MA: Marijuana Overhaul Could Face Challenges

Ron Strider

Well-Known Member
Lawmakers overhauled the rules for recreational marijuana this week, but their changes are raising concerns about legal challenges and whether communities will get enough tax revenue to cover the cost of regulating the new pot industry.

The legislation, which is awaiting Gov. Charlie Baker's approval, raises the maximum tax rate on retail pot sales to 20 percent, up from 12 percent in the existing law.

It also allows cities and towns where voters approved the 2016 ballot initiative legalizing marijuana to ban sales locally only if a majority of voters agree.

Governing boards in communities that voted against the referendum could ban the shops without a vote.

Some say that provision could be problematic. The voter-approved law allowed cities and towns to ban sales only with a community-wide referendum.

"The way this was written leaves it open to a legal challenge," said Martin W. Healy, chief operating officer and legal counsel at the Massachusetts Bar Association.

Healy said marijuana supporters in communities that won't be allowed to decide on retail pot sales by local referendum "could argue that their vote would be diminished."

"You could potentially have a group of aggrieved voters who argue that the decision should be go back to the community for a vote – not the elected officials," he said.

Senate Minority Leader Bruce Tarr, R-Gloucester, said the provision on banning pot shops "has the potential to set a very, very dangerous precedent."

"If we allow this measure to stand, we will effectively be saying 'because you voted one way or another on the ballot question you may or may not have the right to vote on the sale of marijuana,'" Tarr said in remarks ahead the Senate's 32-6 passage of the bill on Thursday. "It clearly makes this bill vulnerable to an eventual constitutional challenge."

Bans and taxes

Question 4 passed with more than 53 percent of the vote last November – even with an organized, anti-legalization campaign and opposition from top elected leaders including Baker, a Republican, and Democratic Attorney General Maura Healey. All of Cape Ann's communities – Gloucester, Rockport, Manchester and Essex – voted to approve the question.

"The law passed by voters was well-crafted and required no alteration," said Matthew Schweich, director of state campaigns for the Marijuana Policy Project which backed legalization.

Schweich said supporters "don't approve of every provision" of the changes approved by lawmakers this week but are satisfied that it will "serve the interests of Massachusetts residents and allow the commonwealth to displace the unregulated marijuana market with a system of taxation and regulation."

The voter-approved new law allows Massachusetts adults 21 and older to have up to an ounce of marijuana in public, and up to 10 ounces at home. In addition, they may grow up to a dozen plants on their property. Legislators didn't alter those provisions of the law.

Besides Cape Ann, voters in Newburyport, Salem, Amesbury, Swampscott and Beverly were among those who voted to legalize recreational marijuana.

Voters in Andover, North Andover, Peabody, Danvers and Lawrence were against.

Some communities have since taken steps to restrict or ban pot shops.

Retail marijuana sales will be charged a 10.75 percent excise tax on top of the state's 6.25 percent sales tax.

Cities and towns would be able to tax sales within their borders up to 3 percent more. Medical marijuana will remain untaxed.

Geoff Beckwith, executive director of the Massachusetts Municipal Association, said the tax levy won't raise enough money for local governments to regulate pot sales.

"It won't provide enough revenue to communities to offset the costs that they will have," he said. "The state isn't going to be going out to enforce this law. That's a cost that will be borne largely by cities and towns."

Other restrictions

A yet-to-be-created Cannabis Control Commission, overseen by the state treasurer's office, will license shops beginning in July 2018, similar to the way that alcoholic beverage licenses are handled.

The marijuana law divvies the number of pot shops per community based on 20 percent of its liquor and beer and wine licenses. Lawrence, with 31 liquor licenses, could get up to six licenses for pot shops, while Salem, with 80 liquor licenses, could get 16.

In Boston, which could get up to 50 shops, Mayor Marty Walsh and other city leaders are discussing ways to prevent clusters of stores, similar to the seedy strip clubs that occupied the Combat Zone near Chinatown and Downtown Crossing in the 1970s.

The new rules also include restrictions on marijuana marketing. TV, radio, print and even billboard advertising would be banned unless at least 71 percent of the audience is over 21.

Cities and towns would be allowed to further restrict advertising and signage.

The Senate approved an amendment from Sen. Kathleen O'Connor-Ives, D-Newburyport, that requires pot products to be labeled with a warning to keep it away from children.

"Packaging needs to have direct and clear warnings to ensure children understand the risks and ramifications of ingesting these products," she said in a statement.

Baker, who opposed legalized marijuana, has 10 days to sign the bill, veto it, or send it back to lawmakers with recommended changes.

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