Gov. Charlie Baker yesterday signed a comprehensive cannabis regulation law that is the most significant change to Massachusetts cannabis law since the legalization of adult-use marijuana in 2017.

The legislation (Chapter 180 of the Acts of 2022) comes after more than a month of negotiations between the House and Senate. The governor vetoed one section that was added by a House-Senate conference committee relative to studying medical marijuana in schools.

A number of the new law’s provisions affect municipal host community agreements. The law eliminates the inclusion of community impact fees in host community agreements after the first eight years of a licensee’s operation.

The law is also likely to retroactively subject existing host community agreements to scrutiny by the Cannabis Control Commission, a major concern for the MMA and local officials. This is due to the CCC’s new authority for review and approval — not only at license application but also at each license renewal. Given that more than 1,000 host community agreements are currently in effect, the MMA and local officials argue that this language could result in significant and costly legal challenges.

Additionally, the CCC will now review, within 90 days, each new host community agreement, which the MMA argues will cause unnecessary delays and provide disincentives to bring the legal cannabis industry to many cities and towns in Massachusetts. The MMA has expressed strong concerns about these provisions in letters to the House, Senate, conference committee, and Gov. Baker.

The law calls for the CCC to promulgate regulations to establish minimum standards for host communities to promote and encourage full participation in the cannabis industry by people disproportionately harmed by the War on Drugs. To enter into an agreement with a marijuana establishment or medical marijuana treatment center, municipalities must establish said procedures or policies. Cities and towns currently under agreement with marijuana establishments must establish such standards and policies or risk penalties totaling any received community impact fees from marijuana establishments.

The law includes several provisions that were strongly supported by the MMA, including the capitalization of a new Cannabis Equity Fund and other measures addressing the societal inequities worsened by the War on Drugs. Individuals with previous criminal records related to the possession or cultivation of amounts of marijuana that have since been decriminalized would be able to petition for their expungement under the law. The law codifies a new process for municipalities to allow on-site consumption of marijuana, which had previously been prohibited.

The law also mandates that 15% of the revenue collected by the Marijuana Regulation Fund be transferred to a Cannabis Equity Trust Fund to encourage participation in the industry through grants and loans to entrepreneurs from communities that have been disproportionately harmed by marijuana prohibition and related enforcement.

The law provides an incentive for municipalities to host marijuana retailers that are social equity businesses, by distributing 1% of the total sales price received by such businesses back to cities and towns that host them. Each municipality that hosts at least one social equity retailer would qualify to receive this funding.

Gov. Baker vetoed a section of the bill that would have directed the CCC to study the possession and consumption of medical marijuana at schools by students with valid registration cards, stating that possession of marijuana on K-12 school grounds would be unlawful.

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