Great Barrington — The state’s Cannabis Control Commission is looking to intervene in lawsuits filed by three marijuana dispensaries against the town. This comes after several months of litigation in a case between the town and the three dispensaries: Theory Wellness, Rebelle Dispensary owners Community Growth Partners, and Farnsworth Fine Cannabis.
The three companies are suing the town over previously signed Host Community Agreements. The dispensaries filed the lawsuits against the town in Middlesex Superior Court in March 2024.
According to a court document filed on November 11, general counsel representing the Cannabis Control Commission contacted both the dispensaries and the town on November 5 to state that the commission plans to intervene in the case. The general counsel notified the parties that the commission was waiting for approvals from the Attorney General’s Office; however, there have been no further updates on the case since the filing.
Case recap: Suing over money paid to town pursuant to Host Community Agreements
Back in February, marijuana establishments Theory Wellness and Community Growth Partners threatened to sue the town over previously signed Host Community Agreements (HCAs).
Theory Wellness, located at 394 Stockbridge Rd, signed its HCA with the town on October 17, 2016, and another one on June 18, 2018.
Community Growth Partners, which owns Rebelle Dispensary located at 783 South Main Street, signed its HCA with the town on March 20, 2019.
Through a letter from attorney David Rich with Todd & Weld LLP of Boston, the two companies demanded that Great Barrington return over $5 million that they paid the town over the years as part of the agreements. “During the term of the parties’ respective HCA, both Theory Wellness and CGP have been forced to tender to the town millions of dollars in unlawful Community Impact Fees, legal fees and additional costs, payments, and reimbursements,” Rich writes in his letter. “It further appears that the town is unjustifiably refusing to negotiate or enter into new HCAs, ones which comply with the actual requirements of Massachusetts law, with either of my clients until such time as each pays the town additional unlawful fees. The town’s conditioning its willingness to enter into a new, legally compliant HCA upon the requirement that my clients make patently illegal payments to the town is extortionate in fact, and reflects yet another violation of their legal rights.”
At the time the letter was sent, Theory Wellness Chief Marketing Officer Thomas Winstanley issued the following joint statement on behalf of Theory Wellness and Community Growth Partners (AKA Rebelle):
Theory Wellness and Rebelle have requested that the town return illegal impact fees which we have been forced to pay over the years despite the Town of Great Barrington repeatedly acknowledging in writing that our businesses caused no negative impacts. On the contrary, in addition to our impact fees, we have paid millions of dollars in taxes, employed dozens, and brought hundreds of thousands of visitors to the area.
A Host Community Agreement is a unique regulatory requirement for the cannabis industry in Massachusetts and unlike any regulatory requirement in any other state. Massachusetts General Laws Chapter 94G requires that any fees charged under a Host Community Agreement (HCA) must only be used to offset the ‘costs imposed upon the municipality by the operation of the marijuana establishment.’
To ensure that HCA money is spent legally, the Cannabis Control Commission (CCC) requires that every year we ask Great Barrington to calculate and disclose the costs they incurred.
Back on March 13, one day before the lawsuits were filed, Town Manager Mark Pruhenski issued a statement via the town’s website in response to the companies legal threats:
These [Host Community Agreements] were willingly entered into when the businesses approached the town in connection with their requests for a license to operate from the Massachusetts Cannabis Control Commission – Theory Wellness in 2016 and 2018, and Rebelle in 2019. A host community agreement was a requirement to obtain a license from the state. The town did not suggest or in any way require that these businesses seek to locate and operate in Great Barrington; they did so by their own determination that the town would be a favorable place to engage in the sale of marijuana products. By most, if not all, accounts, their operations have been financially rewarding.
Under the HCA’s, each establishment agreed to the amount of the community impact fees, and a payment schedule for those fees. They are now asserting that the fees were illegal, and that the town should make a full refund. This demand is not based on a court ruling or a determination by the Cannabis Control Commission, or any other state agency, that the impact fees paid to the town were illegal. Rather, it is an ultimatum resting on the preferred view of businesses in the marijuana industry – a one-sided view.
The town has been diligent in monitoring the effects of marijuana sales in and around Great Barrington. As would be the case with any new industry, some of those effects cannot be fully known for several years while some can be more apparent, such as the need for education and counseling for citizens young and old regarding marijuana use.
That need and others can be addressed with the help of community impact fees paid by marijuana businesses. To wisely manage the fees it receives, the town has created a Community Impact Funding Committee to evaluate applications for grants toward community support and resources.
As it stands, the issue is very simple. Both of these businesses freely agreed to the terms of their HCA’s, including payment of the community impact fees. Now, after skipping payments that were due, they want to declare that their payment agreements were illegal. In plain words, the failure to pay is a violation of the HCA’s and a breach of contract.
Months later, Pruhenski announced his departure as town manager.
Right after Town Manager Pruhenski issued his statement, the two companies, along with Farnsworth Fine Cannabis, made good on their promise and filed their lawsuit against the town on March 14. Farnsworth Fine Cannabis, which is located at 126 Main Street, signed its HCA in August 2019.
In a May 17 legal filing, attorney David Rich of Boston law firm Todd & Weld LLP stated that the three companies demand that the town return “millions of dollars” in Community Impact Fees. In the legal filing, Rich claimed that the town unlawfully required the three companies to pay the fees:
…even though Massachusetts General Laws C.94G mandates that CIFs must be ‘reasonably related to the costs imposed upon the municipality by the operation of the marijuana establishment. [The town] has confirmed, repeatedly and in written communications to plaintiffs, that it has actually incurred no such costs with hosting [the companies] respective marijuana establishments within its town. Nonetheless, year after year, [the town] insisted that [companies] pay unlawful CIFs and other fees.
In a separate filing, Rich made a motion for judgement on behalf of the three companies.
On July 15, Town Counsel David Doneski of Boston law firm KP Law, P.C. filed a motion on behalf of Great Barrington in opposition to the three companies’ motion for judgement.
The court case continued on throughout the year.
Meanwhile, a fourth marijuana dispensary, Calyx Berkshire, filed a separate lawsuit against both the town and Selectboard Chair Steve Bannon in Berkshire Superior Court in late March. That case has been stalled in court since May 9, and it is not known if the state’s Cannabis Control Commission will intervene in the case. The Berkshire Edge will follow up with reporting on that case in a separate article in the near future.
H/T: theberkshireedge.com
