Massachusetts Cannabis Company Suing Over Host Community Agreement Fees

A Pittsfield, Massachusetts cannabis company is suing the city over its Community Impact Fees, alleging officials have not identified any “impacts” the company has had on the community, JD Supra reports. Under the state’s legalization law, the Community Impact Fees imposed on cannabis businesses must be “reasonably related” to the costs incurred by a municipality as a result of cannabis business operations and municipalities must furnish annually documentary proof of such costs to operators. 

Berkshire Roots is seeking to recoup $440,000 in Community Impact Fees it paid to Pittsfield since 2018; however, the state’s legalization law does not expressly address whether cannabis businesses may recoup past Community Impact Fee payments that were not in accordance with the law.  

According to the complaint, Berkshire Roots has two so-called Host Community Agreements with the city – one for its medical cannabis operations and one for its adult-use operations.  

Amendments to the state’s legalization law expressly authorize licensees to sue host communities for breach of contract if a licensee believes the preceding year’s municipal cost documentation – which a municipality is now required to provide to an operator during the license renewal process – is not “reasonably related” to the actual costs imposed on the municipality. Under those provisions, licensees can sue to “recover damages, attorneys’ fees, and other costs encompassed in the community impact fee that are not reasonably related to the actual costs imposed upon the city or town,” according to the JD Supra review. Berkshire Roots’ lawsuit does not cite the new law as the legal basis for the lawsuit but references the prior statutory regime and a 2020 Guidance Document issued by the Cannabis Control Commission on Host Community Agreements. 

Pittsfield-based Bloom Brothers filed its own lawsuit against Pittsfield last year and is seeking to recoup $110,000 in Host Community Agreements fees, alleging the city has never provided the documentation showing the company’s impact on the city.