MMA letter to marijuana conference committee urges legislators to protect local control of zoning decisions

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The Honorable Ronald Mariano
The Honorable Patricia Jehlen
The Honorable Mark Cusack
The Honorable William Brownsberger
The Honorable Hannah Kane
The Honorable Richard Ross
State House, Boston
 
Dear Majority Leader Mariano, Senator Jehlen, Representative Cusack, Senator Brownsberger, Representative Kane, and Senator Ross:
 
On behalf of the cities and towns across the Commonwealth, the Massachusetts Municipal Association wishes to offer our comments on H. 3776 and S. 2097, Acts to Ensure the Public Health and Safety of Patient and Consumer Access to Medical and Adult Use of Marijuana in the Commonwealth. This issue is complicated and far-reaching, and passage of an omnibus bill will have an enormous impact on cities and towns.
 
Just as the Legislature and governor acted in 1981 to amend Proposition 2½ to make it workable, we believe it is both appropriate and necessary for state 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.
 
There are a number of areas of disagreement between the House bill (H. 3776) and the Senate bill (S. 2097), covering a number of important policy areas, each of which will have an impact on cities and towns. We have reviewed both bills, and will focus our comments primarily on where the two versions differ.
 
We urgently and respectfully ask you to take action on all of these matters to support the interests of the cities and towns you represent. Please act to protect the role of local legislative bodies on zoning and other local decisions, ensure an effective revenue rate at the local level, and avoid making unnecessary changes to host community agreement provisions.
 
Decisions by the Local Legislative Body
The MMA asks you to support provisions protecting local control of zoning decisions. The MMA supports Section 6 in H. 3776, which would normalize the system of local control by restoring basic decision-making and zoning authority to the local legislative body. The MMA also supports House Amendment 11, which was adopted and incorporated into H. 3776, which eliminates restrictions on the zoning of recreational facilities in districts with Registered Medical Dispensaries.
 
Restoring local decision-making authority does not undermine the vote of the people in favor of Question 4. Rather, passage of this amendment would benefit all citizens by bringing much-needed order and clarity to the new law. There has been no rush by cities and towns to “opt out” of the law. Our analysis shows only about 30 cities and towns have voted to “opt out,” mostly where voters rejected Question 4. About 80 cities and towns have taken a measured approach to the new law and adopted a local moratorium. This allows local elected officials the time to take the pulse of local citizens on zoning and siting issues, and provides cities and towns with adequate time to review expected changes to the law and the regulations that are scheduled to be adopted.
 
The local control process supported by the MMA would follow the full and open decision-making process used at the local level for all major decisions made by local elected officials, which in this case would include either a decision to opt out or a decision to limit the number of pot shops that can locate in a community. In a city, the vote would be made by the City Council with the approval of the Mayor. In a town, opting out would require an affirmative vote of the Board of Selectman and Town Meeting. The key step here is that the approval of the local legislative body would be required. Opponents of this language have repeatedly mischaracterized the deeply participatory nature of these local votes. These would not be decisions made by one or a handful of people. In cities, these decisions would be made by locally elected representatives of the people who are directly accountable. In towns, decisions would be made by Town Meeting. For the 259 towns with an Open Town Meeting format, the legislative body includes all registered voters. For the 36 towns with Representative Town Meeting, the legislative body includes approximately 150 to 250 residents who have been elected on a precinct basis.
 
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. H. 3776 solves the unworkable aspects of the ballot question by using the legal framework that exists for all other aspects of zoning and commercial regulation – approval by the local legislative body.
 
New England local government is the gold standard in terms of local American democracy. It does not make sense to create a special and unique exception in the law to allow the commercial marijuana industry to circumvent the municipal decision-making process that shapes all other business activity.
 
The Local Election Cycle
The marijuana ballot question was written without any real understanding of either the municipal election cycle or the fact that local legislative bodies are responsible for essential zoning decisions. Question 4 would require a referendum in order for a community to limit the number of commercial pot shops or to ban commercial sales, but this language is deeply flawed. First, 85 percent of communities will not hold their next municipal election until next year, well after the Cannabis Control Commission begins accepting applications from commercial vendors, which is a major problem because communities cannot retroactively regulate or zone. The remaining 15 percent of communities are cities, which hold municipal elections every two years, and their next election in November will come before the CCC has completed its regulatory process. Further, in many communities there is no process for placing such a referendum on the ballot. In other words, the municipal election calendar sets the decision-making dates either too early or too late to be effective, and the language in the new law is inconsistent with municipal election processes.
 
Importantly, the commercial marijuana industry should recognize that fixing these flaws in the question, as H. 3776 does, will actually facilitate a swifter growth in the marketplace, and will ensure a robust and fairer roll-out process. The flaws and lack of clarity in the existing language is bogging down the zoning process and is forcing a growing number of communities to adopt moratoriums. The reality is that the commercial marijuana industry will be slowed down if these flaws in Question 4 are not corrected.
 
Inadequate Revenues
The MMA also has significant concerns with the rock-bottom excise revenue that would be generated by the ballot question if left unchanged, where it is 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 Coloradan 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. This would be the second-lowest overall tax rate in the nation (behind Maine).
 
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 and 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 support a reasonable and effective state and local excise, to bring revenue rates here in the Commonwealth closer to the successful models in Colorado and Washington and other “first-wave” legalization states. The MMA has requested a local rate of 6 percent as necessary to meet local needs. The House rate of 5 percent comes close to this level, and we ask you to support the tax provisions in H. 3776. This is not a new issue. The MMA has long maintained that the rate included in the original ballot question is inadequate to meet local regulatory needs. Please support the House rate of 5 percent.
 
Host Community Agreements
Please oppose language that would limit or constrain the ability of communities to negotiate adequate host community agreements. Cities and towns and marijuana businesses are perfectly able to negotiate and enter into mutually beneficial agreements without the proposed limitations that are in play. Host community payments are essential to ensure fiscal balance for cities and towns that have decided to allow these facilities, especially if the allowable local tax will not raise adequate funds to cover local taxpayer costs (as is the case with both S. 2097 and H. 3776). While the MMA would prefer the elimination of any language that restricts the ability of cities and towns to negotiate on cost or any other factor, we support the Section 6 language in the House bill, which establishes a reasonability guideline for municipalities crafting these agreements.
 
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 2½ 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. If you have any questions or wish to receive additional information, please do not hesitate to have your offices contact me or MMA Legislative Analyst David Lakeman at (617) 426-7272 at any time.
 
Sincerely,
Geoffrey C. Beckwith
Executive Director & CEO
 
CC:
His Excellency Charles Baker, Governor of the Commonwealth
The Honorable Karyn Polito, Lieutenant Governor of the Commonwealth
The Honorable Robert DeLeo, Speaker of the House
The Honorable Stanley Rosenberg, Senate President