The City of Haverhill has received just over a million dollars in so-called “cannabis impact fees” since the city’s first retail shop opened in May of 2020, but just three of the city’s four retail businesses have contributed.
According to city records provided by Mayor Melinda E. Barrett’s office, the total received in five years is $1,016,098. CNA Stores made one payment of $176,864 on Dec. 29, 2021, a year after the store opened at 558 River St. Full Harvest Moonz, 95-101 Plaistow Road., has made two payments, $314,246, one a year after it opened and then $250,000 last September when it “settled,” as the city describes it, and renewed its host community agreement for a total of $564,246.
Stem Haverhill, 124 Washington St., made three payments totaling $887,488 beginning a year after the store open in May 2020. As WHAV reported first last November, owner Caroline Pineau settled a high-profile court case and won back $612,500 this past January after suing Haverhill in a case that revolved around how the city calculated cannabis impact fees and how they were assessed.
In the meantime, Mello, 330 Amesbury Road, has paid no impact fees since opening at the end of 2021, and its license with the state’s Cannabis Control Commission is in limbo as the company has not yet submitted a new host community agreement to the state, the Commission told WHAV. It is not clear what efforts the city is making to collect from the store.
Decreasing fees is also putting at risk the city’s contract with NFI, a local social services agency, to run a comprehensive cannabis abuse and intervention program.
Both city officials and store owners have been closed mouthed about both the status of their host community agreements with the city and their payment obligations in the past and going forward.
In a separate story today, WHAV reports the state has problems of its own—failing to collect about $550,000 in prorated license fees and up to $1.2 million in potential provisional licensing fees from cannabis stores.
Christine Lindberg, Barrett’s chief of staff, confirmed that the city is aware both CNA Stores and Mello are operating with technically expired host community agreements and the city is actively negotiating with both to hash out new agreements so they can renew their state licenses.
Full Harvest Moonz negotiated a new host community agreement which went into effect Sept. 1, 2024 and runs for five years, city records show. Stem Haverhill negotiated a new host community agreement that runs three years beginning last November. Pineau said she is barred from discussing impact fees following her legal settlement. As WHAV reported earlier, Stem is paying the city $6,000 a year for two city-owned parking spots behind her downtown Washington Street store.
Julio Melendez, Mello’s store manager, said he couldn’t speak about his store’s situation. An executive with CNA Stores confirmed his company had negotiated an extension for its license with the state, but said he could not speak further because a new host community agreement is being negotiated with the city.
When the state first legalized marijuana for recreational use in 2016, cannabis retailers were asked to pay the impact fees to help mitigate anticipated social issues caused by cannabis use. But the fees, generally calculated as up to 3% of a business’s gross sales with documentation, proved unpopular with business as some cities and towns spent the money on items not directly related to cannabis consumption and some retailers failed to pay at all, according to the spokesman for the Commission.
Following a series of public hearings and a vote of the state Legislature, impact fee regulations changed a year ago. Under the new rules that went into effect March 2024, retailers still must negotiate host community agreements but communities cannot request contributions to charities or use impact fees for items such as a new police cruiser, street paving and school drug mitigation counselors as has happened in other communities. Only the actual cost for services a community supplies to cannabis businesses can be invoiced.
Though both CNA Stores and Mello are operating with expired host community agreements, they are in no danger of losing the right to operate a cannabis business, the Commission said, since every cannabis store must have a “compliant” host community agreement with its city to have its license renewed. He said many stores in the Commonwealth are experiencing delays in negotiating new agreements and the Commission is working with them to get those agreements filed while the businesses stay open.
The state body calculates the current value of the cannabis industry in Massachusetts at $5 billion.
CNA Stores’s expired Dec. 18, 2024 and the retailer was given a 120-day extension by the state to negotiate a new agreement with the city earlier this month. Mello, whose agreement expired this past Jan., 4, has submitted a renewal application to the state, but did not supply an updated host community agreement. The Commission subsequently sent a formal “request for information” earlier this month asking the retailer to supply its new agreement with the city.
Lindberg of the mayor’s office said Haverhill is facing a difficult decision with the anticipated decrease in cannabis impact fees because more than half the money the city has received thus far, $652,786, has been used to pay for a contract with NFI, a local social services agency, to run a comprehensive cannabis abuse and intervention program. The balance, she said, was used to pay legal fees when Stem Haverhill sued the city.
“Right now, we have been negotiating to see if we can find another source of funds for the cannabis abuse intervention program because it has been important to the city,” Lindberg said.