Fall River must change pot shop agreements after asking for more than state law allows

FALL RIVER — The three companies currently awaiting state approval to open recreational marijuana dispensaries in Fall River have to amend their host community agreements with the city after having initially agreed to pay revenue fees that were above what state law allows. 

Host community agreements, which outline financial contributions marijuana businesses annually give to their host communities, can legally ask recreational dispensaries and marijuana growers for up to 3 percent of their annual gross sales revenues. According to early drafts of the three host agreements Mayor Jasiel Correia II signed with the pending applicants, all three companies originally agreed to pay 4 percent.

The companies are Hope Heal Health Inc., Greener Leaf Inc. and Xiphias Wellness, which has since changed its name to Nature’s Medicines.

Corporation Counsel Joseph Macy said the city is in the process of amending agreements and that an agreement with the company Northeast Alternatives, the city’s first and currently only recreational dispensary, has already been amended. 

Despite having initially agreed to pay the city 4 percent of its gross revenues, Northeast Alternatives would go on to criticize the city for asking for more than what the state law allows.

The agreement was amended in December after news of the 4 percent fee drew the ire of several marijuana industry attorneys and legislators like state Sen. Patricia Jehlen, D-Somerville, co-chairwoman of the state’s committee on marijuana policy.

Macy said that not just Northeast Alternatives, but all of the companies that applied to open in Fall River agreed to the 4 percent fee as the host community agreements they all signed were modeled after the same template.

Macy explained the 4 percent figure had been picked by the city in 2016 before the state’s Cannabis Control Commission even existed as a regulatory body. Though the mayor is the local official who grants approval to applicants, it’s the Cannabis Control Commission that gives the final approval a company needs to open.

“We did receive subtle but strong indication (from the CCC) that it wouldn’t help our applications to be at 4 percent,” said Macy.

Because these financial contributions are entirely dependent on how well each company does in marijuana sales, it’s unclear just how much less money the city will be getting from a 3 percent fee compared to a 4 percent fee. However, Macy did note that the amount could have some significance as the dispensaries that have opened in the state appear to be “fairly lucrative.”

Host community agreements for medical marijuana dispensaries are not subject to the 3 percent free cap as they fall under a separate law. There are six other companies that have negotiated host agreements with the city for medical dispensaries and facilities that grow and process marijuana. All of these six companies also agreed to 4 percent fees and would need to have their agreements amended if they expanded to recreational sales. 

Regarding any future negotiation, Macy said the city intends to abide by state guidelines.

“Fall River is not going to be out of compliance with any state regulations. Whatever they want us to do, we’ll do,” he said. “The problem is we’re all in uncharted waters.” 

Email Peter Jasinski at pjasinski@heraldnews.com.