On September 8, 2023, the Cannabis Control Commission (“CCC”) held a hearing to discuss its proposed regulations, which were published in the Massachusetts Register on August 16. The regulations, which we discussed in a previous post here, fundamentally change the rules regarding Host Community Agreements (“HCAs”). The new regulations, if adopted as expected, will:
- Require all license applicants and existing licensees to include copies of their HCAs as part of any initial and annual renewal applications to the CCC filed on or after May 1, 2024.
- Require the CCC to review all HCAs for compliance with the new HCA law (which took effect in November of 2022) and CCC regulations within 90 days of receipt.
- Authorize the CCC to reject HCAs that are non-compliant with the new HCA law and CCC regulations.
- Require any host community seeking to collect community impact fees from a licensee to first submit the invoice to the CCC for review and certification for compliance with the new HCA law and CCC regulations, which require that all community impact fees be “reasonably related” to the operation of the establishment.
- Authorize the CCC to impose fines up to $50,000 per violation and other penalties on host communities that fail to comply with G.L. chapter 94G and/or CCC regulations.
- Authorize a municipality to refuse to amend its HCA, and for the company seeking renewal to apply to the CCC for “equitable relief” from the requirement that it have a valid HCA at all times.
There were a variety of voices at the hearing on Friday with public commenters expressing opinions on several aspects of the proposed regulations. In particular, many public commenters expressed strong opinions on the question of whether proposed regulations governing HCAs should apply retroactively (i.e., apply to HCAs in existence prior to the promulgation of the final regulations) or whether they should apply only to HCAs executed after the regulations are promulgated. The Massachusetts Municipal Association and representatives from multiple cities and towns including Athol, Brookline, Medford, Pittsfield and Rockland advocated for the latter approach. These commenters recommended that the CCC adopt a “two-tier” system that would exempt existing HCAs and apply the new HCA rules to only HCAs executed after the effective date of the regulations. Perhaps foreshadowing future legal challenges, several commenters stated that “retroactive” application of the proposed regulation would invite litigation.
As a result of the robust public response to the proposed regulations, the CCC will be holding additional public meetings over the next two weeks to discuss the proposed regulations and comments from the public and stakeholders.
The CCC must adopt final regulations prior to November 9, 2023. Final regulations from the CCC, which may include substantive changes to the proposed regulations, become effective when published in the Massachusetts Register. The Massachusetts Register is published every two weeks. Stay tuned for the latest updates, and reach out if you have questions regarding conversations with your host municipality.