-: SJC-13010
Mederi Inc, The city of Salem.
-: Okay, Mr. Sheehan, good morning.
-: Good morning, may it please the court,
William Sheehan from Mederi, Inc.
And first I'd like to thank the court for the opportunity
to appear personally here today.
Woman: Welcome.
-: It was 40 years ago that I first appeared
before this court and it's always an honor and a privilege.
Mederi seeks a license under chapter 94 G,
for the retail sale of recreational marijuana to adults.
It obtained a special permit as required by Salem Zoning,
and then applied for and was willing to execute,
a host community agreement, sometimes referred to as an HCA.
The City of Salem refused that HCA preventing Mederi
from getting to the next step in this two-step process.
What we have is a two-step process created
under sections three and four of chapter 94 G.
In order to advance to the CCC, Cannabis Control Commission,
one must have an executed host community agreement.
Mederi challenged that...
-: Counsel I hate to interrupt you, but I'd like to just kind
of drill down right to the issue here.
We know 94 G reserves to the local community control,
over who gets to operate these retail establishments.
And that's partially embodied by having the requirement
of the host community agreements.
If we read it the way you read it,
isn't it just a matter of who gets there first.
Then the local community is obligated
to enter into a host community agreement,
just by virtue of the fact that you already
got the permit for under the statute.
And now you get to go back and say, I beat the other guy,
so you have to engage with me.
-: With all due respect, it's not that simple,
and it's not that the city has no control over the who.
The city has a great deal of control,
I'm going to talk about the city control
under section three, but section four A Roman numeral 10,
talks about who is to determine to whom licenses
will be awarded,
and it's not the city.
It's not the municipality.
It is the CCC.
-: It is, but you still have to be armed
with a host community agreement.
And if the city has determined
that you haven't met their requirements,
and they don't want to engage with you, and somebody else,
what are we supposed to say,
that because you've gotten the initial permitting
from the CCC and now you come back and say,
now we want to do the host community agreement,
but they say no for a variety of reasons.
And they've said that in their denial,
what are we to make of the fact that you're saying
that they have no local control to say
we don't wanna pick you, but we wanna pick them.
-: I'm not suggesting there is no local control.
In fact, there were three layers of local control
and that local control is carefully spelled out,
in section three.
The first layer is in the citizenry of a municipality.
Marijuana is to be lawful in a municipality
unless the citizenry by vote rejects it.
The second level of local control,
is vested in the legislative branch,
because section three D talks specifically
about a city being able to control by ordinance,
not in any other way, but by ordinance, time,
place, manner, and number, which the city did.
In fact, if you, as the City of Salem did,
if you elect to pass an ordinance that's the nature
of a zoning ordinance, you can require a special permit,
so there's actually a third level there, a protection,
that is afforded by the special permit granting authority,
also done here.
Then there is a fourth level of control,
and that's a control in the executive branch.
In this case, it would be the mayor.
The mayor is allowed to dictate the terms of,
set the terms of, a host community agreement.
But setting the terms of that, the conditions,
is different from selecting
who it is who will be awarded the license,
because if you allow the mayor
or any chief executive officer to issue the license,
determine who issues the license,
you've adopted the chapter 138 model, which...
-: I asked you, counsel, it was helpful
as you described the process, that last bit,
where the mayor determines whether or not
to enter into an HCA, is that discretionary?
-: No, whether the terms, the conditions
that had to go into the HCA,
absolutely discretionary with the mayor.
-: So given that the terms are discretionary with the mayor,
how can we per your count one, have a order for a mandamus,
to require the mayor to enter into an HCA.
-: Because the obligation to execute in HCA with someone
who has applied for it and has in this case,
obtained a special permit,
the obligation to sign an HCA is not discretionary.
The obligation to sign is mandatory.
-: But that doesn't make sense,
if the conditions of the HCA, the terms of the HCA
are discretionary with the mayor,
how can we as the judicial branch,
order the mayor to enter into the HCA,
as to which the terms to which are discretionary
that seems not logical to me.
-: Well, I would suggest respectfully
that there is a logic to it.
The logic is that the city through that third
layer of protection.
We've talked about the citizenry.
We've talked about the legislative protection.
We've talked now about the executive.
The executive branch gets to set as it did in this case,
it set 21 conditions,
when you take a look at the application process.
Those conditions were set.
Those conditions can be determined by the mayor.
