Client Update: S.3096 An Act relative to equity in the cannabis industry
Senate bill S.3096 was signed by Governor Baker on August, 11, 2022. The bill prioritizes equity in the cannabis industry but also clarifies and reinforces certain parts of the existing cannabis law including, notably, host community agreements and social consumption.
Business Taxes
- Sets state income tax deductions for marijuana businesses
Tax on Marijuana Products
- Exempts marijuana products from the state cigarette excise tax unless those products can also be used to consume nicotine
Local Taxes
- Allocates 1% of the marijuana sales tax revenue from marijuana retailers in the social equity program to the city or town hosting the retailer
Social Consumption
- Clarifies the local process by which a municipality can permit social consumption establishments to operate
- Outlines the process for a ballot initiative petition to be brought before the voters to decide whether to allow social consumption or not
- Alternatively, authorizes municipalities to allow social consumption establishments through a by-law or ordinance change
Host Community Agreements
- Community impact fee
- HCAs may include a Community Impact Fee (CIF) until the end of the eighth year of operation of a marijuana establishment or medical marijuana treatment center
- A CIF may not exceed 3% of gross sales
- Calculation of the CIF may commence on the date a marijuana business is granted its final license
- The CIF must not include any monetary payments or in-kind or charitable contributions by the marijuana business to the host community or any other organization
- Host communities are required to document the costs imposed by the operation of a marijuana business and must send that documentation to the marijuana business; this documentation is public record
- If a marijuana business believes any of the documented costs are not reasonably related to its operation, they may bring a breach of contract action against the host community and recover damages, attorneys’ fees and other costs
- Cannabis Control Commission Review
- The CCC will now review each host community agreement as part of a license application and license renewal
- The CCC will have 90 Days to review each agreement
- CCC may request additional information from applicants or municipalities during review period
- The Commission has one year from the signing of the bill to establish regulations
- The CCC is required to create a model host community agreement with minimum acceptable standards and best practices for municipalities and licensees during HCA negotiations with social equity businesses
- Final license cannot be granted until the host community agreement is approved
- The CCC will now review each host community agreement as part of a license application and license renewal
- Waiver
- Host communities may waive the HCA requirement in writing
Promotion of Full Participation in the Marijuana Industry by Disproportionately Harmed People
- CCC will create regulations to establish standards for municipalities to promote participation in the marijuana industry by people from disproportionately harmed communities
- Policies and procedures will be established for municipalities to follow to promote and encourage full participation by social equity program businesses and economic empowerment priority applicants
- Failure to adhere to these policies and procedure will result in a community receiving a monetary penalty
Cannabis Social Equity Trust Fund
- Administered by the Executive Office of Housing and Economic Development and a newly created Cannabis Social Equity Advisory Board
- This fund will be funded by money from the Marijuana Regulation Fund and any funds provided by private sources
- Money will be used for grants and loans, including loans that are no-interest or forgivable, awarded to social equity program participants and economic empowerment priority applicants
- Allocates 15% of the Marijuana Regulation Fund money to the newly established Cannabis Social Equity Trust Fund annually
Expungement
- The bill creates a procedure for the expungement of eligible records from juvenile and criminal courts
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