MMA letter to legislative leaders outlining municipal concerns about recreational marijuana law

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The Honorable Mark Cusack, House Chair
The Honorable Patricia Jehlen, Senate Chair
Joint Committee on Marijuana Policy
State House, Boston
 
Dear Representative Cusack and Senator Jehlen,
 
On behalf of the cities and towns across the Commonwealth, the Massachusetts Municipal Association wishes to offer comments on Chapter 334 of the Acts of 2016, The Regulation and Taxation of Marijuana Act. Our comments are intended to provide an overview of local governments’ key concerns in response to the hearings held by the Joint Committee on Marijuana Policy over the past few months. The MMA wishes to be a strong partner and effective resource for the Legislature as you consider changes to the new law, so that the will of the voters can be implemented in the most effective and responsible manner possible, while concurrently embracing the operational and policy goals of citizens and elected representatives at the local level.
 
We wish to thank you for your dedication and openness to input from municipal officials and all stakeholders. You have listened to all parties, and we deeply appreciate your leadership.
 
It is important to emphasize that Question 4 prevailed and the issue of whether or not to legalize the recreational use of marijuana has been settled. Yet it is also clear that the new law has several significant drafting flaws that require fixing to prevent negative outcomes, as well as clarification to ensure that the stated intentions of the law are met. Just as the Legislature and governor acted in 1981 to amend Proposition 21⁄2 to make it workable, we believe it is both appropriate and necessary for lawmakers to take action to address the shortcomings in the Regulation and Taxation of Marijuana Act. Doing so would benefit the public interest and every community.
 
While there are many smaller details that warrant attention, there are several major problems that the MMA believes must be addressed. The issues most important to the MMA are: 1) changing the local control section to provide clarity and to allow cities and towns to opt-in to recreational sales, rather than maintaining the current, onerous process of opting out; 2) granting true independence to the regulatory bodies by adding CCC members and creating a statutory requirement that one of those members be a municipal representative, while also making changes to the Cannabis Advisory Board; 3) addressing the inadequate tax revenues written into the statute by increasing both the state and local revenue rates; and 4) the unregulated "home grow" provisions that could foster a new black market for marijuana sales.
 
Please Provide Clarity and Protect Local Control of Zoning Decisions
One of the primary issues within the Regulation and Taxation of Marijuana Act is the lack of clarity and the overrides of local decision-making processes inherent in the local control section. The new law prevents cities and towns from making local decisions on whether to allow commercial retail sales in their jurisdictions. It is clear that the marijuana industry lobbyists learned a lesson from Colorado, the first state to legalize recreational use. The Colorado law allows local governing bodies to choose whether or not their communities should allow the sale of recreational marijuana. The stated intent of the 2016 Marijuana Act was to "normalize" the marijuana industry; yet virtually no other industry is able to bypass the local decision-making bodies when seeking approval to locate in a city or town. The language of this Act makes it impossible for city councils or Town Meetings to make these zoning decisions, as they are able to do with any other business. Instead, communities are only allowed to act if they pursue the convoluted and unclear process of placing a question on the ballot for voters to approve at their next state or local election in conjunction with passing a parallel bylaw. Under Massachusetts law, decisions on zoning and commercial activity are inherent in the duties of Town Meetings, town councils and city councils.
 
The poorly-drafted opt-out ballot provisions have led to considerable confusion among cities and towns and their legal counsel. As in the example of Proposition 21⁄2 , state legislation that requires a ballot question also provides the language that is to be used on the ballot. The Marijuana Act fails to do this. As a result, we are certain that unnecessary and costly litigation will become commonplace regarding the wording of ballot question language, especially in those instances where a community votes to prohibit commercial sales, as the nationwide marijuana industry is prepared to spend significant resources to defend their marketplace. In order to clarify this section and simplify the process, we ask the Legislature to provide statutory authority for cities and towns to opt-in to commercial sales via a simple majority vote of the local legislative body, rather than upending Massachusetts’s long history of local control of zoning with the cumbersome and poorly-worded language currently in the law.
 
The commercial marijuana law also includes language that would allow the Cannabis Control Commission (CCC) to preempt or disallow any local zoning rule, ordinance or regulation that is "unreasonably impracticable" – an undefined circumstance with no description or case law to define. We fear that this language will be widely interpreted to serve as a challenge to local ordinances and bylaws without offering concrete guidelines for communities to follow. Our concern is made even more serious because the "advisory board" to the CCC, as currently structured, is a pro-industry panel dominated by commercial marijuana interests. We respectfully ask you to restore decision-making authority to municipal governing bodies on the question of commercial bans, and clarify that neither the CCC nor the Marijuana Act itself override local zoning decisions and ordinances on the location and operation of locally permitted commercial facilities, including recreational marijuana. The broad preemption language should be eliminated, and local governments should have the right to make these important decisions as they do regarding every other industry: through a vote of their legislative body.
 
In the time since the passage of Question 4, a number of communities across the Commonwealth have already taken action on this issue, either through enacting a moratorium to await regulations from the CCC, or in some cases by following as best they can the instructions laid out in the law to enact a ban. We request that already existing municipal decisions be protected in any remedial legislation. Specifically, we ask that the bill "grandfather" the municipal votes that have already taken place. These communities and voters have acted in good faith, and should not be required to re-vote if the ballot language they used differs from any state-set standard.
 
