This story has been updated to include an additional statement from Stem.
The owner of an adult-use marijuana shop filed suit Friday against Haverhill, saying the company should not pay “community impact” fees unless the city proves the added cost of hosting cannabis businesses.
Stem, which opened nearly a year ago at 124 Washington St., asked Essex County Superior Court to make Haverhill “provide the required documentation and substantiate the fee,” allow the court to hold the fee until the matter is resolved and prevent the city from recovering certain legal costs. Haverhill Mayor James J. Fiorentini disputes Stem’s contention the city must justify the fee and argues Haverhill gave the store a downtown monopoly in exchange for the agreement.
“They wouldn’t be there had they not come in and voluntarily said they wanted to pay and agreed to pay a community impact fee. It says we can use the money for anything we want,” the mayor told WHAV.
Massachusetts law allows communities to charge an impact fee “reasonably related to the costs imposed” of up to 3% of a marijuana retailer’s gross sales for up to five years. The law adds the fee “shall be documented and considered a public record.”
Stem’s Caroline Pineau said her company is willing to pay, but detailed her concerns in a statement Wednesday.
“When we signed our Host Community Agreement with the city we full expected that the impact fees would be properly documented and would be reasonably related to our operations, as required by law. We have never said we will not pay the fees. We are simply asking that the city act in compliance with the law. Stem already pays hundreds of thousands dollars directly to the city in the form of sales taxes. If the city wants more it should be required to follow the law,” she said.
Fiorentini said the city will “vigorously defend” itself and also seek to collect late penalties if the fees aren’t paid. He added the city needs the money to balance its budget during these difficult times and cannot forgo collections since every marijuana shop in the state would follow suit.
“I find it very, very sad that a company that went downtown—as far as we know, the only company in the whole state allowed to locate in a downtown area—and comes in and files a lawsuit,” the mayor added.
In the lawsuit, Stem also argues it need not reimburse the city for legal fees that arose when the Haverhill defended a Land Court lawsuit brought by Stavros Dimakis of Mark’s Deli and Realtor J. Bradford Brooks and Lloyd Jennings, owners of 128-130 Washington St. The city won the first round that appeared to center on the trio’s opposition to Stem. An appeal is underway with a hearing planned for next month. Stem, however, argues the Land Court suit related to the city’s overall marijuana zoning plan and not Stem’s store.
Stem also told the court it also needs the documentation to support its annual license renewal before the state’s Cannabis Control Commission. Haverhill City Solicitor William D. Cox Jr., however, told Stem in February the city is still compiling data. He advised the business may still file its renewal since “other cities and towns have also not provided such specific documentation.”
Cox said there have been impacts on city administration, fire, police, health, public works and schools. He wrote, “The additional marijuana retail shops require us to do a detailed youth drug use survey in order to be able to document and address these issues with appropriate staff, including those to provide drug counseling.” Cox said the city is still arranging for those services.
Questioning of community impacts from such retailers has been gathering steam for several months. Back in January, Northampton was the first in the state to waive a community impact fee.
No trial date has yet been set.