Massachusetts High Courts Weigh In On the Limits of Local Control Over Cannabis Businesses

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  by Stephen Bartlett

   Legal Analysis

I. Introduction

Within the past year, the Supreme Judicial Court (“SJC”) and Appeals Court provided some clarity on the role of municipalities in the Commonwealth’s adult-use cannabis market.  Through three cases – West Street Associates LLC v. Planning Bd. of Mansfield, 488 Mass. 319 (2021), Mederi, Inc. v. City of Salem, 488 Mass. 60 (2021), and Valley Green Grow, Inc. v. Town of Charlton, 99 Mass. App. Ct. 670 (2021) – the courts addressed the limits of municipal authority within the cannabis licensing regime established by the Cannabis Control Commission (“Commission”).  In different ways, these cases clarified some of the uncertainty left by “An Act to Ensure Safe Access to Marijuana (the “Act”, now codified at General Laws c. 94G), providing important guidance to those seeking to resolve how much control municipalities may exert over prospective cannabis licensees.  In turn, the decisions highlight important ambiguities that remain unaddressed.

II. Statutory Background – Chapter 94G

In 2017 the Massachusetts Legislature passed the Act, which established the parameters for the state licensing regime that the newly established Commission was to oversee and manage.  The Act envisioned specific roles for municipalities within the Commission’s licensing framework – most notably: 1) requiring prospective marijuana establishment licensees to first obtain a Host Community Agreement (“HCA”) before submitting a license application to the Commission; and 2) permitting cities and towns to adopt ordinances and by-laws that impose reasonable safeguards on the operation of marijuana establishments.[1]  However, the Act provided scant detail on the process through which prospective licensees and municipalities should negotiate HCAs and failed to clearly delineate the limits of municipal control over the location and operation of marijuana establishments.  Perhaps unsurprisingly, these noticeable gaps in the Act spurred litigation as the nascent adult-use cannabis industry jostled with local authorities over the standards for issuing HCAs and legality of local bylaws purporting to restrict cannabis facilities and their accessory uses.

III. West Street Associates LLC v. Planning Bd. of Mansfield, 488 Mass. 319 (2021) –
Home Rule and Preemption of Existing Town Bylaws

In West Street Associates LLC v. Planning Board of Mansfield (“West Street”), the SJC addressed the limits of local regulation of adult-use marijuana facilities, finding that a local bylaw established in conflict with a provision of the Act was preempted and, therefore, invalid.

Before the Act took effect, many municipalities in the Commonwealth, including the Town of Mansfield, adopted bylaws requiring any entity seeking to obtain a license to operate a medical marijuana establishment to be a non-profit entity.[2]  Such bylaws mirrored a then-existing requirement under state law.  However, the Act represented a sea change by declaring, in salient part, that “[n]otwithstanding any general or special law to the contrary, any person with a provisional or final certification of registration as of July 1, 2017[,] to dispense medical use marijuana … shall be entitled to convert from a non-profit corporation … into a domestic business corporation….”[3]

In West Street, a for-profit entity (CommCann, Inc.) that had converted from a non-profit entity in accordance with the Act, applied for and received a special permit from the Mansfield Planning Board to construct a medical dispensary on West Street.  An abutting landowner, West Street Associates LLC, challenged the issuance of the special permit pursuant to G.L. c. 40A, § 17, arguing that the Planning Board erred in issuing the special permit to a for-profit entity in violation of the then-existing town bylaw.  The trial court upheld the Planning Board’s issuance of the special permit to CommCann, Inc. and West Street Associates LLC appealed.

On direct appeal to the SJC,[4] the Court affirmed the trial court ruling under the Home Rule Amendment to the Massachusetts Constitution.  The Home Rule Amendment expanded local power by granting municipalities the authority to undertake any action “not inconsistent” with the Constitution or laws of the Commonwealth.[5]  While acknowledging the purpose of the Home Rule Amendment was to preserve municipal rights of self-governance, the Court highlighted the inherent limit of local authority, ruling that municipalities may not intrude into the realm of “inconsistency with the constitution or laws enacted by the general court.”  Relying on familiar principles of implied preemption,[6] the Court concluded that the Mansfield bylaw could not require all medical marijuana dispensaries to organize as nonprofit organizations.  The Court explained that “legislative intent to preclude local action… may be inferred where the local regulation would somehow frustrate the purpose of the statute so as to warrant an inference that the Legislature intended to preempt the subject.”[7]  Here, the Mansfield bylaw frustrated the purpose of the Act because the Legislature “evinced its clear intent to allow for-profit entities to distribute medical marijuana.”  Therefore, the bylaw was unlawful.

