Massachusetts’ highest court has tried two cases at the community’s discretion in granting cannabis licenses Foley Hoag LLP – Cannabis and the Law

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On February 3, the Massachusetts Supreme Court, the Supreme Judicial Court (“SJC”), will hear two cases in which the local authority for licensing adult cannabis companies, Mederi Inc. v City of Salem and CommCan, Inc . v. City of Mansfield.

The facts that led to the Mederi case began nearly three years ago in 2018 when Mederi Inc. refused to enter into a Host Community Agreement (“HCA”) with the City of Salem after a nomination committee for more than the city’s five assigned marijuana retail spaces has been . The Supreme Court ruled that Salem did not act arbitrarily or capriciously to refuse to conduct an HCA with Mederi. The Supreme Court also ruled that GL c. 94G, § 3 also gives municipalities a wide discretion to determine with whom an HCA should be carried out and that the legislature did not intend that the Cannabis Control Commission (“CCC”) is the only cannabis licensing authority. Mederi appealed. The appeal was due to go to the Massachusetts Court of Appeals when the SJC sua sponte announced that it would take the case to court.

The SJC will likely weigh the scope of authority a community has to complete an HCA with an applicant for a cannabis license. In his brief, Mederi argues that once the city had received zoning approval, it was required to enter an HCA with it, otherwise the city would exercise a licensing authority that, in its view, is reserved exclusively for the CCC. Alternatively, the city argues that “the negotiation and implementation of an HCA by the city is a discretion and not a ministerial act”. The commission submitted an amicus briefing in which it agreed with the city that the discretion as to whether an HCA should be granted rests with a municipality, not the CCC, but that it supports the reform of the HCA process. According to the Commission, the HCA process particularly disadvantages applicants for social justice. .

The SJC will also hear the CommCan case. In 2016, CommCan, Inc. CommCan and the City of Mansfield entered into an HCA and CommCan was licensed by the Commission to operate a medical marijuana dispensary in Mansfield. After the legalization of adult cannabis in Massachusetts, CommCan attempted a new HCA with Mansfield to allow CommCan to act as an adult retailer. Mansfield denied CommCan’s motion, and CommCan filed a lawsuit in the Massachusetts Land Court. The Land Court and the Superior Court both won CommCan and the city appealed to the Massachusetts Appeals Court. As in Mederi, the SJC sua sponte announced that it would listen to the appeal.

In CommCan, the SJC will likely have to grapple with what it means to be “engaged” in the cannabis business. The zoning regulations in Mansfield allow medical marijuana treatment centers but prohibit adult cannabis operations in the zone where CommCan is located, which in this case is at the heart of the problem. CommCan argues that a Massachusetts law prohibits local authorities from applying zoning ordinances to prevent medical marijuana treatment centers from being converted to adult businesses. The law states that a city may not be able to prevent a marijuana treatment center engaged in the cannabis business from becoming an adult business. According to Mansfield, the law does not apply because CommCan has not yet “operated” the sale of medical marijuana because CommCan has not constructed a building or started selling medical marijuana on the property.

For further information you can access the Mederi-Docket and the Briefs here and the CommCan-Docket and the Briefs here.