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MREs and HCAs
What Authority Do Municipalities Have with Cannabis License Seekers?
UBy Mary-Lou Rup
nder Massachusetts’ recreational-mari-
juana statute, those seeking to operate a
marijuana retail establishment (MRE) must obtain a license to operate from the Cannabis Control Commission (CCC). Municipalities exer- cise local control over MRE applicants through ordinances or bylaws setting ‘reasonable’ controls on the time, place, and manner of operations and limiting the number of MREs within their borders.
During the first step of the licensing process, MRE applicants must obtain approval from the munici- pality, and the municipality and applicant execute
a host-community agreement (HCA), which sets forth the conditions under which the MRE can oper- ate. During the second step, the CCC determines
to which approved applicants it will issue licenses, which in part requires a one-page certification that the applicant and municipality have executed an HCA.
Municipalities may require that MREs pay a ‘com- munity impact fee,’ statutorily capped at 3% of the MRE’s gross sales for five years, to cover a variety of actual costs to the municipality reasonably related to the MRE’s operations.
In HCAs, many municipalities require additional payments by the MREs, often based on an addi- tional percentage of gross sales and/or charitable donations to entities selected by the municipality. These additional costs have, for the most part, gone unchallenged by MRE applicants anxious to obtain the HCA necessary in order to be licensed to operate.
An appeal now pending in the Supreme Judicial Court (SJC) may resolve issues related to the degree to which municipalities exercise control over which applicants move on to the second step. The case involves Mederi Inc., which sought to operate one of five MREs permitted by the city of Salem. Mederi received the necessary special permit and alleges it met all other requirements of the city’s application process. A city committee reviewed the applications
before entering HCAs with four applicants; Mederi was not among them and sued. Dismissal of that suit lead to Mederi’s appeal.
Two arguments made by Mederi are of inter- est. Mederi challenges the
city’s authority to select
with which qualified appli-
cants it would enter HCAs, effectively controlling those which the CCC could then consider for licensing. Mederi also argues that
the city exceeded its law-
ful authority by, among
other actions, imposing as
a condition of its HCA fees
in excess of the 3% com-
munity-impact fee. Specifically, the city required five annual payments of 1% of gross sales to a ‘traffic- enhancement fund’ and at least $25,000 in chari- table contributions to local causes.
Mederi posits that allowing municipalities to uti- lize these ‘pay-to-play’ provisions and to pre-select which qualified applicants it will allow to advance to the CCC adversely impacts the statute’s provisions giving priority to economic-empowerment appli- cants — provisions intended to assist areas of dis- proportionate impact disadvantaged by high rates of criminal activity involving marijuana.
In opposition, the city argues that it could prop- erly decide with which applicants to enter into HCAs. It asserts that the local-control step of the MRE-licensing process allows municipalities to weigh competing proposals and exercise discretion in choosing the most suitable applicants. The city argues that its selected applicants were the “stron- gest possible operators” based on experience in the marijuana industry and intent to operate in the “least impactful locations” in Salem.
The CCC filed an amicus brief in the case. Point-
ing to competing legislative mandates, it asserted that, while the statute does not authorize it to regu- late or participate in the initial local-control portion of the licensing process, the statute also requires that
“An appeal now pending in the Supreme Judicial Court (SJC) may resolve issues related to the degree to which municipali- ties exercise control over which applicants move on to the second step.”
it give MRE licensing priority to existent medical- marijuana treatment centers and economic-empow- erment applicants.
It noted that municipalities’ exclusive control of the HCA process seemed to advantage more expe- rienced and better-resourced applicants, leaving economic-empowerment applicants at a competi- tive disadvantage, and, in effect, controlled those whose license applications the CCC is able to con- sider. The CCC has recommended amendments to the statute, addressing, among other matters, this issue and the additional fees imposed in HCAs. Its recommendations are presently under consideration in the legislature.
Stay tuned. The SJC heard arguments on Feb. 3 and, under its usual 130-day timeline, may be expected to issue its decision by early summer. u
Mary-Lou Rup served as associate justice of the Massachusetts Superior Court until her retirement in 2018, when she joined the litigation group of Bulkley Richardson as senior counsel.
        Law School
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“Students have always been inter- ested in that mission, but now we have this focal point and can shepherd stu- dents toward job opportunities, toward scholarships, toward career paths, thinking about what they need to be
a social-justice lawyer,” she said, not- ing, as one example, the Center’s Con- sumer Debt Initiative, which helps area individuals who are unrepresented
in debt collection, sometimes over a few hundred dollars, sometimes a few thousand.
“They can make a difference in someone’s life. It’s a way for students, faculty, and lawyers from the greater community to address this economic- justice issue. We’ve heard a lot of dis- cussions over the last few years about income inequality and economic jus- tice, and I think we’re in a really good place in meeting the interests students have when they come into the law school.”
Add it up, and the WNEU School of
Law hasn’t slowed down its pursuit of building a program that will remain rel- evant in the ever-changing field of law, well after life — and the educational experience — return to something resembling normal.
Back to School
Like every college and university, WNEU had to scramble last spring to get students learning remotely, and fac- ulty and staff spent the summer rais- ing their online competencies to make sure courses would be even more effec- tive in the fall.
“Some of them were already ahead of the curve,” Setty said. “For some of us, including me, it was a lot of learn- ing, a lot of training, a lot of mock classrooms we did with each other to build up our ability. This place is about good teaching, and that was the really important thing to drive home — that, by the time we got back in August, everyone had to continue this excel- lence in teaching as part of the ethos of
the law school — in a hybrid format, if they had to.”
The 2020-21 year has, indeed, taken a hybrid form, with students alternat- ing between learning remotely and in classrooms at the Blake Law Center, due to social distancing and capacity limits. “The largest classrooms normal- ly hold more than 100, and now they’re at 40-something. So the students are rotating through,” she added. “Some students, for health reasons, can’t come at all, so they’re fully remote. That’s the way we’ve been operating.”
The law school has long been known for its use of clinics — in areas such as criminal defense, criminal prosecution, elder law, and family-law mediation — in which students blend classroom instruction with work on real cases, under the guidance of local attorneys. The vast majority of students get involved in clinics and externships, understanding the value of developing not only real-world legal knowledge, but the soft skills that will make them
more employable.
Those clinics are still operating,
Setty said, but they now feature a strong remote component as well.
“Lawyering these days is largely remote,” she noted. “Client counsel- ing is remote. Witness interviews are remote. We have remote hearings in front of judges. So there’s a separate and related set of competencies that our students are learning, which deal with remote client presentation. It’s very different than what they’ve had to do before, and it has its challenges.”
However, she continued, “the flip side is that this is going to be a part of lawyering going forward. Everything’s not going back to fully in person after the pandemic fades. There are going
to be some elements of remote trial work and remote client counseling, so I feel like our students are on the cut- ting edge of learning this stuff, so when
Law School
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