IV. Mederi, Inc. v. City of Salem, 488 Mass. 60 (2021) – Host Community Agreements

In Mederi, Inc. v. City of Salem, the SJC affirmed the inherent discretion of cities and towns to decline to execute an HCA with a particular entity, confirming that section three of the Act[8] does not create an entitlement to an HCA for prospective marijuana establishment licensees. 

The City of Salem established a competitive HCA application process overseen by an “HCA Committee” and capped the number of adult-use retail facilities that could be operated within the City limits at five.  Salem’s process emulated the competitive processes for state cannabis licenses used in a number of other jurisdictions across the country, including Georgia, New Jersey, Ohio and Virginia.  Mederi, Inc. (“Mederi”) applied for an HCA, but the City denied its request to negotiate, after determining that four other applicants were more qualified.  Mederi then brought both a mandamus claim and a certiorari action pursuant to G.L. c. 249, § 4 to challenge the City’s issuance of HCAs to other entities but not its own.  After failing in the trial court, Mederi appealed, arguing to the SJC[9] that:  1) the City was required execute an HCA with Mederi upon its submission of the required application materials; 2) the City’s evaluation of the applications was arbitrary and capricious; and 3) the application process itself was an unlawful “pay-to-play” scheme.  Mederi’s first argument – the crux of the mandamus claim – was that, because an HCA is a prerequisite to applying to the Commission for a license, a municipality’s role in the licensing structure must be purely ministerial.  Otherwise, cities and towns and not the Commission would impermissibly control which entities won licenses and which ones did not.[10]

The SJC was unpersuaded.  As to the first argument, the SJC concluded that nothing in the Act requires cities or towns to enter into an HCA with a prospective licensee and that cities and towns have broad discretion to enter into HCAs with those applicants they determine to be most suitable, provided that their decisions are neither arbitrary nor capricious.  As to the second argument, the SJC concluded that the City’s exercise of its discretion in selecting other applicants was above board.  Indeed, the City’s HCA Committee expressly and specifically concluded that the applications of Mederi and two other entities were “not as strong as the others.”  For instance, Mederi’s application lacked demonstrations of “sufficient capitalization” and “direct experience in the industry.”

The SJC also rejected Mederi’s final argument that Salem’s HCA process was a “pay-to-play” scheme unduly benefitting deep-pocketed entities willing contribute funds and make donations in excess of the City’s statutorily mandated 3% community impact fee.[11]  Although receptive to the arguments, the SJC ruled that Mederi lacked standing to challenge the legality of excess community impact fees because he neither executed an HCA with Salem nor paid any community impact fees.  The Court also rejected Mederi’s other “pay-to-play” arguments, which decried the additional financial benefits pledged by other applicants, because Mederi presented no credible evidence that the City actually based its decisions on the promise of such additional benefits. 

However, in dicta the Court raised valuable questions about the purpose of HCAs and underscored the ambiguity in the Act that could thwart (and, in fact, some believe has thwarted)[12] the Commission’s effort to promote diversity, equity and inclusion in the fledgling adult-use industry.  The SJC acknowledged that the Commission’s regulations[13] call for economic empowerment priority applicants to receive “priority application review” by the Commission.  However, because municipalities function as de facto gatekeepers and are not required by law to consider whether any entity seeking to enter into an HCA is an economic empowerment priority applicant, such applicants may never receive Commission review.  In turn, the SJC maligned the growing practice among municipalities of requiring prospective licensees to make payments in addition to the 3% community impact fee described in the Act.  According to the SJC, this too had the potential to create an unfair advantage for better-capitalized applicants. 

V. Valley Green Grow, Inc. v. Town of Charlton, 99 Mass. App. Ct. 670 (2021) – Agricultural and Accessory Uses

Finally, in Valley Green Grow, Inc. v. Town of Charlton, the Appeals Court considered what categories of activity could be considered “ancillary” to cannabis cultivation and, therefore, part and parcel of an agricultural use for the purposes of local zoning.  In a two-to-one decision, the Appeals Court decided that cannabis manufacturing activities and a co-located energy generation facility were such “ancillary” uses that were permitted as of right within certain zoning districts of the Town of Charlton. 

