Mass. Has Eliminated Cannabis ‘Impact Fees,’ But Many Towns Are Still Charging Them

Almost three years ago, state lawmakers decided to end “community impact fees” on cannabis businesses. The charge of up to 3 percent of sales collected by cities and towns was intended to address the side effects some feared would follow new dispensaries and grow facilities, such as traffic congestion, crime, and rampant substance abuse.

When those impacts did not arise, policymakersruled that the fees were unnecessary and instead required towns to provide a breakdown of how the money would be spent beforebusinesses have to pay up.

But the reforms have changed little: Dozens of communities across Massachusetts are still demanding impact fees from marijuana companies amounting to thousands of dollars each year, while some decline to return the funds they’ve already collected — at least $50 million in all since 2018.Officials have spent the money on new police cruisers, six-figure nonprofit donations, or simply, to grow their general budget.

Now a flurry of litigation is underway, as cannabis entrepreneurs fight to block the fees from being spent on things they say have nothing to do with cannabis. Many believe that the prolonged battle over the money is yet another drag on the emerging industry, suffering from plummeting consumer prices and an oversaturated market. Pot businesses, strangled by high federal taxes and persistent issues with investment and credit lines, are already closing rapidly across the state.

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