Easthampton council approves new cannabis fund

  • Easthampton Municipal Building  GAZETTE FILE PHOTO

Staff Writer
Published: 2/26/2020 1:00:33 PM

EASTHAMPTON — The City Council has created a new home for some of its revenues from the sale of recreational marijuana, and local officials will soon develop a policy on how to spend it.

Earlier this month, the council approved a new cannabis impact fee stabilization fund in which the city plans to deposit the approximately $723,000 in community impact money it received from INSA in January.

“It would be easy over the course of time to lose track of that money in the general fund and even to free cash,” Easthampton Mayor Nicole LaChapelle said at the Feb. 19 council meeting. 

The $722,753 from INSA is equal to 3% of the dispensary’s retail recreational marijuana sales over the first year of the business selling recreational marijuana. INSA is currently the only recreational marijuana retailer in Easthampton.

For the remaining four years of the host community agreement, the impact fee will be delivered quarterly, although it will still be 3% of recreational retail sales at the dispensary. The money can be used only to mitigate impacts on the city related to the dispensary’s recreational marijuana business. 

LaChapelle said the city will have to wait until the fall for the state to certify the money as free cash, which will allow the city to use it. She said that she will then ask the City Council to authorize its transfer into the new cannabis fund. With the establishment of the fund, the council is now able to vote on signing onto state legislation that allows impact money to go directly into the fund once it is received. This would start happening in the new fiscal year, which starts July 1, should the legislation be approved this fiscal year.

Any expenditures from the fund must be approved by the City Council by a two-thirds vote.

As for what the money will be spent on, LaChapelle said that the city is putting together a policy with the state Department of Revenue on how the money will be used and tracked. She also said that public input would be sought.

“Public infrastructure and community education are two priorities,” LaChapelle said Tuesday. “The impact of traffic in the city has increased exponentially.”

She also said the money could be used toward some of the projects in the city’s integrated stormwater management plan; providing healthy choices for youth; and in the planning, police and fire departments.

The City Council also approved a tax rate stabilization fund, which can be used to exert downward pressure on the city’s property tax rate. The mayor said she plans to budget some of the city’s free cash in fiscal year 2021 for the fund. 

“We want everybody to have a better quality of life,” she said.

Expenditures from the fund can be used toward the city’s budget but must be approved by the City Council by a two-thirds vote.




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