Valley Green Grow, Inc. sought to overturn a decision of the Charlton Planning Board, which concluded that the company’s proposed marijuana establishment constituted “light manufacturing” and was therefore not allowed in agricultural and commercial business districts.  Notably, when the company submitted its application for site plan approval to the Planning Board, Charlton’s zoning bylaw stated that “indoor commercial horticultural/floricultural establishments (e.g. greenhouses)” “are allowed by right in every zoning district in the [t]own.”[14]  On summary judgment, the Land Court disagreed with the Charlton Planning Board and concluded that the proposed use of the site was properly classified as an indoor commercial horticulture/floriculture establishment and therefore an allowable use as of right.  A neighboring property owner and intervener in the Land Court case appealed the decision.

Valley Green Grow, Inc.’s proposed plans for the site consisted of a one million square foot indoor marijuana growing and processing facility, including 860,000 square feet of closed greenhouses, a 130,000 square foot postharvest processing facility, and a 10,000 square foot cogeneration facility.  The Planning Board and intervening neighbor argued that the cogeneration facility and processing operation were the principal uses proposed by the site plan and bore no resemblance to agricultural use.  A majority of the Appeals Court panel disagreed, concluding that a “reasonable relationship” existed between the cannabis cultivation and manufacturing/cogeneration activities.  Analogizing the proposed cannabis operation to the harvesting of fruits and vegetables that require separation from trees or stalks, the Appeals Court concluded that “the proposed cogeneration facility, incidental processing, and incidental manufacturing, when viewed as components of the entire indoor commercial horticultural use, are allowed as of right in the agricultural district.”

In dissent, Justice Peter Rubin voiced concern about the slippery slope on which the majority’s ruling perilously rested, surmising “that, despite the [zoning] bylaw, a project like this, with its eighteen-megawatt electric power plant, must be permitted anywhere in Charlton, in any zoning district, including a residential one.”  In contrast to his colleagues, Justice Rubin promoted deference to the Planning Board’s reasonable interpretation of the town’s bylaw that an eighteen-megawatt electric power plant and industrial facility for manufacturing marijuana consumables removed this project from the realm of a traditional agricultural use allowed as of right in the town. 

VI. Conclusion

Although these three cases provide some additional clarity to local authorities and the industry, much ambiguity and confusion remain regarding the roles that municipalities can or should play within the Commonwealth’s adult-use cannabis licensing regime.  This reality did not go unnoticed by Justice Kimberly Budd, author of the opinion in Mederi, Inc. v. City of Salem, who recounted that the Commission has made several overtures to the Legislature for additional clarity – especially with respect to the provisions in c. 94G governing HCAs – but that each time the Commission has been rebuffed.  Perhaps prophetic, Justice Budd’s call for legislative action preceded increased public awareness and scrutiny of the shortcomings of c. 94G and the HCA construct, which seem to invite criminal enterprise and nefarious actors.[15]  As the drumbeat for legislative action grows, one would expect the Legislature to review with fresh eyes c. 94G and offer more certainty to an industry that shows no signs of slowing down.

[1] See G.L. c. 94G, § 3; 935 CMR 500 and 501 et seq.

[2] See W. St. Assocs. LLC v. Planning Bd. of Mansfield, 488 Mass. 319, 324, 173 N.E.3d 329, 333 (2021).

[3] 2017 Mass. Acts c. 55, § 72.

[4] The SJC exercised its right of direct appellate review.

[5] See Art. 89, § 6, of the Amendments to the Massachusetts Constitution.

[6] State law can preempt local bylaws either expressly (“express preemption”) or by implication (“implied preemption”).  See Bos. Gas Co. v. City of Somerville, 420 Mass. 702, 704, 652 N.E.2d 132, 133 (1995) (“To determine whether a local ordinance is inconsistent with a statute, this court has looked to see whether there was either an express legislative intent to forbid local activity on the same subject or whether the local regulation would somehow frustrate the purpose of the statute so as to warrant an inference that the Legislature intended to preempt the subject.”)

[7] W. St. Assocs. LLC v. Planning Bd. of Mansfield, 488 Mass. 319, 323-24, 173 N.E.3d 329, 332-33 (2021) (internal quotation marks omitted).

[8] G.L. c. 94G, § 3 (A “marijuana establishment or a medical marijuana treatment center seeking to operate or continue to operate in a municipality which permits such operation shall execute an agreement with the host community setting forth the conditions to have a marijuana establishment or medical marijuana treatment center located within the host community”).

