Three Newton marijuana dispensaries—Garden Remedies, Ascend, and Redi—have threatened to sue the city to win back community impact fees they have been required to pay, according to a citywide email from Newton Mayor Ruthanne Fuller.
“Skipping payments and/or attempting to claw back prior payments are clear violations of the HCAs and a breach of contract,” Fuller wrote. “The Newton Law Department will vigorously defend the legality of our signed agreements.”
According to Fuller’s weekly update, these fees are outlined by a host community agreement (HCA), which is a requirement under state law for any marijuana business to conduct business in any city or town.
“Under state law and through these HCAs, cities and towns collected community impact fees of up to three percent of each business’s gross sales,” Fuller wrote.
All three establishments agreed to the costs originally and remain within the eight-year window in which a city can collect community impact fees, wrote Fuller.
“The three businesses agreed to the amount of the community impact fees and clearly acknowledged that the fees were not only reasonable but also directly proportional to the costs of addressing the potential health, safety, and other effects or impacts of marijuana on the community,” Fuller wrote.
According to Fuller, the three businesses are asserting the fees were illegally collected, arguing that sufficient updates were not made to their agreements after the Massachusetts Cannabis Control Commission made amendments to the state law in 2022.
Fuller said the city’s existing contracts with those businesses must be upheld.
“That change in law did not affect the City’s rights nor the obligations of Garden Remedies, Ascend, and Redi to pay agreed upon impact fees under their HCAs,” Fuller said.
Earlier this year, a marijuana retailer called Caroline’s Cannabis won more than $1.1 million from the town of Uxbridge, Mass., in community impact fees, 80 percent of the total fees it paid to the city. It claimed in court that it was entitled to that money because the store had not made an impact or imposed costs on the town.
State law says cannabis retailers can recover damages if they believe the municipality is demanding unfair fees.
“If a licensee believes the information documented and transmitted by a host community is not reasonably related to the actual costs imposed upon the host community … the licensee may bring a breach of contract action against the host community and recover damages,” the law reads.
Talking Joints Memo, a Cannabis-focused media outlet, published an article in response to Fuller’s update. The article’s author, Chris Faraone, responded to Fuller, criticizing Newton.
“For years, companies have complained of abuse and even extortion at the hands of city and town halls, but the adjustments put in place are meant to prevent officials from abusing canna businesses in their fiefdoms,” Faraone wrote.
These collected fees, per Fuller’s update, have already been spent in organizations across the city.
“The City of Newton spent these funds, in accordance with Massachusetts law, to address the increase in community need for services of our police, health, public works, and schools; for drug abuse and prevention services, as well as mental health services as a consequence of the operation of the marijuana businesses.” Fuller wrote.
Newton has benefitted from the revenue it gets from cannabis retailers, Faraone said.
“With more than half-a-million local tax dollars a year coming from weed plus millions more in other perks paid for by canna companies, her administration has learned to lean hard on marijuana when it’s time to write the city budget,” Faraone wrote.
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