Cities and towns looking to boost local revenues with new taxes from pot sales are increasingly taking a “proactive” approach toward bringing in recreational cannabis retailers — they’re advertising.
“It’s all about the money,” said Dartmouth Select Board member John Haran.
Dartmouth has opted for a public process in deciding how to dole out it’s three available licenses for recreational pot shops. Businesses are invited to submit applications through a so-called request-for-qualifications process by March 27.
A 24-page notice to potential business owners lays out what the town of Dartmouth is looking for in its host community agreement: A community impact fee equal to 3% of the establishment’s gross sales, $25,000 in annual contributions to local nonprofit organizations and $340,000 to town services over the first four years of operation.
“We are really in the early stages of rolling out a brand new industry in Massachusetts and communities are dealing with the issue — for the very first time — of trying to make the best decisions on behalf of their residents so as the industry matures, it does so in way that meshes best with interests and needs of the community,” said Geoffrey Beckwith, executive director of the Massachusetts Municipal Association. “Some communities may want a proactive approach.”
Dartmouth is hardly the first municipality to use the public bidding process to solicit applications. The southeastern Massachusetts town is following in the footsteps of the likes of Springfield, Amherst and Chicopee, to name a few.
The state’s budding recreational pot industry brought in more than $420 million in sales during its first full year in operation, generating more than $70 million in tax revenue.
Communities that play host to recreational pot shops stand to earn even more — they can levy an additional local-option sales tax of up to 3% in addition to hard-to-track “community-impact fees.” The local-option tax has delivered $9.2 million to host communities so far this fiscal year.
Dartmouth hasn’t yet enacted a local-option sales tax on marijuana, but it’s something select board members say they would be looking into.
“It’s an opportunity to pay down existing liabilities without increasing taxes,” Haran said.
As Dartmouth looks to bring in a marijuana retailer, Beacon Hill is taking a close look at host community agreements, including limitations on the kind of community benefits Dartmouth is looking for.
A bill already approved by the House would give the Cannabis Control Commission greater enforcement power over the host-community agreements that pro-pot industry activist Jim Borghesani said have become “absurd.”
“No other industry sees anything remotely similar to what the cannabis industry is seeing from communities seeking payments just so they can open,” Borghesani said. “The bill would limit the contributions communities can ask for.”
Cannabis Control Commissioner Shaleen Title said she supports the bill, adding that it would “make the process smoother.”
Beckwith, of the Massachusetts Municipal Association, however noted some opposition among cities and towns.
“If (communities) have less ability to make sure this industry, as it rolls out, meets residents’ needs and doesn’t create additional burdens — some of those communities might ask if they want to have retail cannabis business as an option.”
The first recreational cannabis stores didn’t open until Nov. 20, 2018 — more than two years after Massachusetts voters overwhelmingly approved a ballot measure legalizing the plant and recreational sales.
Vice Chairman of the Dartmouth Select Board Frank S. Gracie, who like Haran initially opposed legalizing pot, said he expects people to be “beating down our door,” to open up a cannabis retailer.
“We want a fair deal,” he said. “Good people with good business sense.”