(1)
935
CMR 501.180 is governed by M.G.L. c. 94G
§ 3(d)(1) through (5), as amended by St. 2022, c. 180 which went into
effect on November 9, 2022. Pursuant to M.G.L. c. 94G, § 4(a), the
Commission is authorized to review, regulate, enforce, and approve HCAs and to
develop a Model Host Community Agreement.
(2)
General Requirements for Host
Community Agreements. The Commission shall review and approve each
HCA as part of a completed License application and at each License renewal. The
parties to an HCA relative to an application for licensure are a License
Applicant and a Host Community. The parties to an HCA relative to an
application for renewal of licensure are a Host Community and an MTC.
(a) A License Applicant seeking a new License
to operate an MTC shall negotiate and execute a compliant HCA with a Host
Community, unless a compliant HCA Waiver has been submitted pursuant to
935
CMR 501.180(5). A compliant
HCA or compliant HCA waiver must be submitted in order for a License
application to be deemed complete pursuant to
935
CMR 501.102.
(b) An MTC seeking renewal of a License to
continue to operate in a Host Community shall have an HCA that complies with
935
CMR 501.180 unless a compliant HCA Waiver has
been submitted pursuant to
935
CMR 501.180(5).
(c) An HCA submitted by a License Applicant
or Medical Marijuana Treatment Center which is determined to conform with the
Model Host Community Agreement will be presumed compliant for purposes of this
section.
(d) A Host Community shall
negotiate the terms of an HCA in good faith.
(e) Each of the parties shall ensure that
HCAs satisfy the following minimum acceptable requirements:
1. The parties shall ensure that references
in an HCA to a License Applicant or MTC are consistent with both the business
entity name certified and recorded with the Secretary of the Commonwealth and
the business entity name stated either in a License Applicant's license
application or on an MTC's license record as maintained by the
Commission.
2. The parties shall
ensure that HCAs set forth all of a Host Community's conditions for allowing an
MTC or a License Applicant to operate in the community. A Host Community may
not contract for any purpose, on any terms, or under any conditions
inconsistent with any applicable provision of Massachusetts General Laws. No
Host Community may impose an unreasonable condition or a term that is
Unreasonably Impracticable in an HCA. A condition may be presumed reasonable
if:
a. The condition is required under a Host
Community's local rules, regulations, ordinances, or bylaws;
b. The condition has been deemed necessary to
ensure public safety and proposed by the chief law enforcement authority and/or
fire protection chief in a Host Community with explanation and detail why the
condition is necessary for public safety.
c. The condition has been deemed necessary to
ensure public health and proposed by the chief public health authority in a
Host Community with explanation and detail why the condition is necessary for
public health;
d. The condition is
a local requirement customarily imposed by a Host Community on other,
non-cannabis businesses operating in the community;
e. The condition is required by
law;
f. The condition does not
conflict with other laws; or
g. The
condition is otherwise deemed reasonable by the Commission based on particular
circumstances presented by an HCA or contracting parties.
3. The parties shall ensure that HCAs include
a statement of all stipulated responsibilities between a Host Community and a
License Applicant or between a Host Community and an MTC including, but not
limited to, the following:
a. A provision
requiring a Host Community to annually transmit its invoice of claimed impact
fees to an MTC within one month of the anniversary of the date an MTC received
final licensure;
b. A provision
explicitly identifying any generally occurring fees to be charged by a Host
Community. Generally occurring fees are customarily imposed on other
non-cannabis businesses operating in a Host Community and shall not be
considered a CIF (
e.g., routine water, property tax, sewer,
trash pickup
etc.).
4. The parties shall ensure that HCAs include
the following information:
a. The specific MTC
license operations permitted under the terms of the HCA;
b. The name, signature, and title of the
individual(s) authorized to enter into HCAs on behalf of a Host Community as a
contracting authority;
c. The name,
signature, and title of the individual(s) authorized to enter into HCAs on
behalf of a License Applicant or an MTC as an authorized
representative;
d. The date(s) of
execution by both parties;
e. The
effective date of an HCA; and
f.
The duration of an HCA.
