Rod owner sues city for impact charges | New
HAVERHILL – As Caroline Pineau looks back, she says there’s no denying the impact she’s had on the city thanks to her downtown marijuana store, Stem. That impact, however, is in question as the store nears its first anniversary on May 30.
No stranger to litigation, Ms. Pineau faces a new legal battle after filing a complaint against the city for the $ 400,000 in fees it pays to do business in Haverhill.
Like the other two Haverhill pot store owners, Pineau negotiated an agreement to pay 3% of Stem’s gross sales to the city annually for five years, provided the expenses were “reasonably related” to the costs imposed on the city by the operation of Stem.
Mayor James Fiorentini, through city attorney William Cox, argues that Stem – located in the downtown business district – has had a variety of detrimental effects at the local level. However, he declined to go into details on how these issues have been linked to the community or how the city’s budget has been affected.
Now, with the ongoing trial, Fiorentini accuses Pineau of going back on the initial agreement signed by the two parties in December 2018.
“These agreements are essential so that we can balance our budgets and avoid layoffs,” said Fiorentini. “It (the agreement with the host community) does not say that they will only pay us if they meet certain conditions. He says they are going to pay us and they are required to pay us. If they hadn’t accepted that, they wouldn’t be here in the first place.
A detailed list of how a marijuana store impacted a city and the costs assessed by the city in relation to its operation is required by general Massachusetts law to be submitted to the Cannabis Control Commission of the United States. ‘State so that Stem can apply for his license. renewal.
According to the mayor, Stem and the two other stores currently open in Haverhill – CNA Stores and Full Harvest Moonz – are among the state’s “dealers” in a “concerted effort” to reverse deals with their host cities.
“It’s not about transparency or detail: it’s about a company that comes here, makes a deal and tries to get out of it,” Fiorentini said. “This is a request for special privileges.”
For her part, Pineau said she had always intended to pay the impact fee and was only asking the city to explain where the money it is paying is going. Pineau has set aside about $ 400,000 before his first payment due date of May 30 and wants a judge to decide whether all or part of it will go to the city if the costs are found to be reasonably related.
“When we signed our HCA with the city, we agreed to pay sales taxes and impact fees. We expected impact fees to be properly documented and to be reasonably linked to our operations, as required by law, ”Ms. Pineau said in a statement, adding that she would also pay $ 400,000 in impact tax. sale.
Following repeated attempts by Pineau to obtain an impact statement and the associated costs, Cox, the town’s attorney, submitted a letter on February 28 highlighting some of the town’s concerns without the charges therein. associates.
In addition to an increased need for police and fire services, Mr. Cox said Haverhill has “seen an increase in the need for addiction and mental health services, both in our community and more specifically in our communities. schools, as well as an increase in domestic problems. »Following the opening of Stem and other stores.
“We have seen an increase in anxiety, depression and drug use in our schools, including the use of marijuana,” said the town’s lawyer. The increase is so high, he said, that he and other city officials believe that a survey should be conducted to assess the level of dependency of students to organize counseling and other services.
Fiorentini declined to go into details on the costs when pressed further by The Eagle-Tribune.
“We know that every downtown business – whether it’s The Hidden Pig, The Tap or Stem – forces us to fix sidewalks or potholes, pave the streets and run our police officers on those streets. “, did he declare. “It’s probably hard to say how much is caused by Stem and how much is caused by The Tap or The Hidden Pig, but all of them make deals with us when they come here and we expect them to honor their agreements.”
Fiorentini wants to see the 3% of marijuana store fees go to the city’s general fund, he said. Others in the city have different ideas.
The city council has sent several letters to the mayor on this subject over the past two years. Fiorentini responded to their request in writing on October 28, 2019, explaining that although he opposes the allocation of funds, he “has fully (understood) and fully (supported) the need for transparency in the way marijuana revenues are allocated. ”
“It’s good public policy,” he said in the letter, which was written when no stores were open, but three agreements with the host community had been signed and four special permits. issued.
At the time, Fiorentini suggested what he called a “reasonable alternative” to create separate items in the budget to “clearly show the marijuana revenues” so that all parties know “where every dollar is spent” .
Vice-Chairman Colin LePage said he hoped that money from retail stores could be allocated to drug addiction education, among other things.
Municipal inspection costs, public safety overtime, and drug prevention education are considered costs reasonably associated with operating marijuana stores, according to the CCC.
According to LePage, $ 6,000 spent on a survey of risky behaviors in youth could produce results used to apply for other substance abuse prevention grants or related services in schools and in the community. LePage said he would like the impact fees from marijuana stores like Stem to be used to fund such an investigation, as well as the additional addiction counselors schools need.
Members of the cannabis community and others familiar with the impact fees say no other business in the state comes under scrutiny like marijuana retailers.
David O’Brien, president and CEO of the Massachusetts Cannabis Business Association, compares the information Pineau received from the city to get “a bill with no details.”
“If you take this (letter) to a reasonable person and they laugh as you read the list, it’s probably unreasonable,” O’Brien said.
Shaleen Title, a former Cannabis Control Commissioner who helped approve Stem’s license, agrees with O’Brien.
“These references to ‘chords’ and ‘chords’ are exactly the problem. That’s not what the community impact fee is, ”Title said. “It is absurd that a municipality does not have documentation on the costs and claims that it is entitled to a fee anyway.”
While Fiorentini has compared Stem to other companies – The Tap and The Hidden Pig – O’Brien said the comparisons aren’t entirely accurate. Not only is the cannabis industry more heavily regulated, he said, but it also pays higher fees.
“Show me a liquor store that pays 3% just to live in their neighborhood: that just doesn’t happen,” O’Brien said. ‘Show me the Dunkin’ or the McDonald’s or whatever local place that pays these exorbitant fees. No one does. Frankly, this is legalized extortion.
Title praised Pineau for being brave enough to pave the way for what could potentially be a historic affair.
“I guess the only reason so many municipalities have been able to act so blatantly for so long is because potential candidates feared retaliation if they challenged these practices,” she said.
Both sides say they are eager to empower the other.
“We are simply asking the city to act according to the law,” Pineau said in a statement. “Stem is already paying hundreds of thousands of dollars directly to the city in the form of sales taxes. If the city wants more, it should be required to obey the law. “