Now, we have an HCA,
the conditions have been set,
can the mayor
refuse to sign that HCA,
with any particular retailer?
The answer to that question has to be no,...
-: So, are you saying then that anybody
who agrees to the HCA should get the HCA,
let it all go to the Cannabis Control Commission,
and then they'll decide who gets the slots?
-: That's exactly the way this process is designed.
And that is, in this case there was a barrier,
if you will, to receiving an HCA,
that is a special permit had to be obtained,
but Mederi crossed that barrier
and obtained the special permit.
The next thing that has to happen here,
when you're looking at it from the retailer's point of view,
is are you willing to accept the conditions of operation?
Not selection, but the operations,
the conditions of operation,
that the city in its discretion has decided to set.
There may be conditions that a certain retailer would say,
I'm gonna take my potential license and go elsewhere.
I'm not going to live with those conditions.
Those conditions, we're not challenging
the city's ability to set them.
-: Counsel, can I ask you then to address the difference
between this statutory scheme,
and the gaming scheme that's pointed out
by the commission here in the amicus brief.
-: Yes, the...
-: Because it seems like based on their summary
of the gaming rules,
the gaming commission does have the authority to require
the execution of the local community agreements
in that scheme,
whereas here, it seems under 94 G there is no authority
for the commission to require the local community,
to enter into the HCA.
-: With respect to host community agreements under both 94 G
and the gaming statute,
the language is identical, execution.
The only time you get into negotiation,
the only time you'll find that word in the statute,
in the gaming statute,
does not apply to host community agreements.
It applies to so-called memoranda of understanding
with neighboring communities.
We have nothing like that in chapter 94 G,
that analysis is helpful because it does draw a distinction
between execution and negotiation.
(indistinct chatter) I would agree,
that if what we were talking about,
-: I don't get that.
I mean, how can, if they can set terms and conditions,
and say you don't meet those terms and conditions,
I mean, they may be acting improperly,
but don't they get to set terms and conditions
and decide whether you meet them.
If they can't do that, then I don't know what they're doing.
And then you've also got to combine the fact
with justice George's question,
which is, this is decided on sort of a rolling basis.
So it would be just a race to the CCC,
because they don't look at them together.
So it just seems obvious to me that they can set terms
and conditions and evaluate whether you met them.
Now it gets tricky and potentially improper,
if they only send up, you know,
the number they want each time.
That's a separate question,
but I don't see how you can avoid
that they set the terms and conditions.
How do you enter into agree...
How do you force someone to agree to things
that they say you don't meet?
-: The city sets the terms,
under which a retailer will operate.
-: And they said, -: However,
-: you didn't meet them.
They say you don't meet them here.
They say, you're, go ahead.
-: I apologize.
The city hasn't said that we don't meet the condition.
The city has said, we don't measure up in comparison
to other applicants.
-: Well, let's talk about that for a moment, Mr. Sheehan,
and I'll agree with you, if you look at section four, 10,
about the CCC determining which applicants
shall be awarded such a license.
That not a clear answer to our question.
So what we have here, is a limited amount
of host community agreement.
And then we have, the CCC is going to decide,
who gets a license.
So if you have more applicants,
then you have spots for,
who should decide
which applicants are going to be able to be in Salem.
Should it be the entity that understands Highland Avenue,
and can appreciate which two out of six would be better?
Who understands Dodge Street,
and is able to take into account,
what the implications of choosing this applicant
from that applicant should be?
Or should it be a governmental agency in Western?
-: One way, the best way to preface my answer
to your question, is the importance of economic empowerment,
the importance of social equity,
it is replete in chapter 94 G.
So when you look at chapter 55,
well, section 56 of chapter 55,
which amended the initiative petition legislation,
there's a specific reference in there,
to what are we trying to do here?
We're trying to help the disadvantaged.
-: That's a great point,
Mr. Sheehan, I'm gonna just, I don't want you to finish,
it's a great point, but have in mind while you're answering,
the question that the amicus agree with you, but they say,
but the statute says what it says.
We need an amendment to recognize that problem.
It's a very important and good point,
but the CCC recognizes and can only interpret the statute,
in one way.
-: But, why would you interpret the statute?
Our interpretation of the statute
gives voice to
that unquestioned goal.
The city's interpretation, does not.
It is basic in any interpretation of a statute,
that you must interpret it in accordance with,
what's trying to be accomplished,
but now let me answer your question.