Because the deadline for regulations comes after the CCC is instructed to begin processing applications and licenses for commercial facilities, local governments will begin to see applications for commercial facilities before they know the full extent of the state regulations under which those facilities will be operating. Communities need adequate time to finalize their local ordinances and zoning rules, and it does not make sense to force communities to act on their local provisions before the state’s regulatory framework is in place.
 
The most effective way to preserve municipal authority would be to amend the local control section to create a clear and workable opt-in process for municipalities. Absent that preferable framework, we respectfully ask that the above recommendations be included in the upcoming legislation.
 
Please Create a Truly Independent Board and Commission
We urge you to improve the composition of the Cannabis Advisory Board to make it a truly independent entity, instead of the industry-dominated panel that it is. It is striking that the ballot question was written to give commercial marijuana interests majority control of a board that will be so heavily involved in regulating the industry. We respectfully ask that a municipal representative be added to the board, as well as a representative from municipal police chiefs and a seat representing local boards of health. We believe the addition of these perspectives is vital to ensure that local public safety and health concerns are considered when crafting the regulations.
 
In addition, we believe that the number of commissioners on the Cannabis Control Commission is insufficient to successfully pursue their mission. We believe that the CCC should be expanded to five members, with one additional commissioner to be appointed by the Governor and one additional commissioner to be appointed by the Attorney General, in a manner similar to the selection of the Gaming Commission. It is the view of the MMA that the Governor’s appointment should be a representative of municipal interests, and the Attorney General’s appointment should represent public safety interests. The original ballot question is rife with errors regarding the local decision-making process. This ignorance of municipal laws and governance underscores the need for a municipal representative on the Commission to fill that knowledge gap and ensure proper implementation of the voters’ will across the Commonwealth, in a way that is consistent with state and local laws.
 
We ask that the Legislature ensure balance on the Advisory Board, and expand the CCC to five members, with the requirement that one member be a municipal representative.
 
Please Provide Adequate Revenues
Another major concern is the rock-bottom excise revenue that would be generated by the ballot question, where it is again clear that the marijuana industry learned a lesson from earlier experiences in Colorado and Washington state. In addition to state sales taxes, the Colorado law imposes a 25 percent tax on marijuana, and cities and towns can enact their own local sales taxes of up to 8 percent. The state of Washington imposes a 37 percent excise tax, and cities and towns can collect their own local sales tax on top of that. Here in Massachusetts, the commercial interests behind Question 4 set the state marijuana excise tax at just 3.75 percent, and capped the municipal local-option marijuana excise tax at only 2 percent. These would be among the lowest rates in the nation.
 
Given the significant new burden of regulating and monitoring a new commercial industry (which will deal in a controlled substance that is still illegal under federal law), the state and local revenue rates are unreasonably low and damaging to public budgets. The state excise will clearly fall short, and we urge you to increase the state tax so that, at a minimum, resources will be available to provide statewide training of police officers and fund the CCC, as well as other state agency needs. Further, cities and towns will have new responsibilities in areas of public safety, public health, zoning, permitting and licensing. At 2 percent, the local revenue in the Marijuana Act will fall far short of local needs.
 
We respectfully ask you to increase the allowable state and local tax rates to bring them in line with Colorado and Washington and other "first-wave" legalization states. We recommend a local excise of 6 percent, set by the Legislature with the other excise and sales taxes.
 
We request that the Legislature increase the revenue rate to meet expected regulatory needs, especially the local rate.
 
As of December 15, 2016, the home cultivation of marijuana is lawful through a totally unregulated "home grow" provision, which authorizes the cultivation of up to six plants per person, and twelve per household, at any one time. This could result in potentially tens of thousands of dollars of product in individual homes at any one time. Local and state law enforcement officials are gravely concerned regarding the home grow language in the new law – the sheer volume of home-grown marijuana will clearly incentivize a burgeoning black market to hit the street at least a year before regulated commercial sales become lawful, creating a source of sales that could easily reach school-aged children and teenagers.
 
We respectfully ask you to reduce the number of plants allowed by the home-grow provisions, and to develop a structure to appropriately register, regulate and monitor this activity to safeguard public safety and health, and protect neighborhoods, residents and youth.
 
Summary
Cities and towns have a responsibility to implement the new law in a manner that protects the public interest, yet communities will not be able to fulfill this responsibility unless the significant flaws detailed in this letter are addressed. Just as the Legislature and governor acted in 1981 to amend Proposition 21⁄2 to make it workable, we respectfully ask the Commonwealth to take action to address the shortcomings in the Marijuana Act. Doing so would benefit the public interest and every community.
 
Thank you very much for your consideration – we deeply appreciate your support for our cities and towns. If you have any questions or wish to receive additional information, please do not hesitate to have your office contact me or MMA Legislative Analyst David Lakeman at (617) 426-7272 at any time.
 
Sincerely,
 
Geoffrey C. Beckwith 
Executive Director & CEO
 
CC: The Honorable Robert DeLeo, Speaker of the House
The Honorable Stanley Rosenberg, Senate President