City has Negotiated Three Host Community Agreements with Marijuana Operators

November 26, 2018
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City Manager Tom Ambrosino said this week that the City has negotiated three Host Community Agreements (HCA) with marijuana operators looking to establish dispensaries in the City.

Ambrosino said all three HCAs are identical and are really a formality for the dispensaries, which include the one at the former King Arthur’s, the one on Eastern Avenue and the one on Webster Avenue at Chelsea Commons. He said the City’s policy is they would negotiate an HCA with any entity that had gotten through the process and wanted to proceed to state approval.

“My guess is that it’s another year or so before any of them are set up,” he said. “It’s my understanding that all of the enterprises with HCAs here are not very close to being approved by the state Cannabis Control Commission (CCC).”

The HCAs are the next step after the community meeting, which all three have completed. To go before the CCC, an entity must have an HCA in place, and Ambrosino said the law is clear towards what can be in those agreements.

In Chelsea’s case, the City has asked for 3 percent of gross revenues from the sales of marijuana products. Those payments will come annually and will be in addition to the 3 percent local sales tax already approved. The first 3 percent mitigation payment would come 14 months after the dispensary opens.

A second monetary piece in the agreements includes two, $30,000 payments over two years to the City’s non-profits that have an anti-drug focus.

An important aside, Ambrosino said, is that the HCA doesn’t mean the City has agreed to support the license of any entity.

“My signing off on these is not a substantive decision on them,” he said. “I’m just giving them the chance to move forward and you have to have these in place to move forward. We’ll make the substantive decisions on these proposals not behind closed doors in a negotiation, but rather at the Zoning Board and Planning Board in a public as part of a process.”

Before any of the three dispensaries could open their doors, they would need state approval from the CCC. Then they would have to come back to Chelsea and get a special permit after visiting the Zoning Board of Appeals (ZBA) and the Planning Board. If that permit is achieved, they would then have to get a license to operate from the Chelsea License Commission.

Only then could an establishment open for business.