5. The parties shall ensure that HCAs provide
clear, specific terms regarding a Host Community's assessment of a CIF if
applicable, including, but not limited to, a provision requiring a Host
Community to transmit its invoice of claimed impact fees to an MTC within one
month of the anniversary of an MTC's final license date.
(f) The parties may include a clause in an
HCA whereby the parties voluntarily agree to bring HCA disputes before a
private mediator retained by the parties. Neither party may unilaterally compel
private mediation.
(g) Approval of
HCAs may be conditioned on a Host Community being in good compliance standing
with the Commission relative to any HCA to which the Host Community is a
contracting party.
(h) The
Commission may deem a provision of an HCA invalid, and therefore unenforceable,
based on a finding that the provision violates M.G.L. c. 94G,
935 CMR
500.000:
Adult Use of Marijuana or
935 CMR
501.000. The Commission may also declare an HCA or a
provision of an HCA voidable upon deeming the HCA as a contract of
adhesion.
(i) The Commission may
decline to approve an HCA on the basis of any other ground that serves the
purposes of M.G.L. cc. 94G and 94I,
935 CMR
500.000, or
935 CMR
501.000.
(j) An MTC that seeks a name change pursuant
to 935 CMR 501.104(1)
after execution of an HCA must provide
notice of the change to the Host Community in a form and manner determined by
the Commission. An MTC that seeks a location change to another Host Community
shall submit a new HCA to the Commission. An MTC that seeks a location change
within the same Host Community after execution of an HCA may be required to
provide an amended HCA to the Commission. An MTC that submits a Change of
Ownership request for the transfer of a license may be required to submit a new
or amended HCA to the Commission.
(k)
Prohibitions.
1. No License Applicant, MTC, or Host
Community shall enter into an HCA that includes a promise to make a future
monetary payment, in-kind contribution, or charitable contribution. A License
Applicant or MTC may voluntarily provide organizations with monetary payments,
in-kind contributions and charitable contributions after executing an HCA, as
long as a License Applicant or MTC's actions are not performed because of a
condition imposed by a Host Community, whether explicitly or
implicitly.
2. A contractual
financial obligation, other than a CIF, that is explicitly or implicitly a
factor considered in or included as a condition of an HCA is unenforceable,
subject to the following exceptions:
a.
References in an HCA to an MTC's obligations to pay any fees associated with
sales tax, excise tax on Marijuana and Marijuana Products, optional local tax,
or as otherwise provided in M.G.L. c. 94G, M.G.L. c. 64H, and M.G.L. c.
64N.
b. References in an HCA to an
MTC's obligations to pay a Host Community for generally occurring fees
associated with operating in a Host Community (
e.g., water,
sewer, property tax,
etc.).
3. No Host Community may mandate or otherwise
require that the CIF be a certain percentage of an MTC's total or gross sales
as a term or condition of an HCA.
4. A Host Community shall not demand a CIF
exceeding 3% of the gross sales of an MTC as a term or condition of an
HCA.
5. No License Applicant, MTC,
or Host Community will use Inducements to negotiate or execute an HCA. No
municipality or Host Community shall negotiate or renegotiate an HCA through
the use of undue influence, duress, coercion, intimidation, threats, or any
strong-arm tactics including by threat of dissolution of the HCA.
6. No Host Community may rely on other
written instruments, contracts, or agreements to impose terms or conditions on
a License Applicant, Marijuana Establishment, or Medical Marijuana Treatment
Center outside of an HCA.
(l) The following terms, conditions, or
clauses are prohibited in an HCA:
1. A
provision that discourages any party from bringing a civil cause of action or
other legal challenge relative to an HCA or to an individual term or provision
of an HCA;
2. A provision that
requires a License Applicant or MTC to make upfront payments as a condition for
operating in the Host Community;
3.
A provision that affords a Host Community sole and absolute discretion on how a
Host Community will spend a CIF;
4.