[9] The SJC exercised its right of direct appellate review.

[10] Mederi, Inc. v. City of Salem, 488 Mass. 60, 65-67, 171 N.E.3d 158, 162-64 (2021).

[11] G.L. c. 94G, §3(d) (Community impact fee “shall not amount to more than 3 per cent of the gross sales of the marijuana establishment or medical marijuana treatment center….”)

[12] https://www.bostonglobe.com/2021/11/15/opinion/massachusetts-is-failing-grow-marijuana-industry-equitably/?p1=BGSearch_Advanced_Results.

[13] 935 CMR 500 and 501 et seq.

[14] Valley Green Grow, Inc. v. Town of Charlton, 99 Mass. App. Ct. 670, 677, 173 N.E.3d 395, 402 (2021).

[15] https://www.bostonglobe.com/2021/05/14/metro/our-city-was-sale-fall-river-officials-react-after-former-mayor-jasiel-correia-found-guilty-extortion-fraud/?p1=BGSearch_Overlay_Results; https://www.bostonglobe.com/2021/09/28/metro/judge-orders-former-fall-river-mayor-jasiel-f-correia-ii-pay-back-more-than-310000-restitution-investors-smartphone-app/?p1=BGSearch_Advanced_Results.

Stephen Bartlett is a regulatory attorney at Foley Hoag focusing on cannabis, environmental, energy and infrastructure matters.


Barbuto v. Advantage Sales & Marketing, LLC: Employers May Risk Disability Discrimination Claims by Prohibiting Use of Medical Marijuana by Qualified Disabled Employees

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by David B. Wilson and Jason McGraw

Case Focus

Since 2013, Massachusetts has allowed qualifying patients with certain medical conditions to lawfully obtain and use marijuana for medical purposes under the Medical Marijuana Act. St. 2012, c. 369, §1 et seq. Even so, the possession of marijuana remains a federal crime. 21 U.S.C. §§ 812(b)(1), (c), and 844(a). Thus, many Massachusetts employers maintain strict drug-free workplace and testing policies that prohibit the use of all “illegal drugs” and make no exception for the use of lawfully prescribed medical marijuana. In the landmark decision Barbuto v. Advantage Sales & Marketing, LLC, 477 Mass. 456 (2017), the Supreme Judicial Court (“SJC”) held that an employer with such a policy may be subject to a disability discrimination claim under Massachusetts law if the employer takes an adverse employment action or otherwise discriminates against a “qualified handicapped employee” based on the employee’s off-site, off-duty use of lawfully-prescribed medical marijuana. Id.

Background

In 2014, Cristina Barbuto was hired for an entry-level position with Advantage Sales and Marketing, LLC (“Advantage”), contingent upon her passing a mandatory drug test. Barbuto disclosed to her soon-to-be supervisor that she would test positive for marijuana because she used lawfully-prescribed medical marijuana to treat her Crohn’s disease. Id. at 458. She also told the supervisor that she did not use medical marijuana daily and would not use medical marijuana before or at work. Although the supervisor initially told Barbuto that her use of medical marijuana “should not be a problem” and called later to “confirm[] that her lawful medical use of marijuana would not be an issue with the company,” Advantage terminated Barbuto’s employment after her drug test results came back positive for marijuana. Id.

Barbuto filed suit alleging the mandatory drug test was an invasion of her privacy and that her termination was unlawful. The SJC addressed the termination claim.

Key Holdings In Barbuto

Massachusetts Disability Discrimination Law Applies to Qualified Handicapped Employees Who Use Medical Marijuana as Treatment

Under the Commonwealth’s anti-discrimination law, a “qualified handicapped employee” has: (1) a right to reasonable accommodation for a handicap to enable the employee to perform the essential functions of their job, and (2) a right to be free from discrimination because of their handicap. Id. at 460 & n.4. In Barbuto, the SJC held for the first time that these protections extend to qualified handicapped employees who lawfully use medical marijuana to treat their handicaps. Id. at 464.  Therefore, where an employer’s drug policy prohibits the use of marijuana and a qualified handicapped employee requests an accommodation to use medical marijuana, the employer has an obligation to: (1) participate in an interactive process, and (2) provide a reasonable accommodation, unless such an accommodation would impose an undue hardship on the employer’s business.

