant barrier to the social equity goals” of the state’s marijuana law.

Smith plans to represent the Mellow Fellows when they appear before the Haverhill City Council on Tuesday, Aug. 20. The other marijuana shop hoping to win approval to do business in Haverhill, Haverwell Market, will also be heard in a separate special permit session that night. Both sessions are open to the public and begin at 7 p.m. in the City Hall auditorium, 4 Summer St., Haverhill.

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