Published: 02/18/2021 01:54:06 PM
When Northampton Mayor David Narkewicz announced last month that the city would waive community impact fees from local marijuana companies, it was an acknowledgment that legal cannabis was not that of some feared harmful social effects.
Since 2016 when New England Treatment Access opened a medical marijuana dispensary in the city, Northampton has amassed more than $ 3 million from the optional impact fee, a 3% tax (1.5% on medical marijuana sales) which is in addition to the 3% excise tax levied on all gross sales of marijuana.
According to Massachusetts law, the impact fee “must be proportionate to the costs the community incurs in running the marijuana business.”
For example, the Northampton host community agreements cite: “… impacts on the road network, law enforcement, inspection services, permit services, administrative services and public health services, and possible additional unforeseen effects on the city.”
The income from the Impact Fee can only be used for this type of community impact and may not flow into the city’s general fund. The agreement expires after five years and must be renegotiated at this point.
According to Narkewicz, in January the city had spent about $ 1 million of the impact fees it had collected on, for example, road repairs and improvements in the neighborhood of the NETA pharmacy.
“There wasn’t necessarily any major impact,” said the mayor. “A lot of the concerns, potential concerns about this industry came mostly from people who opposed legalization, thinking that crime would increase or that drug abuse etc. would increase. And I think these concerns did not arise. We certainly haven’t seen that here in Northampton. ”
Police overtime for traffic control around NETA, another significant cost factor for the city, is billed separately. That cost was $ 804,403 in 2019.
Easthampton and Amherst have followed Northampton’s lead and assessed impact fees in their own agreements with pharmacies. Easthampton billed impact fees of approximately $ 1.2 million and Amherst less than $ 350,000. However, these municipalities are not yet ready to grant a tax amnesty.
Northampton is in an enviable position. Due to the geographic location and a birth accident – it was the first recreational pots store to open in the entire northeast in November 2018, a minute from the region’s main north-south highway – NETA was eager from day one Overcrowded customers. The traffic and long lines of people in front of the door and on the street have certainly caused some problems, but after two years things have calmed down. New pharmacies have opened and others are planning to do so.
In return for all of this heady trade, the city earned more than $ 3 million for its general fund. Since more than this amount has already been booked from the Community Impact Fees, it is well placed to stop collecting these fees. They will not be canceled – should the city incur unexpected charges for a particular company, the city reserves the right to re-charge the fee.
Legal marijuana has not brought social problems and worrying consequences to the communities that have welcomed it. Instead, it has proven to be not only ineffective, but also an extremely lucrative business for the suppliers and the host communities.
One of the stated goals of the Massachusetts Cannabis Legalization Act was to provide business opportunities for those with limited resources, especially blacks and Hispanic Americans, who have been disproportionately harmed by the criminalization of marijuana.
In the latest change, Narkewicz admitted this, saying he would “try to create as few barriers and hurdles as possible for the industry – especially for small business owners and stock applicants”.
The legal marijuana industry will truly be a success story if it can deliver on that promise.