Woman: But first you have to look at the plain meaning,
of the words of the statute.
Can you start there?
-: Sure, and I thought that I did but I'll do it again.
Four A, roman numeral 10, it is the CCC who shall determine,
who gets the license,
but to answer Justice Lowy's question,
there is certainly local nuances that are involved here.
But those local nuances are not dealt with,
at the executive level,
they're dealt with at the legislative level
by way of the zoning ordinance,
and in this case, by way of special permit.
The special permit granting authority,
when you take a look at section 9.4 of the zoning ordinance,
it specifically says, that among the considerations
of the ZBA,
will be, effect on neighborhood, effect on community.
So all of those considerations
that you are rightly concerned with, are taken care of.
-: But that's not where they end at,
eight, end up meeting them, seven or eight,
Sheehan: Right.
-: end up meeting them.
Sheehan: Sure. -: And if they do,
the idiosyncrasies of that particular risk quality
that's going to have five host community agreements,
is not going to be made,
by the mayor of that municipality.
-: Once the zoning board has determined
that all of those locations are appropriate,
which it has, it's not for the mayor to say,
no, they aren't.
And to address the question at the CCC level,
the suggestion that all the CCC
is doing is sort of rubber stamping,
whoever comes in first, that's not fair to the CCC.
There is, they are handling matters on a rolling basis,
but they have to be qualified.
-: Can I ask how that works though, then?
'Cause that's where it gets complicated to me.
So if they're doing it on a rolling basis,
they can't compare the proposals, right?
At all!
They're just gonna do an up or down vote on each one, right?
Is that right?
-: That is right,
that was what was, has always been contemplated since 2016.
That is that the distinction
is between those who are qualified,
and those who are not qualified,
-: Okay.
-: not trying to frame by way of AA, minus B, plus,
something like that. -: What if, what if there 30,
that are qualified, and that city is only gonna allow five.
It means that the first five who are qualified
are going to get approved, right?
-: It does, and that's consistent with the whole concept
of trying to get in the marketplace,
legalized marijuana retailers.
There was an encouragement by the CCC,
it makes sense, if their regulation,
-: But then...
So it doesn't matter that the municipality's decided
that some of these serve the city's purposes
much better than others.
I mean, I understand your point.
I agree with your point that the economic empowerment issue
has to be dealt with.
I can't tell what, is it at both levels or only one level.
I assume the CCC could just reject every single one
of these, because Salem didn't take into account
economic empowerment, could they?
-: Well, the CCC is designed to look at
and required to look at the qualifications.
I'm not so sure that it would, it's not designed to look
at what the city's selection process wants.
-: But isn't that the problem,
won't you then have the chance of handing,
of ending up with three of them that have been approved
in the same block,
where the city would have preferred to have them spread out.
-: But the place concept, your honor was determined,
keep in mind that place,
and that's your question about place,
that's determined, not at the executive branch,
under section three D, that's set at the legislative branch,
that is by zoning ordinance,
and the City of Salem, not the mayor,
but the City of Salem acting by and through its ZBA,
determined that there would be no problem,
if there were three that were located close to one another.
We know that that is so, because our application was last.
It's not true, as Judge Kafker said below
that our application for ZBA relief,
was viewed in a vacuum,
not viewed in a vacuum at all.
It was determined at the appropriate level,
under section 3D, as to place,
and we've satisfied that, and if you allow the mayor,
to make the final call and not prevent, not allow Mederi
and others to advance,
where under section four, eight, 10,
the CCC would make its determination.
All you have adopted, maybe not intentionally,
but you've adopted the chapter 138,
local licensing board formula, that model,
substituting the mayor for the licensing board,
and that is the antithesis,
of what the initiative petition said,
and the antithesis of what the legislature said,
when we wrote that.
-: Well, let's talk for a moment about the CCC,
municipal guidance document.
And I don't know about the antithesis,
but there's at least a lack of clarity here.
On the other hand, the municipal guidance document
talks about the ability to have a cap on the HCAs.
And you've got the special attorney general
taking a position different than you in the amicus brief
You've got that CCA guidance,
you've got Judge Kafker's decision,
you've got Judge Feeley's decision,
in a nutshell Mr. Sheehan, why are they all wrong?
Just, can you give me a cogent reason why,
well, they're all wrong?
