WEBVTT
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SJC-13010
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Mederi Inc, The city of Salem.
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Okay, Mr. Sheehan, good morning.
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Good morning, may it please the court,
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William Sheehan from Mederi, Inc.
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And first I'd like to thank the court for the opportunity
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to appear personally here today.
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Welcome.
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It was 40 years ago that I first appeared
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before this court and it's always an honor and a privilege.
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Mederi seeks a license under chapter 94 G,
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for the retail sale of recreational marijuana to adults.
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It obtained a special permit as required by Salem Zoning,
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and then applied for and was willing to execute,
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a host community agreement, sometimes referred to as an HCA.
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The City of Salem refused that HCA preventing Mederi
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from getting to the next step in this two-step process.
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What we have is a two-step process created
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under sections three and four of chapter 94 G.
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In order to advance to the CCC, Cannabis Control Commission,
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one must have an executed host community agreement.
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Mederi challenged that...
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Counsel I hate to interrupt you, but I'd like to just kind
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of drill down right to the issue here.
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We know 94 G reserves to the local community control,
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over who gets to operate these retail establishments.
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And that's partially embodied by having the requirement
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of the host community agreements.
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If we read it the way you read it,
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isn't it just a matter of who gets there first.
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Then the local community is obligated
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to enter into a host community agreement,
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just by virtue of the fact that you already
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got the permit for under the statute.
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And now you get to go back and say, I beat the other guy,
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so you have to engage with me.
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With all due respect, it's not that simple,
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and it's not that the city has no control over the who.
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The city has a great deal of control,
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I'm going to talk about the city control
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under section three, but section four A Roman numeral 10,
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talks about who is to determine to whom licenses
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will be awarded,
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and it's not the city.
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It's not the municipality.
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It is the CCC.
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It is, but you still have to be armed
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with a host community agreement.
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And if the city has determined
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that you haven't met their requirements,
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and they don't want to engage with you, and somebody else,
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what are we supposed to say,
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that because you've gotten the initial permitting
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from the CCC and now you come back and say,
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now we want to do the host community agreement,
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but they say no for a variety of reasons.
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And they've said that in their denial,
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what are we to make of the fact that you're saying
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that they have no local control to say
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we don't wanna pick you, but we wanna pick them.
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I'm not suggesting there is no local control.
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In fact, there were three layers of local control
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and that local control is carefully spelled out,
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in section three.
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The first layer is in the citizenry of a municipality.
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Marijuana is to be lawful in a municipality
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unless the citizenry by vote rejects it.
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The second level of local control,
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is vested in the legislative branch,
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because section three D talks specifically
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about a city being able to control by ordinance,
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not in any other way, but by ordinance, time,
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place, manner, and number, which the city did.
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In fact, if you, as the City of Salem did,
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if you elect to pass an ordinance that's the nature
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of a zoning ordinance, you can require a special permit,
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so there's actually a third level there, a protection,
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that is afforded by the special permit granting authority,
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also done here.
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Then there is a fourth level of control,
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and that's a control in the executive branch.
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In this case, it would be the mayor.
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The mayor is allowed to dictate the terms of,
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set the terms of, a host community agreement.
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But setting the terms of that, the conditions,
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is different from selecting
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who it is who will be awarded the license,
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because if you allow the mayor
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or any chief executive officer to issue the license,
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determine who issues the license,
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you've adopted the chapter 138 model, which...
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I asked you, counsel, it was helpful
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as you described the process, that last bit,
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where the mayor determines whether or not
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to enter into an HCA, is that discretionary?
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No, whether the terms, the conditions
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that had to go into the HCA,
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absolutely discretionary with the mayor.
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So given that the terms are discretionary with the mayor,
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how can we per your count one, have a order for a mandamus,
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to require the mayor to enter into an HCA.
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Because the obligation to execute in HCA with someone
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who has applied for it and has in this case,
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obtained a special permit,
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the obligation to sign an HCA is not discretionary.
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The obligation to sign is mandatory.
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But that doesn't make sense,
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if the conditions of the HCA, the terms of the HCA
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are discretionary with the mayor,
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how can we as the judicial branch,
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order the mayor to enter into the HCA,
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as to which the terms to which are discretionary
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that seems not logical to me.
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Well, I would suggest respectfully
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that there is a logic to it.
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The logic is that the city through that third
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layer of protection.
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We've talked about the citizenry.
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We've talked about the legislative protection.
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We've talked now about the executive.
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The executive branch gets to set as it did in this case,
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it set 21 conditions,
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when you take a look at the application process.
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Those conditions were set.
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Those conditions can be determined by the mayor.
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Now, we have an HCA,
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the conditions have been set,
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can the mayor
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refuse to sign that HCA,
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with any particular retailer?
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The answer to that question has to be no,...
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So, are you saying then that anybody
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who agrees to the HCA should get the HCA,
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let it all go to the Cannabis Control Commission,
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and then they'll decide who gets the slots?