Advantage, which had not engaged in an interactive process, argued that Barbuto was not a qualified handicapped employee because the only accommodation she sought (the continued use of medical marijuana) was a federal crime, and was therefore unreasonable. Id. at 462. The SJC disagreed, and held that under the Medical Marijuana Act “the use and possession of medically prescribed marijuana by a qualifying patient is as lawful as the use and possession of any other prescribed medication.” Id. at 464.

Advantage also argued that even assuming Barbuto was a qualified handicapped employee, it had not engaged in handicap discrimination where Barbuto had been terminated not because of her handicap, but rather because she had failed a drug test that all employees were required to pass. Id. at 462. The SJC disagreed, holding that termination for violating such a policy “effectively denies a handicapped employee the opportunity of a reasonable accommodation, and therefore is appropriately recognized as handicap discrimination.” Id. at 467.

Failure to Engage in the Interactive Process Is Sufficient to Support a Claim of Disability Discrimination

The SJC permitted Barbuto’s claims for disability discrimination under Massachusetts law to survive the defendant’s motion to dismiss because the employer had wholly failed to participate in the interactive process. The Court emphasized that the “failure to explore a reasonable accommodation alone is sufficient to support a claim of handicap discrimination” where an employee can prove that a reasonable accommodation existed that would have enabled that employee to perform a job’s essential functions. Id. at 466.

An Employer’s Undue Hardship Defense Can Be Proven in a Number of Ways

Although the Court did not need to reach the defense of undue hardship in this case, the Court provided guidance for employers as to when an accommodation would not be required because it would cause the employer undue hardship. An undue hardship may be proven where the use of medical marijuana would: impair the employee’s work performance; pose an unacceptably significant safety risk to the public, the employee, or fellow employees; or violate an employer’s contractual or statutory obligations, thereby jeopardizing its ability to perform its business. Id. at 467-68. The Court also noted that the Medical Marijuana Act does not require employers to permit on-site medical use of marijuana as an accommodation to an employee. Id. at 464–65.

No Cause of Action under the Medical Marijuana Act or for Wrongful Termination in Violation of Public Policy

The SJC rejected Barbuto’s other claims – that her termination amounted to a violation of the Medical Marijuana Act and wrongful termination in violation of public policy. The Court held that aggrieved employees do not have a private right of action under the Medical Marijuana Act, “where such employees are already provided a remedy under our discrimination law, and where doing so would create potential confusion.” Id. at 470. Similarly, the Court declined to recognize a cause of action for wrongful termination in violation of public policy, “[b]ecause a competent employee has a cause of action for handicap discrimination where she is unfairly terminated for her use of medical marijuana to treat a debilitating medical condition.” Id. at 471.

More to Come on Marijuana and the Workplace

While Barbuto provided employees and employers with much guidance, many questions remain.

For example, nothing in Barbuto requires employers to tolerate the recreational use of marijuana by an employee. But what about accommodating a qualified handicapped employee without a medical marijuana card who lawfully uses marijuana purchased at a recreational dispensary to self-treat their handicap? That question remains unanswered in Massachusetts.

May employers require post-offer, pre-employment drug testing for all employees, regardless of their job duties or the potential safety risks to the employer, the employee, or the public? Although the issue has not yet been addressed by the SJC (the issue was stayed in the Superior Court while the unlawful termination claims were appealed), Barbuto’s claim under the Massachusetts Privacy Act survived the defendant’s motion to dismiss. Barbuto alleged that Advantage’s “drug test was unreasonable and not commensurate with her [entry-level, non-safety sensitive] job duties or with the type of business and industry in which [it] is engaged.” Barbuto v. Advantage Sales & Marketing, LLC, 2016 WL 8653056, at *2 (Mass. Super. May 31, 2016). In denying the motion to dismiss, the Superior Court noted that “[t]he only time the Supreme Judicial Court has held that a drug testing procedure violated [the Massachusetts Privacy Act] was in a case where the employee being tested was not engaged in a dangerous or safety-sensitive occupation.” Id. (emphasis added and citation omitted).

Whether the Medical Marijuana Act is preempted by federal law is another interesting question that has yet to be addressed, although other state courts have dealt with the issue of preemption of their state medical marijuana laws. See, e.g., Noffsinger v. SSC Niantic Operating Co. LLC, — F.Supp.3d –, 2017 WL 3401260 (D. Conn. Aug. 8, 2017) (holding that the Connecticut medical marijuana statute is not preempted by the federal Controlled Substances Act, the Americans with Disabilities Act, or the federal Food, Drug, and Cosmetic Act).