-: The CCC, when it says, and I agree that it's puzzling,
it's reaction is puzzling,
it's misapprehension of it's power, is puzzling,
especially when it says right in this brief,
there are two abuses,
that we're concerned about, and our interpretation
of the statute doesn't cure either one of them.
That's, I don't how, what else to say,
but that it's puzzling.
As to Judge Kafker,
and as to Judge Feeley,
-: On that point, before you leave that point,
couldn't they be wrong?
They have the right to reject every single proposal
if they're not happy with the economic empowerment, right?
They could just say, I've seen what the process produced,
and it didn't respect the legislative,
you know, requirement of economic empowerment,
and it could say that this four percent
is in violation of the three percent.
Couldn't they just do that,
and reject every single one of them.
-: I would say, no, it can't.
Because... Kafker: Why not?
-: the CCCs regulations talk of looking
to the qualifications.
There is a priority for economic empowerment applicants.
-: So if it didn't prioritize them,
wouldn't it be in violation of the, I mean,
I'm actually as bewildered as you, that the CCC
doesn't think it can enforce
its economic empowerment priority.
And it can tell the meaning of whether this four percent,
is consistent with the three percent language,
that they're in the statute,
to me those seem like what the CCC is best capable of doing.
They're not good at figuring out, as Justice Lowy says,
which is the best thing for Salem
and Highland Avenue and, you know, those other things,
but they seem to be able to do the two things,
that the statute prioritizes, can't they?
-: They,
the terms of the HCA,
not suggesting in the statute, certainly it doesn't suggest,
that the CCC has any role to play in the content of the HCA.
And to try to get back to,
try to answer both of those questions.
-: No, you haven't answered the, I am trying,
to me the statute seems to make sense
in the sense that it's like federalism,
it has a local regulatory review,
and then it has this overview,
to ensure that these fundamental things appear,
and the fundamental statutory goals, economic empowerment,
and don't let the municipalities, you know,
take more than three percent.
It seems like that can,
is consistent with this two-part review,
you know, zoning and a local level review,
followed by this ultimate overview by the CCC.
I don't know why they have to do it on a rolling basis.
Is that in the statute,
that they have to do them first come first serve.
-: Rolling basis is not in the statute,
that's by regulation.
-: So they've crippled themselves.
-: It sounds to me as though the two of us agree
on the two-fold process,
the question really then becomes,
can the city prevent an applicant for 94 G license,
by denying that applicant
an HCA?
And if it can, all we have is a local deciding
to whom, in fact, the licenses will be issued.
To answer your question Justice Lowy
as to why do I think Judge Kafker, Judge Feeley,
where do I think they went wrong,
I guess is the question.
They went wrong in my view,
by failing to appreciate,
what the CCC is going to do,
when it gets that application before it.
It is not going to rubber stamp it.
It is not simply going to say,
oh, you've got an executed HCA, check mark,
good enough, here's your license.
And in fact, it doesn't work that way at all.
The CCC, the application process,
the package that's submitted,
it has to be submitted to the CCC,
hundreds of pages long,
covering all kinds of elements,
that are associated with this industry.
And the applicant must qualify on a whole series of issues.
One of which, interestingly enough,
is it's capital resources,
which is really what the city was concerned about.
So it says, we want the strongest operators.
That's what the mayor said in her denial letter to Mederi.
But again, 180 degrees opposite,
of this whole notion of economic empowerment
and helping the disadvantaged.
So I think that where Judge Kafker
and Judge Feeley went wrong,
was failing to truly appreciate the significance
of what the CCC does.
-: Okay, does anyone have any further questions?
Sheehan: Thank you very much.
-: Thank you so much.
Okay, Ms. Caldwell.
-: Good morning, Chief Justice, Budd.
And may it please the court, my name's Victoria Caldwell,
and I'm here today representing the City of Salem,
and American Religious School.
Today, we are here asking the court,
uphold the decision of both superior court judges,
which found that the city had the authority
to determine which marijuana retailers,
with which wish to enter into HCAs with.
In particular, in the narrow instance of where the city
has legally adopted a cap, on the number of retailers
that may be cited within the city.
-: Counsel, let me follow up on just that one point,
because counsel just sat down
before answering that question.
Because there is a cap,
and because by regulation the CCC ultimately determines
who gets these licenses on a rolling basis,
so there really is going to be some advantage
to getting in early or getting in first.
