Athol awaits word on cannabis lawsuits

ATHOL – The town is holding off on using nearly $1 million collected from cannabis businesses, due to several ongoing lawsuits across the state.

At the Selectboard meeting last Tuesday, April 29, Town Manager Shaun Suhoski explained that the money comes from host community agreements signed with cannabis businesses immediately following the legalization of marijuana in the Commonwealth.

Suhoski said that communities were initially given the option of including in those agreements a requirement that cannabis-related businesses pay a community impact fee of 3%, over and above the 3% sales tax municipalities can charge marijuana retailers.

“We had agreements in the first batch (of agreements),” said Suhoski, “MassGrow being the biggest operator, and 1620 Labs in the old Agway building. So, we have an amount of funds that Town Meeting had transferred to a special purpose stabilization fund for marijuana.

“These are one-time because the law changed….And there are several lawsuits pending where certain companies are suing to get back the monies that other communities have collected.”

Athol is not among the towns being sued.

Town Accountant Amy Craven told last week’s meeting the special purpose account – created in 2019 – currently contains slightly more than $967,000.

“Essentially, we collected one year of the fee from two of the businesses,” Suhoski told the Athol Daily News. “We held it, because the Legislature then was reforming the law. Because the law was changing, and with the potential for litigation, we just set it aside.”

Ultimately, said Suhoski, the state legislature brought an end to the additional 3% that communities could collect over the sales tax. When that happened, he explained, the town stopped collecting the community impact fees.

“We haven’t collected a penny since,” he added.

Suhoski did add a “placeholder” article at the end of the draft warrant for the Annual Town Meeting, which the Selectboard reviewed at last week’s meeting. If passed, it would allow funds in the special purpose stabilization fund to be used elsewhere in the budget.

“It was just to bring it forward for transparency to let the board look at it,” he said. “It’s not something I’m going to recommend. I’m going to recommend that we hold a bit longer to see how some of the litigation concludes across the state.”

While MassGrow and 1620 Labs no longer pay a community impact fee to the town, the two cannabis retailers in Athol, Boston Garden and Hometown Harvest – when it opens – continue to pay a 3% sales tax to the town. Suhoski said revenue from the sales tax amounts to about $75,000 per year.

When the special purpose stabilization fund was created, the money was to be used for specific purposes – 30% for the OPEB liability trust fund; 30% to stabilization or capital stabilization; 30% to downtown infrastructure; and 10% for education or enforcement.

“That’s our current policy, but there are new members on the Finance Committee and on the Selectboard,” he said. “They can certainly revisit it; that’s certainly within their authority. But that’s the framework that’s in place right now.”

The Selectboard, Town Counsel John Barrett, Capital Program Committee Chair Jim Smith, and Finance and Warrant Advisory Committee Chair Ken Duffy indicated at last week’s meeting that the funds in the special account should stay there, until at least one of the suits relative to the community impact fees has been concluded.

A final decision will be made by the Selectboard at its meeting Tuesday, May 6.

Greg Vine can be reached at gvineadn@gmail.com.