NORTHAMPTON – The city will no longer collect annual fees from marijuana companies to mitigate their effects, and it may be the first community in the state to do so.
The city has raised $ 3.1 million in community impact fees from marijuana companies in recent years. Mayor David Narkewicz said about $ 1 million of that money was spent on projects such as road repairs near the New England Treatment Access location on Conz Street. The Mayor said he recently advised companies that have agreements with Northampton with the host community that the city would waive the community impact fee, which is 3% of its gross annual sales, and only collect the fees instead when the city detects an impact.
"There wasn't necessarily any major impact," said Narkewicz. “A lot of the concerns, potential concerns about this industry came mostly from people who opposed legalization, thinking that crime would increase or that drug abuse etc. would increase. And I think those concerns have not been met. 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," said Narkewicz.
The city will continue to impose a 3% excise tax, which has brought more than $ 3 million to Northampton since the first retail store opened in late 2018. Unlike the impact fees, the tax goes to the city's general fund, Narkewicz said.
Previous agreements with the Northampton host community have stipulated that 3% of annual marijuana revenue from these companies is earmarked for the city to help mitigate their impact on the community. According to the law, these funds can be collected for the first five years of a facility's operation. The proceeds can only be used for community impact and will not be put into the city's general fund.
The city has used the money primarily for road repairs near NETA, as well as zebra crossing signs, pavement repairs and the creation of new parking spaces. Narkewicz said the city is using the funds to plan further work on Pleasant Street.
In early January, the mayor sent emails to the marijuana companies in which he had agreements with the hosting community, suggesting that the city reserve the right to raise up to 3% of annual marijuana revenues to mitigate the observed effects. This means that no money will be raised under this agreement until the city has an impact.
"We reserve the right to collect them if certain problems arise," he said.
The only exception was the NETA agreement on the inclusion of medical marijuana, which will expire in 2021 and will then have to be renegotiated.
Narkewicz noted that the city's voters overwhelmingly backed the election initiatives legalizing medical marijuana and recreational marijuana, and that the city has tried to treat marijuana like any other business. He also wants to "try to create as few obstacles and hurdles as possible for the industry – especially for small business owners and applicants for shares, which is an integral part of the political objectives of the legislative effort".
So far, he's received positive feedback from eight of the 17 companies the city has signed marijuana host community agreements with. New agreements have been made with three of these companies. There were no negative responses at the time, he said.
NETA praised the mayor's decision and said it would try to renegotiate its agreement with the host community.
"We would like to thank Mayor Narkewicz for his continued support of NETA from the first days our doors opened almost 5 years ago to this day," the company wrote in a statement. "He was an attorney for us like any other company in town."
Officials at Resinate, which operates a recreational marijuana pharmacy on Pleasant Street, were also pleased with the mayor's plan.
"It's kind of fresh air," said CEO Peter DeCaro. He said the company will soon renegotiate its hosting community agreement with the city.
The new agreements also remove the obligation to allocate $ 10,000 each year to marijuana education and prevention programs, Narkewicz said.
“It was a scholarship program. A nonprofit could apply for the funds they have set aside, ”he said. "To the best of my knowledge, there was one grant awarded under this program and no other grants were awarded."