Assuming that there's just the five,
why not, why can't they just get that back?
-: I'm sorry, -: and have the HCA,
be executed?
And then it goes to the CCC,
and then they determine who's the most qualified
and appropriate applicant to get the license.
-: Your honor, from the beginning, we put out a process,
and said that we would be looking at retailers
that had both, either had site control
or had a special permit.
And then we would enter into the HCA process,
with those folks who applied for HCA.
So we upfront told the applicants,
and yeah, not in the record,
but there was an avalanche of interest,
in locating in Salem.
We were early adopt our zoning regulations,
and pursue the citing of these operations.
But right away, we told everyone that it would be,
that we put out an FAQ on our website
and said, hey, the city is gonna look
at those who come forward and we're gonna make decisions,
via the HCA process,
so that we don't have a first come first serve.
Otherwise we would've just had a land rush
to the zoning board,
and the first people in and the first people out,
were going to be the first
in at the CCC. -: But Mederi,
met those threshold qualifications, didn't they?
-: They met the threshold qualifications.
They applied for the HCA.
They agreed to the terms,
and the process that we put out there.
And with the ruling aspect of the CCCs review,
it really would have been, whoever had both zoning,
well actually you don't even need zoning,
to be honest, you need site control
and zoning appropriateness to get a provisional license
with the CCC.
You don't even actually need an actual zoning decision.
You just need, that can come on the back end actually,
but you need that, -: Sure.
But while Mederi had all of those things in hand,
and kept asking for the HCA,
you were doling out, the city was executing HCAs
with other applicants.
So the number five kept turning into four,
to three into two, all the while they were saying,
we met all of the qualifications,
all your requirements, all your criteria,
and we're asking for an HCA,
and all the while, they're not getting an opportunity.
-: I think that what Mederi was owed by the city
was not an HCA but the opportunity to compete for an HCA,
and they got that.
If going to the social equity issues that were raised
in the earlier argument,
if you take Mederi's position,
and you just give everyone an HCA,
who asked for one and has, you know,
demonstrated site control or site appropriateness,
and put those forward, there would be no opportunity
for social equity, economic empowerment applicants.
-: Nobody's suggesting Ms. Caldwell,
probably asked for one and you make sure
that you have basic minimal qualifications.
And four and 10 of the statute,
says that the CCC shall determine which applicants
shall be awarded licenses.
If everything about HCA applicants is vetted
at the local level,
and then you take the eight, 10, 12 applicants,
and you say, okay, here's the five that are the best,
and you send it to the CCC,
what is the CCC doing other than saying,
okay, I guess it's these five then.
I understand they can, as Justice Kafker said,
send it back.
But why isn't it that agency, that is in charge
of regulating the industry,
the agency that should decide who actually ends up
with the host community agreement.
-: I think that the agency does ultimately decide
because we provide these HCAs.
We give them the one page certification
that they have in HCA,
so that they can proceed to licensure.
-: Will they now get to consider the plaintiff
even though they qualify?
They never have a chance.
The regulatory agency never has the chance to consider
the applicant who qualifies,
and yet they are the ones under the statute who decides
who gets the license.
-: Well, I believe that the law provides for that,
your honor, I think that the local control aspects
of this make it such that the cities and towns
can implement zoning,
and they have the HCA process, both.
And through that HCA process they can make
those qualitative decisions about which retailers
would best work in the landscape
in our eight square mile city,
and impact the neighbors in particular roadways,
particularly Highland Avenue best.
And I think that is a decision that was left to localities
and to the mayor,
and it's consistent with what the scheme was when the DPH...
-: So what is left to the CCC,
that's what I'm trying to, I get what you're doing.
And I understand you say you have the ability to limit,
you know, but what does CCC get to do then?
Just trying to understand that balance,
does what here?
-: The CCC gets to review the application
and we had our HCA process,
but it wasn't a full blown review
that the CCC does by any means.
-: Do they get to review, do they get to review
whether you properly (indistinct)
-: I'm sorry, say that again, your honor.
-: Do they get to review
whether you did economic empowerment correct?
-: Well, going to the statute with respect
to economic empowerment applicants,
it's not in the record but we did have an interest
from an economic empowerment applicant
who was unable to get real estate,
unable to secure real estate.
So our process actually helped in a sense
by gathering them to allow
for an economic empowerment applicant to come into play.