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That's exactly the way this process is designed.
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And that is, in this case there was a barrier,
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if you will, to receiving an HCA,
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that is a special permit had to be obtained,
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but Mederi crossed that barrier
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and obtained the special permit.
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The next thing that has to happen here,
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when you're looking at it from the retailer's point of view,
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is are you willing to accept the conditions of operation?
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Not selection, but the operations,
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the conditions of operation,
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that the city in its discretion has decided to set.
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There may be conditions that a certain retailer would say,
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I'm gonna take my potential license and go elsewhere.
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I'm not going to live with those conditions.
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Those conditions, we're not challenging
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the city's ability to set them.
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Counsel, can I ask you then to address the difference
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between this statutory scheme,
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and the gaming scheme that's pointed out
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by the commission here in the amicus brief.
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Yes, the...
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Because it seems like based on their summary
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of the gaming rules,
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the gaming commission does have the authority to require
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the execution of the local community agreements
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in that scheme,
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whereas here, it seems under 94 G there is no authority
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for the commission to require the local community,
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to enter into the HCA.
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With respect to host community agreements under both 94 G
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and the gaming statute,
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the language is identical, execution.
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The only time you get into negotiation,
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the only time you'll find that word in the statute,
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in the gaming statute,
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does not apply to host community agreements.
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It applies to so-called memoranda of understanding
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with neighboring communities.
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We have nothing like that in chapter 94 G,
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that analysis is helpful because it does draw a distinction
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between execution and negotiation.
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(indistinct chatter)
I would agree,
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that if what we were talking about,
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I don't get that.
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I mean, how can, if they can set terms and conditions,
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and say you don't meet those terms and conditions,
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I mean, they may be acting improperly,
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but don't they get to set terms and conditions
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and decide whether you meet them.
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If they can't do that, then I don't know what they're doing.
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And then you've also got to combine the fact
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with justice George's question,
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which is, this is decided on sort of a rolling basis.
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So it would be just a race to the CCC,
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because they don't look at them together.
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So it just seems obvious to me that they can set terms
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and conditions and evaluate whether you met them.
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Now it gets tricky and potentially improper,
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if they only send up, you know,
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the number they want each time.
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That's a separate question,
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but I don't see how you can avoid
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that they set the terms and conditions.
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How do you enter into agree...
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How do you force someone to agree to things
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that they say you don't meet?
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The city sets the terms,
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under which a retailer will operate.
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And they said,
However,
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you didn't meet them.
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They say you don't meet them here.
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They say, you're, go ahead.
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I apologize.
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The city hasn't said that we don't meet the condition.
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The city has said, we don't measure up in comparison
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to other applicants.
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Well, let's talk about that for a moment, Mr. Sheehan,
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and I'll agree with you, if you look at section four, 10,
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about the CCC determining which applicants
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shall be awarded such a license.
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That not a clear answer to our question.
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So what we have here, is a limited amount
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of host community agreement.
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And then we have, the CCC is going to decide,
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who gets a license.
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So if you have more applicants,
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then you have spots for,
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who should decide
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which applicants are going to be able to be in Salem.
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Should it be the entity that understands Highland Avenue,
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and can appreciate which two out of six would be better?
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Who understands Dodge Street,
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and is able to take into account,
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what the implications of choosing this applicant
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from that applicant should be?
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Or should it be a governmental agency in Western?
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One way, the best way to preface my answer
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to your question, is the importance of economic empowerment,
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the importance of social equity,
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it is replete in chapter 94 G.
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So when you look at chapter 55,
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well, section 56 of chapter 55,
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which amended the initiative petition legislation,
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there's a specific reference in there,
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to what are we trying to do here?
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We're trying to help the disadvantaged.
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That's a great point,
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Mr. Sheehan, I'm gonna just, I don't want you to finish,
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it's a great point, but have in mind while you're answering,
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the question that the amicus agree with you, but they say,
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but the statute says what it says.
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We need an amendment to recognize that problem.
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It's a very important and good point,
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but the CCC recognizes and can only interpret the statute,
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in one way.
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But, why would you interpret the statute?
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Our interpretation of the statute
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gives voice to
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that unquestioned goal.
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The city's interpretation, does not.
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It is basic in any interpretation of a statute,
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that you must interpret it in accordance with,
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what's trying to be accomplished,
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but now let me answer your question.
261
00:13:13.840 --> 00:13:16.723
But first you have to look at the plain meaning,
262
00:13:16.723 --> 00:13:17.556
of the words of the statute.
263
00:13:17.556 --> 00:13:18.389
Can you start there?
264
00:13:18.389 --> 00:13:22.120
Sure, and I thought that I did but I'll do it again.