A provision waiving an MTC's ability to dispute whether impact fees claimed by
a Host Community are Reasonably Related and properly due and payable as a
CIF;
5. A provision that
categorically deems a Host Community's claimed impact fees to be reasonably
related or that otherwise excuse a Host Community from calculating impact fees
based on the actual operations of an MTC;
6. A provision that imposes legal, overtime,
or administrative costs or any costs other than a CIF on an MTC with the
exception of an MTC's tax obligations or its responsibility for paying routine,
generally occurring municipal fees;
7. A provision that obligates an MTC to set
aside money in an escrow, bond, or other similar account for a Host Community's
use or purposes;
8. A provision
that requires an MTC to make any additional payments or obligations including,
but not limited to, monetary payments, in-kind contributions, providing
staffing, advance payments, or charitable contributions by an MTC to a Host
Community or any other organization.
9. A provision including or otherwise deeming
good faith estimates, unquantifiable costs, generalized expenses, or pro-rated
expenses as a CIF.
(3)
Review and Certification of
Host Community Agreements. The Commission, through its Executive
Director or the director's delegee, shall review an HCA submitted by a License
Applicant or an MTC and make a determination certifying whether the HCA, in
whole or in part, satisfies Commission requirements.
(a) The Commission shall complete its review
of an HCA within 90 days of receiving an HCA from an MTC. The Commission may
request additional information or send a determination notice identifying
deficiencies in an HCA. Submission of an amended HCA resets the 90-day period
of Commission review.
(b)
Review of HCAs Submitted by License Applicants.
1. All applications for initial licensure
submitted on or after March 1, 2024, must include an HCA that complies with
935 CMR
501.000
et seq. or a compliant HCA
Waiver.
2. The Commission may
request additional information from a License Applicant or a Host Community in
connection with its review.
3. The
Commission shall send a notice of its HCA determination to both a License
Applicant and a Host Community within 90 days of receipt of an HCA.
4. If the Commission determines that a
License Applicant's HCA does not comply with
935
CMR 501.180, then the HCA determination
notice shall state the following:
a. The
factual basis for the Commission's finding of noncompliance, including
identification of the noncompliant term(s), condition(s), or provision(s) of
the HCA, if applicable;
b. The
parties' option to correct the noncompliance and submit an amended HCA; and
c. The parties' option to submit
an HCA Waiver that complies with
935
CMR 501.180(5);
and
5. Failure to submit
a compliant HCA or a compliant HCA Waiver with an application for licensure may
result in an application remaining incomplete pursuant to
935
CMR 501.102.
(c)
Review of HCAs Submitted by
an MTC.
1. All renewal
applications submitted on or after March 1, 2024, must include an HCA that
complies with
935 CMR
501.000
et seq. or a compliant HCA
Waiver.
2. The Commission may
request additional information from an MTC or a Host Community in connection
with its review.
3. The Commission
shall send a notice of its HCA determination to both an MTC and a Host
Community within 90 days of receipt of the HCA. The determination notice shall
identify whether the HCA, in whole or in part, complies with
935
CMR 501.180.
4. If the Commission determines that an MTC's
HCA does not comply with
935
CMR 501.180, then the HCA determination
notice shall provide the following:
a. The
factual basis for the Commission's finding of noncompliance, including
identification of the noncompliant term(s), condition(s), or provision(s) of
the HCA, if applicable;
b. The
parties' option to correct the noncompliance and submit an amended HCA;
c. The parties' option to submit
an HCA Waiver that complies with
935
CMR 501.180(5); and
d. The parties' option to proceed
under an executed HCA that conforms with the Commission's Model Host Community
Agreement, to be relied on in the interim until the parties come to an
agreement;
5. A Host
Community shall notify an MTC if it no longer intends to continue as a Host
Community for an MTC. A Host Community shall not discontinue relations with an
MTC in bad faith. On receipt of a notice of discontinuance from a Host
Community, the MTC shall notify the Commission. On receipt of a notice of
discontinuance, an MTC may submit a request for equitable relief to the
Commission consistent with
935
CMR
501.180(3)(c)(6).