And we could, we could, we could work
with that if we were to get one.
Mederi was not an economic empowerment applicant,
and we didn't end up having one
in that batch of applicant. -: Can they reject
all of them because you don't have an economic empower,
there won't be an economic empowerment,
marijuana retailer in Salem,
can the CCC just project all five them.
-: I think the CCC has their regulations,
require that there are two types of preferences
that they give for licensing
and that's the economic empowerment applicant,
and the preexisting medical dispensary's converting
to retail use.
And they, the regulations speak to that
but not to anything else.
So I assume Justice Kafker that they could say,
hey, you know, we've seen too many of these,
and we would like to, we'd like to hold off
before we approve of any more in Salem
to see if we can get an economic empowerment applicant.
-: Can I, can I ask what is this?
this case only deals with the first level.
Has the CCC issued licenses? is that in a...
-: Yeah, I think it's in my brief,
we have three operating retail marijuana stores right now.
And we have two others that have provisional licenses,
that have not opened.
So right now we are at our cap.
-: So the CCC approved three of these already,
even though you've got this four percent provision
in your agreement.
So that's been approved by the CCC?
-: Correct, and they're operational, three of them.
-: And they did not require you, and they okayed
three of them without addressing
this economic empowerment Issue.
-: Correct, your honor.
-: I just wanna understand that, okay.
-: Can I ask you a follow-up on that licensing fee
or whatever the fee is called?
How is it that Salem can do the four percent?
I was confused by that.
-: Well, -: and the pay-to-play aspects.
-: There are two aspects to the economic terms in the HCA.
One is the impact fee, which is authorized by chapter 94G,
that cannot exceed three percent.
So that is included in there.
And then we also ask for, part of our minimum terms,
we put out there from the beginning
that we wanted a one percent donations
with transit enhancement fund,
and a $25,000 donation to a Salem based non profit
of your choice.
And everybody, the eight including Mederi
that came forward to request an HCA through the process,
agreed to those terms.
-: Well, of course they agreed to them
because they wanted to open up their establishments.
But I guess my question is, how is that consistent
with the statutory cap?
-: The statutory cap is a cap on the impact fees,
and the city and other cities and towns have long entered
into community benefits agreements with...
-: So if I call the fee something else,
the Justice Wendlandt donation fund,
then that's okay?
-: If it's a donation and causes an impact,
I think there is a distinction.
-: Isn't traffic the biggest impact?
How is a traffic enhancement be not covered
by the three percent impact fee?
Because traffic is the major impact.
One of the major impacts of these,
-: But the traffic enhancement fund
was just not about generally about traffic,
it was about providing a shuttle service
within the city limits,
to be able to stop it, these retailers.
-: But isn't that, so instead of, okay,
I don't know, so they just,
that was not litigated anywhere, this issue.
-: No, it wasn't litigated anywhere,
we didn't brief on the specifics
for that issue.
-: It's concerning, isn't it?
Because the CCC is not going to be able to see
certain applicants, maybe the City of Salem says,
well, let's see how much you're willing
to contribute mitigation of traffic on Washington Street.
And so a number of applicants step up with that.
And the CCC that has the overall regulatory responsibility
and authority is never seeing HCA agreements,
from all these other well-qualified applicants,
because they might not have the deep pockets,
when the legislation is trying to protect people,
who might not have deep pockets, who want agreements.
I mean, not only is where is the fairness in that,
where's the compliance
with the statutory goals and limitations.
-: With all due respect, I think that the additional fees,
are fees or additional donations are things that are paid
once the operation is up and running.
There are upfront fees that are a barrier
to entry for any applicants.
And I think as the CCC pointed out in it's brief,
that, you know, they have asked the legislature,
for a fix for this and they have not received it
and that's where it stands,
-: They've asked for a fix
on the economic empowerment, right?
They haven't asked for a fix
on the three percent versus four.
-: Maybe yeah, maybe you're right, maybe yeah.
So there have been legislation proposed,
maybe not by the CCC,
that has sought to provide greater limits,
and on the amount of donations and on impact fees.
-: The rolling,
is the rolling admissions requirement,
that's not in the statute, right?
I don't know why they have to,
why can't they do what Salem does,
which is look at all five of these and say,
okay, I've got no economic empowerment proposal,
out of the five,
I've got four percent requirements here,
but can't they do that?