265
00:13:22.120 --> 00:13:27.120
Four A, roman numeral 10, it is the CCC who shall determine,
266
00:13:27.170 --> 00:13:28.220
who gets the license,
267
00:13:28.220 --> 00:13:31.260
but to answer Justice Lowy's question,
268
00:13:31.260 --> 00:13:34.630
there is certainly local nuances that are involved here.
269
00:13:34.630 --> 00:13:38.150
But those local nuances are not dealt with,
270
00:13:38.150 --> 00:13:40.210
at the executive level,
271
00:13:40.210 --> 00:13:42.510
they're dealt with at the legislative level
272
00:13:42.510 --> 00:13:43.910
by way of the zoning ordinance,
273
00:13:43.910 --> 00:13:46.310
and in this case, by way of special permit.
274
00:13:46.310 --> 00:13:47.870
The special permit granting authority,
275
00:13:47.870 --> 00:13:50.880
when you take a look at section 9.4 of the zoning ordinance,
276
00:13:50.880 --> 00:13:54.320
it specifically says, that among the considerations
277
00:13:54.320 --> 00:13:55.630
of the ZBA,
278
00:13:55.630 --> 00:13:58.560
will be, effect on neighborhood, effect on community.
279
00:13:58.560 --> 00:14:00.110
So all of those considerations
280
00:14:00.110 --> 00:14:03.170
that you are rightly concerned with, are taken care of.
281
00:14:03.170 --> 00:14:05.168
But that's not where they end at,
282
00:14:05.168 --> 00:14:07.840
eight, end up meeting them, seven or eight,
283
00:14:07.840 --> 00:14:08.719
Right.
284
00:14:08.719 --> 00:14:09.552
end up meeting them.
285
00:14:09.552 --> 00:14:11.630
Sure.
And if they do,
286
00:14:11.630 --> 00:14:16.630
the idiosyncrasies of that particular risk quality
287
00:14:17.580 --> 00:14:22.580
that's going to have five host community agreements,
288
00:14:23.530 --> 00:14:25.960
is not going to be made,
289
00:14:25.960 --> 00:14:28.720
by the mayor of that municipality.
290
00:14:28.720 --> 00:14:30.410
Once the zoning board has determined
291
00:14:30.410 --> 00:14:32.770
that all of those locations are appropriate,
292
00:14:32.770 --> 00:14:35.060
which it has, it's not for the mayor to say,
293
00:14:35.060 --> 00:14:36.300
no, they aren't.
294
00:14:36.300 --> 00:14:39.550
And to address the question at the CCC level,
295
00:14:39.550 --> 00:14:41.990
the suggestion that all the CCC
296
00:14:41.990 --> 00:14:43.700
is doing is sort of rubber stamping,
297
00:14:43.700 --> 00:14:47.090
whoever comes in first, that's not fair to the CCC.
298
00:14:47.090 --> 00:14:51.460
There is, they are handling matters on a rolling basis,
299
00:14:51.460 --> 00:14:53.153
but they have to be qualified.
300
00:14:55.060 --> 00:14:57.580 line:15%
Can I ask how that works though, then?
301
00:14:57.580 --> 00:15:00.460 line:15%
'Cause that's where it gets complicated to me.
302
00:15:00.460 --> 00:15:04.490 line:15%
So if they're doing it on a rolling basis,
303
00:15:04.490 --> 00:15:07.750 line:15%
they can't compare the proposals, right?
304
00:15:07.750 --> 00:15:09.050 line:15%
At all!
305
00:15:09.050 --> 00:15:13.950 line:15%
They're just gonna do an up or down vote on each one, right?
306
00:15:13.950 --> 00:15:15.206
Is that right?
307
00:15:15.206 --> 00:15:16.478
That is right,
308
00:15:16.478 --> 00:15:21.478
that was what was, has always been contemplated since 2016.
309
00:15:21.700 --> 00:15:23.130
That is that the distinction
310
00:15:23.130 --> 00:15:26.000
is between those who are qualified,
311
00:15:26.000 --> 00:15:28.183
and those who are not qualified,
312
00:15:28.183 --> 00:15:29.016 line:15%
Okay.
313
00:15:29.016 --> 00:15:31.210 line:15%
not trying to frame by way of AA, minus B, plus,
314
00:15:31.210 --> 00:15:34.070 line:15%
something like that.
What if, what if there 30,
315
00:15:34.070 --> 00:15:37.703 line:15%
that are qualified, and that city is only gonna allow five.
316
00:15:38.550 --> 00:15:41.660 line:15%
It means that the first five who are qualified
317
00:15:41.660 --> 00:15:44.180 line:15%
are going to get approved, right?
318
00:15:44.180 --> 00:15:47.990
It does, and that's consistent with the whole concept
319
00:15:47.990 --> 00:15:50.890
of trying to get in the marketplace,
320
00:15:50.890 --> 00:15:52.760
legalized marijuana retailers.
