Northampton to waive mitigation fees for pot shops

  • Matt Yee, director of retail sales for Resinate, and dispensary manager Jennifer Hawkins pose in the marijuana dispensary’s new outlet on Pleasant Street in Northampton, Nov. 18. GAZETTE FILE PHOTO

  • The exterior of New England Treatment Access, or NETA, in Northampton. GAZETTE FILE PHOTO

  • Northampton Mayor David Narkewicz attends a celebration at NETA’s Northampton location marking one year of recreational marijuana sales. CONTRIBUTED PHOTO

Published: 1/26/2021 6:45:50 PM

NORTHAMPTON — The city will no longer collect annual fees from marijuana businesses to mitigate their impacts, and it may be the first community in the state to do so.

The city has collected $3.1 million in the so-called community impact fees over the past few years from marijuana businesses. Mayor David Narkewicz said that about $1 million of that money has been spent on projects like road repairs near the Conz Street location of New England Treatment Access. The mayor said he recently told businesses that have host community agreements with Northampton that the city would waive the community impact fee, which is 3% of their gross annual revenue, and instead only collect the fees if the city identifies impacts.

“There haven’t been necessarily any major impacts,” Narkewicz said. “A lot of the concerns, potential concerns, about this industry mostly came from people who opposed legalization and thought there would be increases in crime, or there would be increases in drug abuse, etcetera. And I think those concerns have not materialized. We certainly haven’t seen that here in Northampton.”

The city may be the first in the commonwealth to make the change. “I’m not really aware of any other community,” Narkewicz said.

The city will continue to collect a 3% excise tax, which has brought more than $3 million into Northampton since the first retail shop opened in late 2018. Unlike the impact fees, the tax goes into the city’s general fund, Narkewicz said.

Previous host community agreements in Northampton have stipulated that 3% of annual marijuana revenue from these businesses be set aside for the city to use to mitigate their impacts on the community. Under law, these funds can be collected for the first five years of an establishment’s operation. The revenues can only be used for community impacts, and are not put into the city’s general fund.

The city has used the money largely for road repairs near NETA, and also for crosswalk signs, sidewalk repairs, and the creation of new parking spaces. Narkewicz said the city is planning more work on Pleasant Street with the funds.

In early January, the mayor sent emails to the marijuana companies it has host community agreements with proposing that instead of having this money collected, the city would reserve the right to collect up to 3% of annual marijuana revenues to mitigate any impacts it finds. This means that until the city finds impacts, money wouldn’t be collected under this arrangement.

“We’re reserving the right to collect them when specific issues arise,” he said.

The only exception to this was NETA’s medical marijuana host community agreement, which is set to expire in 2021 and be subject to renegotiation then.

Narkewicz noted that the city’s voters overwhelmingly backed the ballot initiatives that legalized medical and recreational marijuana, and that the city has tried to treat marijuana like any other business. He also wants to “try to put up as few barriers and hurdles to the industry — particularly to small entrepreneurs and equity applicants, which is a major part of the public policy goals of the legislative effort.”

So far, he has gotten positive responses from eight of the 17 companies with which the city has marijuana host community agreements. New agreements have been worked out with three of those businesses. There have been no negative responses at this time, he said.

NETA praised the mayor’s decision, and indicated that it will be looking to renegotiate its host community agreement.

“We want to thank Mayor Narkewicz for his enduring support of NETA from the first days our doors opened almost 5 years ago to today,” the company wrote in a statement. “He has been an advocate for us as he has been for every other business in the city.”

Officials at Resinate, which operates a recreational marijuana dispensary on Pleasant Street, were also pleased with the mayor’s plan.

“It’s kind of a breath of fresh air,” CEO Peter DeCaro said. He said that the company will soon renegotiate its host community agreement with the city.

The new agreements also eliminate a requirement to give $10,000 each year for marijuana education and prevention programs, Narkewicz said.

“It was a grant program. A nonprofit could apply for those funds they were sort of set aside,” he said. “To my knowledge, there was one grant that was made under that program and there hasn’t been any other grants made.”

Bera Dunau can be reached at bdunau@gazettenet.com. Greta Jochem can be reached at gjochem@gazettenet.com.




Daily Hampshire Gazette Office

115 Conz Street
Northampton, MA 01061
413-584-5000

 

Copyright © 2021 by H.S. Gere & Sons, Inc.
Terms & Conditions - Privacy Policy