David B. Wilson is a Partner at Hirsch Roberts Weinstein LLP where he practices labor and employment law. Dave is also an active member of the Boston Bar Association.

Jason M. McGraw is an Associate at Hirsch Roberts Weinstein LLP where he practices labor, employment, and higher education law. Jason is also an active member of the Boston Bar Association.


Zoning for Medical Marijuana: Approaches & Considerations

mchugh_jamesstempeck_justinby Lisa L. Mead and Adam J. Costa

Heads Up 

On November 6, 2012, Massachusetts voters overwhelmingly approved a ballot initiative legalizing the use of marijuana by qualifying patients who have been diagnosed with a debilitating medical condition.  Effective January 1, 2013, the “Act for the Humanitarian Medical Use of Marijuana” presents a number of issues for cities and towns concerning the exercise of their zoning powers.  The Act established a process whereby medical marijuana treatment centers, defined as not-for-profit entities that acquire, cultivate, possess, process, transfer, transport, sell, distribute, dispense, or administer marijuana or products containing marijuana for medical use, may apply to the Department of Public Health (DPH) for registration.  The Act provides for the registration of up to 35 medical marijuana treatment centers initially, with at least one but not more than five centers per county.

Although no reference is made in the Act to municipal zoning control or its applicability to medical marijuana treatment facilities, the DPH regulations promulgated thereunder in mid-2013, see 105 CMR 725.000, address zoning for these facilities, referred to as registered marijuana dispensaries (RMDs):  “The Department does not mandate any involvement by municipalities or local boards of health in the regulation of RMDs, qualifying patients with hardship cultivation requirements or any other aspects of marijuana for medical use.  However, nothing in 105 CMR 725.000 shall be construed so as to prohibit lawful local oversight and regulation. . . that does not conflict or interfere with the operation of 105 CMR 725.000.”  105 CMR 725.600.  Accordingly, per the Home Rule Amendment, Mass. Const., amend. LXXXIX, Massachusetts cities and towns may in their discretion adopt zoning ordinances and bylaws relative to the siting, development, and operation of medical marijuana treatment centers, as long as their provisions are not at odds with the Act or the DPH regulations.

To Zone or Not to Zone

A municipality is under no obligation to zone for RMDs, and many cities and towns either have yet to adopt such zoning or have elected not to do so.  The DPH regulations mandate a buffer zone around certain facilities for children.  Absent a more stringent local requirement, “a RMD shall not be sited within a radius of five hundred feet of a school, daycare center, or any facility in which children commonly congregate.  The 500 foot distance. . . is measured in a straight line from the nearest point of the facility in question to the nearest point of the proposed RMD.”  Municipalities may establish their own buffer zones from these or other facilities, provided they are mindful that, collectively, these zones may not effectively prohibit RMDs city- or town-wide.

The Office of the Attorney General has opined that an outright ban on medical marijuana treatment centers in a municipality frustrates the purposes of the Act and, consequently, is invalid.  “The Act’s legislative purpose could not be served if a municipality could prohibit treatment centers within its borders, for if one municipality could do so, presumably all could do so.”  Letter from the Att’y Gen. to the Town of Wakefield, Mar. 13, 2013, available at http://www.mlu.ago.state.ma.us/.

The Attorney General’s Office has also rejected bylaws prohibiting home cultivation as an accessory use, restricting home cultivation to a particular area of the community, imposing buffer zones around home cultivation sites, and requiring a special permit for home cultivation.  Home cultivation of medical marijuana is authorized by the Act and the DPH regulations for qualifying patients whose access to a RMD is limited by verified financial hardship, a physical incapacity to access reasonable transportation, or the lack of a medical marijuana treatment center within a reasonable distance from the patient’s residence.

For municipalities that choose to zone for medical marijuana by adopting reasonable regulations, the choice is between incorporating RMDs into the zoning already in effect and establishing an overlay district within which RMDs may be sited.

Incorporation into Existing Zoning

Using a more traditional approach to zoning, a municipality may amend its existing zoning ordinance or bylaw to identify and define RMDs and to specify the zoning district or districts where they are permitted.  In doing so, it subjects a RMD to the same dimensional and density requirements and performance standards applicable to other uses in the same district.  Dimensional and density requirements might include area, frontage, and setback constraints, among others. Performance standards might regulate noise, traffic, or other aspects of a use for compatibility with its surroundings.  If a city or town so chooses, it may zone cultivation and processing operations separately from retail facilities.  Although both qualify as RMDs per the DPH regulations, these uses need not be co-located.