321
00:15:52.760 --> 00:15:55.460
There was an encouragement by the CCC,
322
00:15:55.460 --> 00:15:56.673
it makes sense, if their regulation,
323
00:15:56.673 --> 00:15:57.990 line:15%
But then...
324
00:15:57.990 --> 00:16:01.040 line:15%
So it doesn't matter that the municipality's decided
325
00:16:01.040 --> 00:16:04.340 line:15%
that some of these serve the city's purposes
326
00:16:04.340 --> 00:16:06.873 line:15%
much better than others.
327
00:16:06.873 --> 00:16:08.990 line:15%
I mean, I understand your point.
328
00:16:08.990 --> 00:16:12.530 line:15%
I agree with your point that the economic empowerment issue
329
00:16:12.530 --> 00:16:14.930 line:15%
has to be dealt with.
330
00:16:14.930 --> 00:16:19.060 line:15%
I can't tell what, is it at both levels or only one level.
331
00:16:19.060 --> 00:16:22.170 line:15%
I assume the CCC could just reject every single one
332
00:16:22.170 --> 00:16:25.500 line:15%
of these, because Salem didn't take into account
333
00:16:25.500 --> 00:16:28.260 line:15%
economic empowerment, could they?
334
00:16:28.260 --> 00:16:30.880
Well, the CCC is designed to look at
335
00:16:30.880 --> 00:16:34.410
and required to look at the qualifications.
336
00:16:34.410 --> 00:16:37.260
I'm not so sure that it would, it's not designed to look
337
00:16:37.260 --> 00:16:40.290
at what the city's selection process wants.
338
00:16:40.290 --> 00:16:41.740
But isn't that the problem,
339
00:16:43.360 --> 00:16:45.590
won't you then have the chance of handing,
340
00:16:45.590 --> 00:16:50.411
of ending up with three of them that have been approved
341
00:16:50.411 --> 00:16:53.040
in the same block,
342
00:16:53.040 --> 00:16:56.763
where the city would have preferred to have them spread out.
343
00:16:58.117 --> 00:17:02.030
But the place concept, your honor was determined,
344
00:17:02.030 --> 00:17:05.167
keep in mind that place,
345
00:17:05.167 --> 00:17:07.630
and that's your question about place,
346
00:17:07.630 --> 00:17:11.910
that's determined, not at the executive branch,
347
00:17:11.910 --> 00:17:15.500
under section three D, that's set at the legislative branch,
348
00:17:15.500 --> 00:17:17.270
that is by zoning ordinance,
349
00:17:17.270 --> 00:17:19.760
and the City of Salem, not the mayor,
350
00:17:19.760 --> 00:17:24.630
but the City of Salem acting by and through its ZBA,
351
00:17:24.630 --> 00:17:27.160
determined that there would be no problem,
352
00:17:27.160 --> 00:17:30.830
if there were three that were located close to one another.
353
00:17:30.830 --> 00:17:35.830
We know that that is so, because our application was last.
354
00:17:36.140 --> 00:17:38.830
It's not true, as Judge Kafker said below
355
00:17:38.830 --> 00:17:43.370
that our application for ZBA relief,
356
00:17:43.370 --> 00:17:45.030
was viewed in a vacuum,
357
00:17:45.030 --> 00:17:46.870
not viewed in a vacuum at all.
358
00:17:46.870 --> 00:17:49.460
It was determined at the appropriate level,
359
00:17:49.460 --> 00:17:52.783
under section 3D, as to place,
360
00:17:53.650 --> 00:17:58.650
and we've satisfied that, and if you allow the mayor,
361
00:17:59.260 --> 00:18:04.220
to make the final call and not prevent, not allow Mederi
362
00:18:04.220 --> 00:18:06.230
and others to advance,
363
00:18:06.230 --> 00:18:08.710
where under section four, eight, 10,
364
00:18:08.710 --> 00:18:11.320
the CCC would make its determination.
365
00:18:11.320 --> 00:18:14.560
All you have adopted, maybe not intentionally,
366
00:18:14.560 --> 00:18:16.970
but you've adopted the chapter 138,
367
00:18:16.970 --> 00:18:20.700
local licensing board formula, that model,
368
00:18:20.700 --> 00:18:23.400
substituting the mayor for the licensing board,
369
00:18:23.400 --> 00:18:25.230
and that is the antithesis,
370
00:18:25.230 --> 00:18:27.397
of what the initiative petition said,
371
00:18:27.397 --> 00:18:29.900
and the antithesis of what the legislature said,
372
00:18:29.900 --> 00:18:31.060
when we wrote that.
373
00:18:31.060 --> 00:18:34.988
Well, let's talk for a moment about the CCC,
374
00:18:34.988 --> 00:18:38.730
municipal guidance document.
375
00:18:38.730 --> 00:18:41.950
And I don't know about the antithesis,
376
00:18:41.950 --> 00:18:45.510
but there's at least a lack of clarity here.
