By a 121-33 vote, the House on Feb. 5 passed a fast-moving bill that would change the state marijuana law to restrict host community agreements – the contracts negotiated between a municipality and a marijuana establishment or medical marijuana treatment center.

The bill – strongly opposed by the MMA – would authorize the Cannabis Control Commission to review, regulate and enforce all host community agreements.

It would also limit an agreement’s “community impact fee” to one five-year period, and would count all payments and obligations made by a marijuana establishment or medical marijuana treatment center – including, but not limited to, monetary payments, in-kind contributions and charitable contributions – toward the community impact fee, which would be capped at 3%.

The bill would make any other contractual financial obligation that is explicitly or implicitly a factor considered in, or a condition of, a host community agreement unenforceable. The bill, however, would not preclude a marijuana establishment or medical marijuana treatment facility from voluntarily making in-kind or charitable contributions to organizations after the execution of the host community agreement.

Under the bill (H. 4398), the terms related to the community impact fee would be severable. If a term or condition of the community impact fee is invalidated by the Cannabis Control Commission, the remaining provisions would remain in effect, and no applicant would be denied a license on the sole basis of an invalid term or condition related to the community impact fee.

The host community agreement itself could be waived at the discretion of the host community with the approval of the Cannabis Control Commission.

When introducing the bill on the House floor, the chief sponsor said the current state marijuana law made clear that municipalities may not charge more than 3% for a community impact fee or other fees associated with siting a marijuana establishment.

A March 2019 report from the Cannabis Control Commission to the Legislature, however, states that the law “does not currently prohibit municipalities from charging fees authorized under state law in addition to the 3% community impact fee.”

In a letter to House members prior to the vote, the MMA said the bill would interfere with local authority. The letter urged legislators to talk with their local officials, as the bill could interfere with nearly 700 existing host community agreements, inviting legal challenges, confusion and delays.

“Contracting between local governments and private entities is a long-established practice, and the changes reflected in this bill could have a long-term impact on the ability of municipalities to contract freely, even outside of the marijuana industry,” the MMA wrote. “Ironically, passage of this measure to make it more difficult for cities and towns to ensure adequate consideration and resolution of public interest concerns could lead the residents in some cities and towns to call for further limits on the number of marijuana establishments allowed in their communities.”

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