A city or town may elect to allow RMDs only by special permit, in some or all of the zoning districts in which they are an available use.  The Attorney General has cautioned municipalities, however, that an ordinance or bylaw must provide adequate standards to guide a board in deciding whether to grant or deny the special permit.  It may not be enough for a municipality to rely on the general requirement of the Zoning Act, at G.L. c. 40A, § 9, that the use be “in harmony with the general purpose and intent of the ordinance or by-law,” nor are a municipality’s special permit criteria for other uses always appropriate for application to RMDs.  Municipalities have been advised “to list specific criteria for. . . consider[ation] when reviewing [an] application.”  Letter from the Att’y Gen. to the Town of Westborough, July 11, 2013, available at http://www.mlu.ago.state.ma.us/.

In its regulation of medical marijuana treatment centers, a municipality must also be cautious not to run afoul of the zoning exemption available to agricultural uses, under G.L. c. 40A, § 3.  To the extent that an RMD’s operations qualify as commercial agriculture thereunder, a municipality cannot require a special permit for, or unreasonably regulate or prohibit, the use.

Creation of an Overlay District

An alternative to incorporating RMDs into an existing zoning ordinance or bylaw is to create an overlay district for medical marijuana treatment centers.  An overlay zone is a district superimposed on one or more established zoning districts which may apply supplemental restrictions on uses in these districts or permit uses otherwise disallowed.  By adopting an overlay district, a municipality gains greater control over where RMDs may be sited.  The limits of acceptable locations need not coincide with the boundaries of the municipality’s existing zoning districts, but may be determined by the city or town in its discretion upon consideration of existing and anticipated land uses and the compatibility of RMDs with these uses.  A municipality may incorporate dimensional requirements and performance standards specific to the overlay district, and may even pair these regulations with buffer zones surrounding schools, daycare centers, or other uses potentially impacted by a RMD.  A special permit may be required for the development and operation of a RMD within the overlay district; or the municipality may choose to permit these facilities as-of-right or subject only to site plan review.

Host Community Agreements

Several Massachusetts municipalities have opted to negotiate host community agreements with potential RMDs to eliminate or mitigate any possible adverse effects of RMDs.  Neither the Act nor the DPH regulations prohibit these agreements.  And while a municipality may not require a RMD to enter into a host community agreement, such an agreement may expedite a RMD’s receipt of a letter of support or non-opposition from the municipality, now a requirement of the DPH licensing process as updated in mid-2015.  A municipality might otherwise choose to issue its letter of support or non-opposition only upon a RMD’s completion of the permitting process, once the city or town is satisfied that the project has been adequately vetted.

Among the most common subjects of host community agreements are financial compensation due the municipality, taxes, and charitable contributions.  Financial assistance to a city or town may help offset community impacts, fund public health and safety initiatives, or otherwise aid the municipality.  The payment of real estate taxes or the making of payments in-lieu-of taxes is also worthy of negotiation; otherwise, because RMDs are required by the Act to be not-for-profit entities, they may qualify as tax-exempt.  Entering into a tax agreement helps to alleviate any questions about the payment of taxes to the municipality.  Finally, a number of Massachusetts municipalities have negotiated charitable contributions by RMDs in exchange for the community’s support of, or non-opposition to, the development of a medical marijuana treatment center.

In summary, Massachusetts cities and towns have a choice about whether to zone for medical marijuana treatment centers and, if they do, of how to approach the rezoning process.  Some municipalities have utilized traditional zoning practices, allowing RMDs in one or more existing zoning districts and often requiring a special permit.  Other municipalities have developed overlay districts, within which RMDs may be sited subject to dimensional requirements, performance standards, and other regulations specific to the use.  Regardless of which approach is chosen, a municipality would be wise to explore negotiation of a host community agreement with a potential RMD and avail itself of the financial incentives that may be offered in exchange for the municipality’s cooperation with the application process.

Lisa L. Mead and Adam J. Costa are partners at Blatman, Bobrowski, Mead & Talerman, LLC. They concentrate their practice in the areas of general municipal, land use and environmental law, representing both municipal and private clients throughout Massachusetts.