377
00:18:45.510 --> 00:18:49.390
On the other hand, the municipal guidance document
378
00:18:49.390 --> 00:18:54.390
talks about the ability to have a cap on the HCAs.
379
00:18:55.783 --> 00:19:00.783
And you've got the special attorney general
380
00:19:01.240 --> 00:19:05.937
taking a position different than you in the amicus brief
381
00:19:07.400 --> 00:19:09.550
You've got that CCA guidance,
382
00:19:09.550 --> 00:19:11.230
you've got Judge Kafker's decision,
383
00:19:11.230 --> 00:19:13.400
you've got Judge Feeley's decision,
384
00:19:13.400 --> 00:19:16.410
in a nutshell Mr. Sheehan, why are they all wrong?
385
00:19:16.410 --> 00:19:19.290
Just, can you give me a cogent reason why,
386
00:19:19.290 --> 00:19:20.663
well, they're all wrong?
387
00:19:22.400 --> 00:19:26.940
The CCC, when it says, and I agree that it's puzzling,
388
00:19:26.940 --> 00:19:29.070
it's reaction is puzzling,
389
00:19:29.070 --> 00:19:33.233
it's misapprehension of it's power, is puzzling,
390
00:19:34.170 --> 00:19:37.050
especially when it says right in this brief,
391
00:19:37.050 --> 00:19:39.150
there are two abuses,
392
00:19:39.150 --> 00:19:42.210
that we're concerned about, and our interpretation
393
00:19:42.210 --> 00:19:45.170
of the statute doesn't cure either one of them.
394
00:19:45.170 --> 00:19:47.900
That's, I don't how, what else to say,
395
00:19:47.900 --> 00:19:49.280
but that it's puzzling.
396
00:19:49.280 --> 00:19:50.760
As to Judge Kafker,
397
00:19:50.760 --> 00:19:52.050
and as to Judge Feeley,
398
00:19:52.050 --> 00:19:54.220 line:15%
On that point, before you leave that point,
399
00:19:54.220 --> 00:19:56.200 line:15%
couldn't they be wrong?
400
00:19:56.200 --> 00:20:00.940 line:15%
They have the right to reject every single proposal
401
00:20:00.940 --> 00:20:05.077 line:15%
if they're not happy with the economic empowerment, right?
402
00:20:06.740 --> 00:20:10.960 line:15%
They could just say, I've seen what the process produced,
403
00:20:10.960 --> 00:20:13.633 line:15%
and it didn't respect the legislative,
404
00:20:14.570 --> 00:20:17.890 line:15%
you know, requirement of economic empowerment,
405
00:20:17.890 --> 00:20:21.690 line:15%
and it could say that this four percent
406
00:20:21.690 --> 00:20:23.760 line:15%
is in violation of the three percent.
407
00:20:23.760 --> 00:20:25.520 line:15%
Couldn't they just do that,
408
00:20:25.520 --> 00:20:27.563 line:15%
and reject every single one of them.
409
00:20:28.900 --> 00:20:30.480 line:15%
I would say, no, it can't.
410
00:20:30.480 --> 00:20:32.080
Because...
Why not?
411
00:20:32.080 --> 00:20:35.100
the CCCs regulations talk of looking
412
00:20:35.100 --> 00:20:36.990
to the qualifications.
413
00:20:36.990 --> 00:20:41.660
There is a priority for economic empowerment applicants.
414
00:20:41.660 --> 00:20:43.590 line:15%
So if it didn't prioritize them,
415
00:20:43.590 --> 00:20:46.000
wouldn't it be in violation of the, I mean,
416
00:20:46.000 --> 00:20:49.340
I'm actually as bewildered as you, that the CCC
417
00:20:49.340 --> 00:20:51.750
doesn't think it can enforce
418
00:20:51.750 --> 00:20:54.493
its economic empowerment priority.
419
00:20:55.390 --> 00:20:59.960
And it can tell the meaning of whether this four percent,
420
00:20:59.960 --> 00:21:03.290
is consistent with the three percent language,
421
00:21:03.290 --> 00:21:04.540
that they're in the statute,
422
00:21:04.540 --> 00:21:09.540
to me those seem like what the CCC is best capable of doing.
423
00:21:09.710 --> 00:21:13.730
They're not good at figuring out, as Justice Lowy says,
424
00:21:13.730 --> 00:21:15.567
which is the best thing for Salem
425
00:21:15.567 --> 00:21:19.150
and Highland Avenue and, you know, those other things,
426
00:21:19.150 --> 00:21:22.130
but they seem to be able to do the two things,
427
00:21:22.130 --> 00:21:26.731
that the statute prioritizes, can't they?
428
00:21:26.731 --> 00:21:27.673
They,
429
00:21:28.910 --> 00:21:30.437
the terms of the HCA,
430
00:21:31.410 --> 00:21:34.810
not suggesting in the statute, certainly it doesn't suggest,
431
00:21:34.810 --> 00:21:39.777
that the CCC has any role to play in the content of the HCA.