6. If a Host Community discontinues relations
with an MTC, or on submission of a mutual abrogation agreement executed by both
a Host Community and an MTC, an MTC may submit a request for equitable relief
to the Commission.
a. An MTC's request for
equitable relief must identify facts, information, and any documentation to
support why an MTC should be considered for equitable remedies. An MTC shall
ensure that the request for equitable relief includes a Host Community's notice
under
935
CMR
501.180(3)(c)4.d.
b. Commission Staff will conduct a paper
review of the petition and make a recommendation to the Commission.
c. The Commission may exercise its discretion
whether to grant one or more of the following equitable remedies to an MTC:
(i) Extension of a License expiration date
without incurring additional prorated fees;
(ii) Waiver of a Change of Location
fee;
(iii) institution of
procedures for winding down an MTC's operations at the licensed
Premises;
(iv) Other equitable
relief as determined by the Commission.
d. If the Commission grants or denies
equitable relief to an MTC, the agency will provide notice of its decision to
an MTC and a Host Community. A Host Community or an MTC may seek relief from a
court of competent jurisdiction.
7. Failure to submit a compliant HCA or
compliant HCA Waiver may constitute grounds for denial of a renewal
application.
8. Any action
subsequently taken to deny an MTC's renewal application due to failure to
produce a compliant HCA or a compliant HCA Waiver shall afford MTCs a right to
hearing pursuant to
935
CMR 501.500.
a. If an MTC elects a hearing pursuant to
935
CMR 501.500, the administrative proceeding
must be conducted pursuant to
801
CMR 1.01, Formal Rules.
b. A Host Community may seek intervention as
a party to the hearing.
(d) Complaints Alleging Noncompliance with
935
CMR 501.180
1. Consistent with its power to enforce HCAs,
the Commission may, at its discretion, investigate any complaint alleging
noncompliance with the requirements in this section and take enforcement action
as provided in
935 CMR
501.000.
2. An interested person may file a complaint
with the Commission alleging noncompliance with an HCA requirement under
935
CMR 501.180. Nothing in this subdivision
shall be construed to prevent an MTC or a Host Community from bringing a
private breach of contract action in a court of competent jurisdiction
regarding an alleged breach of specific promises mutually agreed to in the
parties' HCA.
3. If the Commission
substantiates an allegation of noncompliance with HCA regulatory requirements,
then the Commission may take administrative or enforcement action against a
Licensee or a Host Community including sending a notice of deficiency,
requesting additional information, or otherwise taking action as provided under
935 CMR
501.000.
4. Failure by a Host Community to correct the
noncompliant conduct may result in one or more of the following:
a. Issuance of sanctions pursuant to
935
CMR 501.360;
b. Loss of a Host Community's good compliance
standing for purposes of
935
CMR 501.180(2)(e);
c. Identification of a Host Community lack of
good compliance standing in a form and manner determined by the Commission; or
d. Abstaining from consideration
of any new license applications affiliated with a Host Community until a Host
Community's good compliance standing is restored.
(4)
Community Impact Fees.
(a)
General
Requirements. Pursuant to M.G.L. c. 94G, § 4(a1/2), the
Commission is charged with establishing criteria for reviewing, certifying, and
approving CIFs.
1. To qualify as a CIF, an
impact fee alleged by a Host Community must be Reasonably Related.
2. On certification by the Commission, a CIF
becomes properly due and payable unless disputed by an MTC consistent with
935
CMR
501.180(4)(c)4.a.
3. A Host Community may assess a CIF as a
condition of allowing a License Applicant or an MTC to operate or continue to
operate in its community. A Host Community may also opt not to assess a
CIF.
4. A Host Community may also
opt not to assess a CIF.
5. A Host
Community shall ensure that the initial invoice period of claimed impact fees
covers a one-year period that starts from the date the Commission grants an MTC
a final license. A Host Community shall further ensure that all subsequent,
one-year invoice periods are consistent with the anniversary of an MTC's final
license date. The Commission will not certify any impact fees attributable to
dates outside of the applicable invoice period.
6. A Host Community seeking to assess a CIF
shall transmit an itemized invoice to an MTC in a form and manner determined by
the Commission documenting claimed impact fees arising from the preceding year
of an MTC's operations.
a.
