The two-year period between the legalization of cannabis in late 2016 and the opening of retail stores in late 2018 was a heady time in Massachusetts. Medical marijuana had been available for a while, but that tiny market would soon be dwarfed by the billion-dollar feeding frenzy about to take place in our midst. We were the first state east of the Mississippi to legalize, with Forbes Magazine calling us a “testbed” for the process, predicting that “all eyes will be on the Bay State.” Many eyes, even then, were zeroed in on Berkshire County, this rural resort region of 129,000 residents and 946 square miles.
During that lead-up period we had attracted the most retail license applicants in the state, and as opening day approached, the mood, in the words of a manager at Great Barrington’s Theory Wellness, the county’s first and most successful recreational cannabis outlet to date, was “Christmas Eve.”
2019 turned into 2020 and into 2021, and as store after store got the green light to set up shop, Great Barrington residents began to openly grumble that their town looked like an advertisement for marijuana, what with its four stores, two head shops, and steady rotation of cannabis-centered billboards. The media, however, was still in a Christmas Eve mood. In March 2022, The Berkshire Eagle heralded the town’s fifth store’s takeover of the former church at the intersection of Route 7 and 23 with the headline, “Great Barrington Dispensary to hold Grand Opening on Friday.”
This town of 6,600 now hosts six licensed, recreational outlets. By comparison, the city of Northampton, population nearly 30,000, which had been home to the state’s first store and had been popularly considered the Commonwealth’s epicenter of legal weed, hosts 10. This makes Great Barrington, on a per-capita basis, Massachusetts’ number one pot town, by quite a long shot.
Since then, Theory Wellness—opening day January 11, 2019—has been pot town’s number one pot store, by a very long shot. Throughout 2019, 2020, and 2021 the store’s endless, Walt Disney World-esque line of weather-indifferent customers became a feature of the North Side landscape. Theory brought in $17 million in sales in just the first six months and has contributed the lion’s share of cannabis-related taxes to the town.
But those lines are long gone. The high point—so to speak—of the cannabis industry has likely been reached, both statewide and on the local level. Within the past year, six of Massachusetts’ cannabis stores have closed, including two in Northampton. Market pressure—supply far outpacing demand—has sent prices plummeting. Flower that used to sell for $400 per ounce is now less than $200. The constricted profit landscape is no doubt the reason why a high-stakes conflict has arisen between Theory and Great Barrington.
At issue are not the traffic, driving fatality, or parking problems that were predicted at the outset, because they have not come to pass. Theory is not disputing the 6.25 percent state sales tax, 10.75 percent excise tax, or 3 percent local sales tax established by the Cannabis Control Commission (CCC). Their beef is with the fourth charge: the additional 3 percent Community Impact Fee that Massachusetts cities and towns were free, but not required, to impose as part of their Host Community Agreement with each dispensary. As of June 29, Great Barrington has collected $6.29 million in impact fees, over 80 percent of which—or about $5.1 million—has come from Theory Wellness alone. The business has stopped paying their quarterly impact fees, and they want most of the money they’ve paid in fees to be returned back to them. To be specific, they are asking, through their lawyers, for the $4 million dollars that the town has collected, but not yet spent.
Their conflict is part of a broader dispute between the cannabis industry and the state, the seeds of which were sown back in 2021 between the city of Haverhill and a store called Stem when owner Caroline Pineau claimed, “We believe the city is asking for a large amount of money in impact fees without demonstrating any actual impacts to the community. We believe this is unfair and unlawful.” That case has not been resolved, though the city won the latest round last November.
Since then, the cannabis industry’s rhetoric on the subject of Community Impact Fees has gotten increasingly heated, and it has been referring to the fees as “bribery,” “extortion,” and “slush funds.”
In another first, Northampton has done away with the fees, with Mayor David Narkewicz saying local officials recognized the fees were an “impediment to smaller marijuana entrepreneurs, in particular equity applicants.” Boston followed suit. The capital city’s action came on the heels of new guidance issued on November 9, 2022 by the state’s Cannabis Control Commission regarding the Community Impact Fees, which states that municipalities must now bill their cannabis stores for “reasonably related” costs related to the industry, rather than expect to be paid ahead in quarterly installments.
But what is still not been made clear—and what is at the center of our local conflict—is whether this new rule applies only to future earnings, or also to fees already paid. As Town Manager Mark Pruhenski describes the problem, “What’s unclear to us, and what’s unclear to every city and town in the Commonwealth, is was the new legislation intended to basically cancel all current post community agreements? Or is it looking forward at renewals?”
Theory Wellness CEO Brandon Pollack agrees with Pruhenski on this point. “That’s sort of the main discussion, if you will, right now between the attorneys. The legislators for cannabis feel that, you know, it should be retroactive, where the attorneys representing the municipalities feel that it should not be retroactive.”
(Another Great Barrington dispensary, Rebelle, has not paid taxes or fees at all for the 2022-2023 fiscal year, and owner Charlotte Hanna has complained of the “unfairness” of the fees directly to the town.)
An answer to this crucial question could be coming any day now. At the CCC’s June 26 meeting, Commissioner Kimberly Roy announced that the Host Community Agreement committee had made its recommendations on the new rules and had handed them over to their overworked legal team. They had “engaged with lots of stakeholders” to determine the new rules, she said, and acknowledged that “this issue is of high interest priority and interest for a lot of folks in the cannabis space.” When pushed further on the likely timing of the announcement, she said she hoped to have the vetted proposals ready for “public consumption” and feedback, in preparation for a vote by the full commission, “within the next two weeks.” That would be Monday, July 10.
With 20-20 hindsight, it is clear to see that this was never going to be smooth sailing. Marijuana’s greatest asset, its brand new legal status, was also its greatest liability. When weed became about as easy to access as a six-pack of beer, we’d been practicing the regulation of six-packs since the end of Prohibition in 1933, while cannabis was still federally classified as a “Schedule 1” substance, right alongside heroin. Banks would want nothing to do with it. Customers from around the country would be straight-facedly informed that it was illegal to transport their purchases across state lines.
Most relevant to the current moment, the public entities tasked with setting the rules would have zero precedent to draw upon. They would be building the proverbial plane while flying it, making assumptions about the potential impacts of sanctioning and normalizing use of a mind-altering drug with little information to draw on for their decisions. Fact is, the Community Impact Fees were established at a time when no one knew what the community impacts would be.
Theory Wellness’ Pollack would argue that today we know: There haven’t been any. “The main discussion point now,” he said, “is how do we deal with all the money that’s been taken in that hasn’t been spent and, you know, can’t really be spent without impact?”
The question of what impact the cannabis industry has had on the community will be explored in a follow-up story.