432
00:21:41.710 --> 00:21:43.777
And to try to get back to,
433
00:21:43.777 --> 00:21:47.060
try to answer both of those questions.
434
00:21:47.060 --> 00:21:51.200 line:15%
No, you haven't answered the, I am trying,
435
00:21:51.200 --> 00:21:53.640 line:15%
to me the statute seems to make sense
436
00:21:53.640 --> 00:21:56.090 line:15%
in the sense that it's like federalism,
437
00:21:56.090 --> 00:22:00.720 line:15%
it has a local regulatory review,
438
00:22:00.720 --> 00:22:03.400 line:15%
and then it has this overview,
439
00:22:03.400 --> 00:22:06.230 line:15%
to ensure that these fundamental things appear,
440
00:22:06.230 --> 00:22:11.070 line:15%
and the fundamental statutory goals, economic empowerment,
441
00:22:11.070 --> 00:22:14.330 line:15%
and don't let the municipalities, you know,
442
00:22:14.330 --> 00:22:16.223 line:15%
take more than three percent.
443
00:22:17.078 --> 00:22:18.700 line:15%
It seems like that can,
444
00:22:18.700 --> 00:22:22.340 line:15%
is consistent with this two-part review,
445
00:22:22.340 --> 00:22:26.000 line:15%
you know, zoning and a local level review,
446
00:22:26.000 --> 00:22:30.130 line:15%
followed by this ultimate overview by the CCC.
447
00:22:30.130 --> 00:22:33.290 line:15%
I don't know why they have to do it on a rolling basis.
448
00:22:33.290 --> 00:22:34.660 line:15%
Is that in the statute,
449
00:22:34.660 --> 00:22:39.240 line:15%
that they have to do them first come first serve.
450
00:22:39.240 --> 00:22:40.880
Rolling basis is not in the statute,
451
00:22:40.880 --> 00:22:42.300
that's by regulation.
452
00:22:42.300 --> 00:22:44.723 line:15%
So they've crippled themselves.
453
00:22:45.570 --> 00:22:49.090
It sounds to me as though the two of us agree
454
00:22:49.090 --> 00:22:51.570
on the two-fold process,
455
00:22:51.570 --> 00:22:53.793
the question really then becomes,
456
00:22:54.710 --> 00:22:59.710
can the city prevent an applicant for 94 G license,
457
00:23:02.180 --> 00:23:04.650
by denying that applicant
458
00:23:06.580 --> 00:23:07.460
an HCA?
459
00:23:07.460 --> 00:23:12.460
And if it can, all we have is a local deciding
460
00:23:13.890 --> 00:23:17.490
to whom, in fact, the licenses will be issued.
461
00:23:17.490 --> 00:23:19.260
To answer your question Justice Lowy
462
00:23:19.260 --> 00:23:23.730
as to why do I think Judge Kafker, Judge Feeley,
463
00:23:23.730 --> 00:23:25.220
where do I think they went wrong,
464
00:23:25.220 --> 00:23:26.793
I guess is the question.
465
00:23:28.660 --> 00:23:31.480
They went wrong in my view,
466
00:23:31.480 --> 00:23:33.343
by failing to appreciate,
467
00:23:34.440 --> 00:23:37.610
what the CCC is going to do,
468
00:23:37.610 --> 00:23:40.490
when it gets that application before it.
469
00:23:40.490 --> 00:23:42.950
It is not going to rubber stamp it.
470
00:23:42.950 --> 00:23:44.560
It is not simply going to say,
471
00:23:44.560 --> 00:23:47.470
oh, you've got an executed HCA, check mark,
472
00:23:47.470 --> 00:23:49.100
good enough, here's your license.
473
00:23:49.100 --> 00:23:52.020
And in fact, it doesn't work that way at all.
474
00:23:52.020 --> 00:23:55.790
The CCC, the application process,
475
00:23:55.790 --> 00:23:57.570
the package that's submitted,
476
00:23:57.570 --> 00:24:01.060
it has to be submitted to the CCC,
477
00:24:01.060 --> 00:24:03.010
hundreds of pages long,
478
00:24:03.010 --> 00:24:05.580
covering all kinds of elements,
479
00:24:05.580 --> 00:24:08.270
that are associated with this industry.
480
00:24:08.270 --> 00:24:13.270
And the applicant must qualify on a whole series of issues.
481
00:24:14.180 --> 00:24:16.380
One of which, interestingly enough,
482
00:24:16.380 --> 00:24:18.010
is it's capital resources,
483
00:24:18.010 --> 00:24:20.920
which is really what the city was concerned about.
484
00:24:20.920 --> 00:24:23.920
So it says, we want the strongest operators.
485
00:24:23.920 --> 00:24:28.203
That's what the mayor said in her denial letter to Mederi.