Sunshine Requirement: A Host Community shall ensure
that impact fee invoices include a specific description of how the claimed
impact fees were spent, including each line item for each good or service
charged stating its cost, purpose, and relation to an MTC's
operations.
b. A Host Community
shall transmit its impact fee invoice to an MTC no later than one month after
the anniversary of the date the MTC received a final license from the
Commission. A Host Community's failure to transmit the impact fee invoice to an
MTC within the prescribed time shall result in a forfeiture of any CIF for the
applicable year of operations.
c. A
Host Community shall ensure that the impact fee invoice is restricted to the
license number(s) operating from the licensed Premises alleged to have impacted
the community. For CMOs, a Host Community shall transmit an impact fee invoice
to a Marijuana Establishment and an MTC.
7. Within 30 calendar days of receiving a
Host Community's invoice of claimed impact fees, an MTC shall submit the
invoice and any supporting documentation, if applicable, to the Commission in a
form and manner determined by the Commission.
8. An MTC that has agreed to pay a CIF under
its HCA shall annually pay any undisputed CIF no later than the end of the
current fiscal year or within 90 days of the date of the Commission's CIF
certification, whichever is later. This subdivision shall not be construed to
require an MTC to pay a CIF if an MTC's payment obligation is the subject of a
nonfrivolous legal dispute either through the Commission's administrative
hearing process or before a court of competent jurisdiction.
(b)
Prohibited
Practices.
1. A Host Community
shall not attempt to collect impact fees relating to any operations occurring
prior to the date an MTC is granted a final license by the
Commission.
2. A Host Community
shall not attempt to collect impact fees from any MTC that has held a final
license for more than nine years.
3. In circumstances where the licensed
Premises is the site of multiple final licenses, no Host Community may amplify
its assessment of claimed impact fee(s) by assigning the same impact fee(s) to
each final license operating from the licensed Premises without regard to the
distinct operations of each licensed entity.
4. No Host Community may rely on other
written instruments, contracts, or agreements to assess Community Impact Fees.
No Host Community may include additional payments or obligations in its invoice
of claimed impact fees, including but not limited to monetary payments, in-kind
contributions and charitable contributions by an MTC to a Host Community or any
other organization.
5. A Host
Community shall not include any legal costs incurred by a Host Community to
defend against a lawsuit brought by an MTC in its invoice of claimed impact
fees.
6. No Host Community may
modify the effective date of a preexisting CIF for any final license that
becomes subject to an ownership or control change under
935
CMR 501.104(1).
(c)
Commission Review
and Certification of CIFs. The Commission, through its Executive
Director, shall review a Host Community's invoice of claimed impact fees and
make a determination certifying, in whole or in part, the CIF that may be
assessed for the preceding year of an MTC's operations based on a finding that
an impact fee(s) is Reasonably Related to an MTC's operations.
1. An MTC shall provide verification of its
Gross Annual Sales, including wholesale revenue generated by Marijuana
Cultivators and Marijuana Product Manufacturers, to the Commission with its
transmission of a Host Community's invoice of claimed impact fees.
a. An MTC shall submit a summary of all sales
of Marijuana, Marijuana Products, Marijuana Accessories and MTC Branded Goods
for that license to patients and other Licensees, as applicable.
b. If product was wholesaled or otherwise
sold or transferred to other Licensees at no cost or reduced cost, an MTC shall
apply the average cost per gram or milligram to the amount sold or transferred
to establish and report the fair market value of the product, and include that
amount in its summary submission.
2. The Commission may make a final
determination on Gross Annual Sales relying on the factors in
935
CMR 501.180(4)(c)3., and any
additional information gathered. The Gross Annual Sales determined by the
Commission, pursuant to
935
CMR 501.180(4)(c)3., shall
be used for purposes of the CIF in circumstances where product was wholesaled
or otherwise sold or transferred to other Licensees at no cost or reduced cost,
and shall not be used for any other purposes related to other obligations,
including tax filings, for an MTC.
