MMA webinar reviews draft CCC regulations on host community agreements

An MMA webinar today discussed the implications of the Cannabis Control Commission’s draft regulations on host community agreements and social equity.

Nicole Costanzo, a senior attorney at KP Law, covered how the draft regulations are likely to affect existing host community agreements, as well as strategies for municipalities to navigate the changing environment.

The CCC approved the preliminary regulations on July 28, and the formal public comment period is expected to remain open through Aug. 31. The CCC has until this November to finalize and promulgate the final rules.

The draft regulations would broaden the CCC’s authority over host community agreements. Costanzo said the regulations would enable the CCC to deem a host community agreement provision as “invalid, unenforceable, or voidable,” and no host community could impose an “unreasonable condition” or a term that is “unreasonably impracticable” in an agreement.

Under the draft regulations, any conditions set in a host community agreement must be “reasonable.” This includes instances where an HCA condition is deemed necessary to promote public safety or public health, among other reasons.

Under the regulations, the CCC’s review of HCAs would apply retroactively upon license renewal, and approval of an HCA may be conditioned on a host community being in “good compliance standing” with the CCC. However, a host community may waive the regulatory requirement by submitting an HCA waiver, in a form and manner determined by the CCC, at any time.

Costanzo said the CCC will be “charged with establishing criteria for reviewing, certifying and approving” community impact fees. To qualify as a community impact fee, the fee proposed by a host community must be “reasonably related” to costs imposed by the operation of the marijuana establishment.

The CCC is also establishing acceptable equity standards governing host communities. The procedures will require municipalities to promote, and encourage transparent participation in, HCA negotiations with Social Equity Businesses by publicizing certain information in community offices and websites. Host communities would be required to adopt local rules or bylaws to comply with social equity requirements on or before May 1, 2024.

MMA Legislative Analyst Ali DiMatteo moderated 15 minutes of questions and answers, which addressed inquiries about license renewals, templates for community impact fees, and the collection of unpaid fees.

• Cannabis Compliance: Reviewing Draft Regulations on Host Community Agreements and Social Equity presentation (700K PDF)