486
00:24:29.090 --> 00:24:33.330
But again, 180 degrees opposite,
487
00:24:33.330 --> 00:24:35.350
of this whole notion of economic empowerment
488
00:24:35.350 --> 00:24:37.200
and helping the disadvantaged.
489
00:24:37.200 --> 00:24:39.550
So I think that where Judge Kafker
490
00:24:39.550 --> 00:24:41.530
and Judge Feeley went wrong,
491
00:24:41.530 --> 00:24:45.420
was failing to truly appreciate the significance
492
00:24:45.420 --> 00:24:47.433
of what the CCC does.
493
00:24:51.180 --> 00:24:54.220
Okay, does anyone have any further questions?
494
00:24:54.220 --> 00:24:55.053
Thank you very much.
495
00:24:55.053 --> 00:24:55.886
Thank you so much.
496
00:24:57.860 --> 00:24:59.387
Okay, Ms. Caldwell.
497
00:24:59.387 --> 00:25:01.390 line:15%
Good morning, Chief Justice, Budd.
498
00:25:01.390 --> 00:25:03.420 line:15%
And may it please the court, my name's Victoria Caldwell,
499
00:25:03.420 --> 00:25:06.120 line:15%
and I'm here today representing the City of Salem,
500
00:25:06.120 --> 00:25:07.960 line:15%
and American Religious School.
501
00:25:07.960 --> 00:25:09.580 line:15%
Today, we are here asking the court,
502
00:25:09.580 --> 00:25:11.810 line:15%
uphold the decision of both superior court judges,
503
00:25:11.810 --> 00:25:13.660 line:15%
which found that the city had the authority
504
00:25:13.660 --> 00:25:15.560 line:15%
to determine which marijuana retailers,
505
00:25:15.560 --> 00:25:18.350 line:15%
with which wish to enter into HCAs with.
506
00:25:18.350 --> 00:25:21.570 line:15%
In particular, in the narrow instance of where the city
507
00:25:21.570 --> 00:25:24.640 line:15%
has legally adopted a cap, on the number of retailers
508
00:25:24.640 --> 00:25:26.590 line:15%
that may be cited within the city.
509
00:25:26.590 --> 00:25:29.705
Counsel, let me follow up on just that one point,
510
00:25:29.705 --> 00:25:30.870
because counsel just sat down
511
00:25:30.870 --> 00:25:33.490
before answering that question.
512
00:25:33.490 --> 00:25:35.890
Because there is a cap,
513
00:25:35.890 --> 00:25:40.890
and because by regulation the CCC ultimately determines
514
00:25:41.010 --> 00:25:44.430
who gets these licenses on a rolling basis,
515
00:25:44.430 --> 00:25:48.070
so there really is going to be some advantage
516
00:25:48.070 --> 00:25:51.024
to getting in early or getting in first.
517
00:25:51.024 --> 00:25:54.160
Assuming that there's just the five,
518
00:25:54.160 --> 00:25:56.593
why not, why can't they just get that back?
519
00:25:57.930 --> 00:25:59.540 line:15%
I'm sorry,
and have the HCA,
520
00:25:59.540 --> 00:26:00.900
be executed?
521
00:26:00.900 --> 00:26:04.400
And then it goes to the CCC,
522
00:26:04.400 --> 00:26:08.410
and then they determine who's the most qualified
523
00:26:08.410 --> 00:26:12.523
and appropriate applicant to get the license.
524
00:26:14.260 --> 00:26:17.570 line:15%
Your honor, from the beginning, we put out a process,
525
00:26:17.570 --> 00:26:21.803 line:15%
and said that we would be looking at retailers
526
00:26:24.520 --> 00:26:26.800 line:15%
that had both, either had site control
527
00:26:26.800 --> 00:26:28.010 line:15%
or had a special permit.
528
00:26:28.010 --> 00:26:30.950 line:15%
And then we would enter into the HCA process,
529
00:26:30.950 --> 00:26:34.130 line:15%
with those folks who applied for HCA.
530
00:26:34.130 --> 00:26:37.600 line:15%
So we upfront told the applicants,
531
00:26:37.600 --> 00:26:39.790 line:15%
and yeah, not in the record,
532
00:26:39.790 --> 00:26:41.350 line:15%
but there was an avalanche of interest,
533
00:26:41.350 --> 00:26:42.440 line:15%
in locating in Salem.
534
00:26:42.440 --> 00:26:45.560 line:15%
We were early adopt our zoning regulations,
535
00:26:45.560 --> 00:26:49.240 line:15%
and pursue the citing of these operations.
536
00:26:49.240 --> 00:26:53.050 line:15%
But right away, we told everyone that it would be,
537
00:26:53.050 --> 00:26:55.750 line:15%
that we put out an FAQ on our website
538
00:26:55.750 --> 00:26:58.730 line:15%
and said, hey, the city is gonna look
539
00:26:58.730 --> 00:27:01.693 line:15%
at those who come forward and we're gonna make decisions,
540
00:27:03.660 --> 00:27:05.210 line:15%
via the HCA process,
541
00:27:05.210 --> 00:27:07.580 line:15%
so that we don't have a first come first serve.