Or is the, I mean, their regulations,
they maybe like handicapping what they can do,
but I just don't understand where its basis is.
-: I'm not sure either,
I think there was some legislative history,
that spoke to, you know,
a different method of not going with rolling,
but then that was not adopted in the revision
of the referendum.
But it's my understanding that
that's where they are with this,
-: The referendum whose language includes
rolling decision-making or not?
-: I don't believe so,
but I think there was some legislative history
about the fix to the referendum,
that would have prescribed a particular process for the CCC,
and that was ultimately not adopted.
-: But you don't disagree that allowing municipalities
to add on additional fees,
and donations and whatnot can lead to trouble, right?
-: Yeah, Chief Justice, Budd, yes, I agree,
it can lead to trouble,
and I think that is why the city put it in writing.
And we had initially negotiated,
an agreement under these terms,
with the existing medical provider,
and we used that as the template,
for what we put out there for the HCA application process,
for the remainder.
Keep in mind that ATG, our original medical dispensary
that was within the city,
we were already a party to a community benefits agreement,
with ATG, prior to them becoming a retailer.
And we just moved those when we reached
a combined agreement, we included community benefits,
inside the HCA, along with the community impact.
-: So your position counsel is that,
so long as the town is transparent,
about these extra fees,
for whatever purpose and whatever they're called,
they really have an unlimited ability to charge these fees,
and then to award the HCA to those who are able to meet
this economic bump for the city.
-: We indicated and I believe our process bears
this out that we only required the minimum.
So there was not gonna be a bidding war
about who was gonna get an HCA.
We had our minimum terms,
that we'd already agreed to with ATG.
And we were gonna just carry those through.
As far as unlimitedness, I believe, you know,
we come down to the point where a particular retailer
would say, no, thanks, I think I'll go to Danvers,
I think I'll go to...
-: No, it's just a marketplace, correcting itself,
I'm not willing to, you know,
make a donation of $100,000 this year,
and so I'm not gonna apply for Salem,
but there's nothing to that three percent cap
in the statute, so long as whatever you call it,
is something other than the community impact fee.
-: I believe the city is entitled
to negotiate community benefits in the form of donations.
And that's, you know, the city has that power
within the general laws,
side-by-side with the responsibilities and powers
of local control under chapter 94 G.
(indistinct chatter)
-: When the host community agreements are up at the CCC
for a determination concerning a license.
Does the statute or regulations provide an opportunity
for the municipality to be heard,
as it relates to certain details, like how many dispensary
should there really be on Highland Avenue?
-: No, we don't have any role at the CCC
other than certifying that we entered into an HCA,
and then later, right after or it's ready to go,
we certify that they are in compliance
with all local ordinances, bylaws,
meaning that perhaps they are in some communities
where zoning comes after HCA.
Then we, you know, the city or town would sign off
that they met, they're in compliance with zoning,
and any of the local licensing.
Salem had this HCA process, but many cities and towns,
have almost full-blown local licensing schemes,
that the CCC has also countenance.
-: Does the CCC get all of the materials
from your process when a license goes before them?
Do they see the terms and conditions you establish to play?
And do they get your process,
or do they just get sort of selective parts?
-: They don't ask us for any of that.
I mean, our process has been online,
and has been made publicly available,
you know, since the beginning.
So we have a published process,
and that's the other thing to keep in mind here is that,
you know, there are cities and towns
with basically no published process,
and that companies individually approach the mayor
or the board of selectmen,
so like persons and ask for an HCA,
and it's either given or it's not.
And I think that's the area where the most concern,
you know, could lie.
Our process was transparent.
We were clear about what we wanted,
and we held everyone to the same standard.
And I think that, you know, all things,
a different mayor, could've made a different decision.
I think, as I pointed out in the brief,
but in the end it's the mayor's discretion,
as to who to enter into one of these agreements with,
it's entirely discretionary decision,
and she didn't abuse that discretion, in this case,
in choosing four retailers and rejecting four others.
And the other thing to keep in mind too, is that, you know,
should the CCC reject or not issue final licenses,
there is an, you know, the matter isn't over yet,
you know, there there's an opportunity,
to come back in here.
You know, we end up below our cap,
and there's also an opportunity politically for companies
like Mederi and others to come in and seek to lift the cap.
-: Okay, any other questions?
Great.
Thanks so much.
We'll take our morning break at this time.