The Cost of Local Control in Mass G.L. c.94G §3

Chapter List

1. Criteria from the State (Cannabis Control Commission)

2. Municipal Zoning Requirements: Local Control

3. Local Control: A Case Study of the Town of Mansfield, MA

1. Criteria from the State (Cannabis Control Commission)

The Cannabis Control Commission (“CCC”) established four minimum standard criteria within a municipality which must be met to apply for a license to own and operate a Marijuana Establishment (“ME”). Those four factors are: (1) have real estate under control (2) must hold a Community Outreach Meeting, (3) must have a Host Community Agreement, and (4) a Plan on how one will comply with the municipality zoning codes, ordinances, and bylaws. Each of these four criteria must be met before ever applying for a license.

While the CCC has established minimum standards for zoning and operations, Municipalities (towns and cities) have the authority to regulate how cannabis businesses operate within their boundaries through amendments to their bylaws and by passing ordinances. Mass. GL. c.94G, §3 is titled Local Control and within its text, authority is given to towns and cities on deciding if marijuana can be sold, how it is sold, and any other “reasonable safeguards” provided they are not unreasonably impractical or are in conflict with the minimum standards set by the Cannabis Control Commission (“CCC”).

According to the CCC website municipalities can:

• Implement its own licensing process, as long as it doesn’t conflict with the state regulations.

• Allowed to pass bylaws and ordinances dictating time, place, type of “ME” and how business dealings should be done with marijuana accessories.

• May pass a law limiting the number of “ME”s to 20% the number of liquor licenses.

• May adopt an ordinance reducing the buffer zone from the standard set by the CCC.

• May regulate signage similar to the standard set for alcoholic beverages within the municipality.

In fact, according to the CCC site, Municipalities cannot do only two things:

1. Prohibit transportation of marijuana through their town or city AND

2. Cannot subject licensees to unreasonable or impracticable demands or require an increased investment of risk, money, time, and any other resource or asset.

And yet, with capital needs and limited financing already for licensees, additional regulations on top of the heavily restrictive state regulations can only create an increased amount of risk, time, and money. This creates an almost impossible path for the equitable eligible participants in the state.

1. Municipal Zoning Requirements: Local Control

Currently, there are 351 Municipalities in the state of Massachusetts and based on the CCC tracker. 199 have implemented some form of zoning in place which means there are 199 towns or cities where persons can open a cannabis business. It also means that there are 199 additional municipality regulations that licensees persons must navigate on top of the state regulations in order to complete the initial steps for (1) real estate, and (4) Plan to comply with municipality regulations prior to applying for a license.

The CCC has also listed 29 communities of disproportionate impact in the state, these are communities most impacted by the War on Drugs. The Commission is charged by state law to adopt procedures and policies to promote and encourage full participation in the regulated cannabis industry by individuals from communities disproportionately harmed by cannabis prohibition and enforcement and to positively impact those communities.

However, with highly restrictive regulations at both the state and local level, licensees are forced to heavily invest capital and time into which municipality to pursue for fear of rejection because of limited licenses, workable sites, or conflicting bylaws. It often forces licensees to consider their own hometowns and another less risky and less costly municipality. Can those the social equity programs aim to help actually succeed in this sea of regulation?

1. Local Control: A Case Study of the Town of Mansfield, MA

This research into confusing and often overlapping regulations creates an undue risk of time and certainly money for licensees. It can often take over a year just to complete the criteria to apply for a license only to be disqualified for a minor or misinterpreted municipality bylaw.

One example is the buffer zones. The CCC establishes in 935 CMR 500.110(3) that no Marijuana Establishment can be located “within 500 feet of a pre-existing school or private school providing education in kindergarten or any grades 1-12. This would not include Daycare centers in the state buffer zone regulations. However, the Town of Mansfield in their ordinance Article III $230-3.4 lists public/private schools AND Day-care centers. Additionally, the CCC measures from the center of the entrance of the “ME” to the center of the entrance to the school. However the town of Mansfield measures from the “parcel limits” or lot lines. An error in measurement could easily get a license application declined after a year of investment from licensees.

Using the Town of Mansfield’s Article III $ 230 zoning bylaws as an example, here are just some of the additional zoning requirements:

1. Article III § 230 3.4(L) Additional Buffer zone. “ME”s can only exist within the Marijuana Overlay District AND meet the 500 feet requirement from schools and daycare centers.

2. Article III § 230 3.4(L)6a Landscaping. All landscaping must conform with § 230 4.3.

3. Article III § 230 3.4(L)6b Parking. All parking shall conform with § 230 4.4

4. Article III § 230 3.4(L)6(d) Context Map. A map must be provided depicting all lots and land uses within a 500 foot radius of the center of the premises.

Finally, the town of Mansfield bylaws has a condition on the amount of licenses to approve based on the amount of non-profit medical marijuana establishments (“MME”) in the town. The town will not issue ME licenses more than the amount of non-profit medical marijuana establishments. This adds another layer of uncertainty on how many licenses, even in this narrowly approved district could be approved if any MME should close its doors.

Currently, one recreational license was able to open in Mansfield, MA. That license went to Releaf Alternative and owner Connor McLaughlin. An article in local news outlet, the Wicked Local, touches on a similar background among licensees. The owner, prior to opening ReLeaf Alternative, worked in finance with with Morgan Stanley and “He also works in commercial real estate” which helps with capital investment

The article further flags up the additional costs of doing business with the municipality including:

• “The host agreement stipulates that the town receives 3 percent of revenues and ReLeaf will donate $70,000 a year to local nonprofit organizations in town.” (See Kristen’s blog)

• “he recently ordered a traffic speed tracker which will be donated to the Mansfield Police Department as one of the mitigation requirements from the Mansfield Planning Board.

As illustrated in the Town of Mansfield’s bylaws, many municipalities have regulations that create barriers and uncertainty outside of the potential owner’s control into even completing an application for a license. On top of the barrier of uncertainty is also the barrier of capital. In order to comply with these regulations, it takes time and thus take money to hold on to real estate, do research into designs, meet with the planning board, and pay for the Planning Board requests for their town or city. And what can an owner do if ultimately the municipality won’t grant a license? Fortunately there are 198 additional municipalities with their own unique bylaws and ordinances forcing the potential owner to begin the process almost from the beginning again.