Recent developments in the Massachusetts cannabis industry, significant legislative changes, and legal actions have spotlighted the contentious issue of so-called community impact fees. These fees, which are intended to offset municipal costs associated with hosting cannabis businesses, have sparked debate regarding their fairness and implementation.
As noted in a May 2022 report on the topic by the Massachusetts Cannabis Business Association (MassCBA), such community impact fees have been a feature of so-called host community agreements in the Bay State since 2017, when the Massachusetts Legislature amended the voter-passed adult-use cannabis legalization act to authorize localities to collect a fee of up to 3% of a licensed recreational cannabis establishment's gross revenues so long as the charge is "reasonably related" to "costs imposed upon the municipality by the operation of the cannabis establishment." Such fees are imposed in addition to state and local sales taxes and the Massachusetts state cannabis excise tax, which already equate to a 20% tax rate.
The Massachusetts cannabis industry has long complained that impact fees are exploitative and of dubiousness necessity. The MassCBA report documented $53 million in collections from impact fees between 2018 and 2022 — with 41 of the 88 Massachusetts cities and towns that executed a host community agreement during the period (and which thus could have imposed a fee) declining to report data on funds collected.
Read more at regulatoryoversight.com