Nemesis and marijuana in Newton

To appreciate the irony of the following official communication you should check out our previous posts on the topic (scroll below to read the way the election was rigged, the way we were insulted, the way they shrugged off what is now “the increase in community need for services of our police, health, public works, and schools; for drug abuse and prevention services, as well as mental health services as a consequence of the operation of the marijuana businesses. Specific examples include funding positions for social workers and psychologists in the Newton Public Schools.“) High time to ban these stores!

Outrageous Demand by Three Cannabis Companies

Three of Newton’s retail marijuana businesses — Garden Remedies (697 Washington Street in Newtonville), Ascend (1089 Washington Street in West Newton Square), and Redi (24 Elliot Street in Upper Falls) — have recently threatened to sue the City of Newton if we do not refund community impact fees they paid to the City of Newton under their host community agreements (HCAs). Garden Remedies entered into its HCA with the City in 2018 and Ascend and Redi entered into their HCAs in 2019.

These host community agreements are a requirement under state law in order for marijuana businesses to obtain a state license and conduct business in any city or town. Under state law and through these HCAs, cities and towns collected community impact fees of up to three percent of each business’s gross sales.

Garden Remedies, Ascend, and Redi voluntarily agreed to make annual community impact fee payments to the City of Newton when signing the HCAs. The three businesses agreed to the amount of the community impact fees and clearly acknowledged that the fees were not only reasonable but also directly proportional to the costs of addressing the potential health, safety, and other effects or impacts of marijuana on the community in the HCAs. These are exactly the types of costs permitted under state law and guidance from the State’s Cannabis Control Commission.

Garden Remedies, Ascend, and Redi chose to locate and operate in Newton. They selected Newton as a favorable place to engage in the business of selling marijuana products. By many accounts, their operations have been financially rewarding. During much of that time, these businesses complied with their HCAs and paid their impact fees without objection.

The City of Newton spent these funds, in accordance with Massachusetts law, to address the increase in community need for services of our police, health, public works, and schools; for drug abuse and prevention services, as well as mental health services as a consequence of the operation of the marijuana businesses. Specific examples include funding positions for social workers and psychologists in the Newton Public Schools.

Now Garden Remedies, Ascend, and Redi are asserting that the community impact fees were somehow illegal. They are demanding the City refund the money spent over many years on these critical public services. This demand is not based on any court ruling or on the determination by the Cannabis Control Commission that the impact fees were illegal. In fact, while the state law governing HCAs was amended in 2022 to severely limit the ability of communities to collect impact fees in the future, that change in law did not affect the City’s rights nor the obligations of Garden Remedies, Ascend, and Redi to pay agreed upon impact fees under their HCAs. This has been confirmed by a recent decision in Middlesex Superior Court.

Garden Remedies, Ascend and Redi’s demand for a refund is outrageous.

These companies negotiated the community impact fees with us in good faith. These three businesses signed their HCA contracts willingly. They had expert lawyers negotiate the terms. I am dismayed that these businesses received significant benefits from their HCAs but are now trying to claw back the City’s bargained for benefit. The fees paid to the City were used to pay for vital programs and services and cannot be returned. Our taxpayers should not have to “pay back” these cannabis companies.

We have been diligent in monitoring the effects of marijuana sales in Newton and have been transparent in investing the community impact fees in ways that are reasonably related to the impacts of these operations on our community and residents. The City annually posts their use on the City website and annually provides documentation of their use to the marijuana businesses. Now, however, not only are these businesses demanding a refund, Ascend and Redi have refused to make their final payments to the City, breaking their contractual obligations and costing the City’s taxpayers hundreds of thousands of dollars that will need to be made up in the City’s budget.

This issue is simple — the City has complied with the requirements of the HCAs and relied on these three businesses to fulfill the promises they made in the HCAs to pay community impact fees to their host community. Skipping payments and/or attempting to claw back prior payments are clear violations of the HCAs and a breach of contract.

The Newton Law Department will vigorously defend the legality of our signed agreements.

When two parties voluntarily sign a contract, one would expect both parties to comply with the terms as long as both parties keep their end of the agreement. Newton has kept its end of the agreement. Garden Remedies, Ascend and Redi cannot just break their promise to the residents of Newton.