Massachusetts has had a tough time getting its legal weed system up and running. Retail shops were supposed to start operating earlier this month. But so far, none have opened. Now, it looks like the state could be confronting new challenges. In an effort to make it easier for marijuana businesses to open, state officials recently asked local authorities not to rip off cannabis applicants.
Are Local Governments Making it Tough for Weed Businesses?
Under new cannabis laws in Massachusetts, anyone wanting to open a dispensary needs to go through multiple steps. In particular, applicants have to receive a few different levels of approval.
The first one is at the local level. More specifically, a cannabis business must obtain an agreement from the local municipality to open shop. Once that agreement is complete, the business can move on to state-level licenses and approvals.
But now, it looks like a lot of cannabis business hopefuls are running into big challenges at the local level. According to news sources in Massachusetts, some municipalities are trying to charge weed businesses exorbitant fees. And in some cases, these fees are becoming big barriers to entry for people who want to open weed shops.
Massachusetts state officials have reportedly been hearing “anecdotal” evidence that this is happening. As a result, state lawmakers sent a letter to regulators. In it, they asked them to make sure that town and city officials were not making unfair or illegal demands on marijuana businesses.
Massachusetts laws allow local governments to charge marijuana businesses that want to open shop in their jurisdictions. But these fees have limits.
Municipalities can charge cannabis businesses fees of up to three percent of their total revenue. But only for as long as five years.
Further, these fees are supposed to go toward covering additional expenses likely to arise from the presence of legal weed shops. These new expenses could include things like handling increased traffic, or costs linked to policing requirements under the new laws.
Additionally, local governments can collect taxes of as much as three percent on all marijuana sales within their jurisdictions.
Don’t Rip Off Cannabis Applicants
Despite these limits, there are reportedly some localities that are trying to levy higher, more heavy-handed fees before they’ll let a marijuana business move into town.
State officials are worried about this. And they do not want it to become a larger trend. In particular, some lawmakers worry that these financial burdens are slowing down the rollout of the state’s legal weed market.
Of even greater concern, some officials have said that these financial burdens would make it hard for the legal weed market to be diverse.
Having to pay a lot of fees and taxes to a city or town would likely be a larger hurdle for smaller businesses than it would be for bigger corporations.
Similarly, these financial barriers could be roadblocks to minority business owners, or those who don’t already have access to capital.
But now, state regulators are working to get local governments in check. If it works, maybe Massachusetts will finally see dispensaries begin to open. So far, the state has zero shops in operation.