3. The Commission may determine the Gross
Annual Sales of an MTC using the following factors:
a. Patient Sales as represented by an
MTC;
b. Patient Sales as
represented by the Commission Seed-to-sale System of Record;
c. Fair Market Value of wholesaled or
transferred Marijuana, Marijuana Products, Marijuana Accessories and MTC
Branded Goods;
d. Any wholesaled or
transferred Marijuana, Marijuana Products, Marijuana Accessories and MTC
Branded Goods that has been refunded or is otherwise the subject of a voided
sale;
e. Value of services
rendered, wholesaled or transferred Marijuana, Marijuana Products, Marijuana
Accessories and MTC Branded Goods as represented by the Commission Seed-to-sale
System of Record; and
f. Other
factors as determined necessary by the Commission to calculate the Gross Annual
Sales by the licensee in the absence of available information as listed in
935
CMR
501.180(4)(c)2.
4. The Commission shall provide notice of its
CIF determination to an MTC and a Host Community. The Commission's notice will
provide an MTC with the following options:
a.
An MTC may request an administrative hearing before an independent Hearing
Officer of the Commission pursuant to
935
CMR 501.500 to challenge the findings of fact
and conclusions of law. Any administrative proceeding elected by an MTC must be
conducted pursuant to
801
CMR 1.01:
Formal Rules. The
Host Community may seek intervention as a party to the hearing; or
b. A Licensee may seek court intervention to
independently review a Host Community's claimed impact fees by bringing a
breach of contract action against a Host Community in a court of competent
jurisdiction.
5. The
parties may elect to bring a dispute between the parties before a private
mediator retained by the parties at any time if such mediation is a term of the
HCA or is voluntarily elected by the parties. Neither party may unilaterally
compel private mediation.
6. After
a CIF dispute has resolved, an MTC must provide proof of payment of the
certified CIF with its renewal application. If an MTC prevails in a CIF
dispute, an MTC must also provide proof that its CIF payment obligation has
been eliminated.
(5)
Waiver of Host Community
Agreements.
(a) A Host Community
may waive the regulatory requirement to have a compliant HCA by submitting an
HCA Waiver to the Commission that complies with
935
CMR 501.180(5).
(b) An HCA Waiver constitutes a total
relinquishment of the requirement that an Applicant or MTC enter into an HCA
with a Host Community. No party to an HCA may use an HCA Waiver to waive
individual provisions of an HCA.
(c) An HCA Waiver may be submitted relative
to an application for licensure or an application for renewal of licensure. A
Host Community and an Applicant or MTC may also submit an HCA Waiver after both
parties have executed an HCA.
(d)
Acceptance of an HCA Waiver is limited to the specific application or license
number(s) stated in the HCA Waiver request.
(e) The Commission shall determine whether an
HCA Waiver complies with
935
CMR 501.180(5).
(f) An HCA Waiver that sets an expiration
date or any conditions is deemed noncompliant.
(g) An HCA Waiver determined to be the result
of an Inducement is deemed noncompliant.
(h) If a Host Community elects to submit an
HCA Waiver, a Host Community's submission shall be in a form and manner
determined by the Commission and include, at minimum, the following
information:
1. Identification of the specific
application or license number intended to be exempt from the requirement to
have a compliant HCA;
2.
Identification of a License Applicant or MTC in a manner consistent with both
the business entity name certified and recorded with the Secretary of the
Commonwealth of Massachusetts and the business entity name stated either in a
License Applicant's license application or on an MTC's license record as
maintained by the Commission.
3.
Printed name and signature of the individual(s) authorized to represent and act
on behalf of a Host Community;
4.
Printed name and signature of the individual(s) authorized to represent and act
on behalf of an Applicant or MTC;
5. The date of each parties' signature;
and
6. An attestation that the HCA
Waiver was mutually agreed upon by both parties and executed in good faith.
(i) An HCA Waiver that is
executed and recorded with the Commission remains in full force and effect
until such time as it is rescinded. An HCA Waiver may only be rescinded on
Commission approval of an HCA subsequently executed and submitted by the
parties.
(j) An HCA waiver is not
subject to review under the criteria in
935
CMR 501.850 regarding general
waivers.