542
00:27:07.580 --> 00:27:09.460 line:15%
Otherwise we would've just had a land rush
543
00:27:09.460 --> 00:27:10.760 line:15%
to the zoning board,
544
00:27:10.760 --> 00:27:13.170 line:15%
and the first people in and the first people out,
545
00:27:13.170 --> 00:27:15.620 line:15%
were going to be the first
546
00:27:15.620 --> 00:27:17.874 line:15%
in at the CCC.
But Mederi,
547
00:27:17.874 --> 00:27:22.630
met those threshold qualifications, didn't they?
548
00:27:22.630 --> 00:27:24.100 line:15%
They met the threshold qualifications.
549
00:27:24.100 --> 00:27:25.550 line:15%
They applied for the HCA.
550
00:27:25.550 --> 00:27:27.550 line:15%
They agreed to the terms,
551
00:27:27.550 --> 00:27:31.423 line:15%
and the process that we put out there.
552
00:27:32.530 --> 00:27:37.530 line:15%
And with the ruling aspect of the CCCs review,
553
00:27:38.110 --> 00:27:41.570 line:15%
it really would have been, whoever had both zoning,
554
00:27:41.570 --> 00:27:42.890 line:15%
well actually you don't even need zoning,
555
00:27:42.890 --> 00:27:45.160 line:15%
to be honest, you need site control
556
00:27:45.160 --> 00:27:48.080 line:15%
and zoning appropriateness to get a provisional license
557
00:27:48.080 --> 00:27:49.360 line:15%
with the CCC.
558
00:27:49.360 --> 00:27:52.000 line:15%
You don't even actually need an actual zoning decision.
559
00:27:52.000 --> 00:27:54.990 line:15%
You just need, that can come on the back end actually,
560
00:27:54.990 --> 00:27:56.170 line:15%
but you need that,
Sure.
561
00:27:56.170 --> 00:28:00.500
But while Mederi had all of those things in hand,
562
00:28:00.500 --> 00:28:03.617
and kept asking for the HCA,
563
00:28:05.080 --> 00:28:10.080
you were doling out, the city was executing HCAs
564
00:28:10.380 --> 00:28:12.130
with other applicants.
565
00:28:12.130 --> 00:28:14.580
So the number five kept turning into four,
566
00:28:14.580 --> 00:28:17.530
to three into two, all the while they were saying,
567
00:28:17.530 --> 00:28:19.360
we met all of the qualifications,
568
00:28:19.360 --> 00:28:22.040
all your requirements, all your criteria,
569
00:28:22.040 --> 00:28:24.100
and we're asking for an HCA,
570
00:28:24.100 --> 00:28:29.100
and all the while, they're not getting an opportunity.
571
00:28:29.360 --> 00:28:31.490 line:15%
I think that what Mederi was owed by the city
572
00:28:31.490 --> 00:28:35.280 line:15%
was not an HCA but the opportunity to compete for an HCA,
573
00:28:35.280 --> 00:28:36.403 line:15%
and they got that.
574
00:28:38.160 --> 00:28:41.712 line:15%
If going to the social equity issues that were raised
575
00:28:41.712 --> 00:28:43.460 line:15%
in the earlier argument,
576
00:28:43.460 --> 00:28:45.370 line:15%
if you take Mederi's position,
577
00:28:45.370 --> 00:28:47.850 line:15%
and you just give everyone an HCA,
578
00:28:47.850 --> 00:28:50.400 line:15%
who asked for one and has, you know,
579
00:28:50.400 --> 00:28:53.440 line:15%
demonstrated site control or site appropriateness,
580
00:28:53.440 --> 00:28:56.770 line:15%
and put those forward, there would be no opportunity
581
00:28:56.770 --> 00:29:00.774 line:15%
for social equity, economic empowerment applicants.
582
00:29:00.774 --> 00:29:03.810
Nobody's suggesting Ms. Caldwell,
583
00:29:03.810 --> 00:29:07.470
probably asked for one and you make sure
584
00:29:07.470 --> 00:29:10.797
that you have basic minimal qualifications.
585
00:29:13.850 --> 00:29:17.710
And four and 10 of the statute,
586
00:29:17.710 --> 00:29:22.710
says that the CCC shall determine which applicants
587
00:29:25.330 --> 00:29:28.270
shall be awarded licenses.
588
00:29:28.270 --> 00:29:32.950
If everything about HCA applicants is vetted
589
00:29:32.950 --> 00:29:34.800
at the local level,
590
00:29:34.800 --> 00:29:39.800
and then you take the eight, 10, 12 applicants,
591
00:29:41.110 --> 00:29:46.030
and you say, okay, here's the five that are the best,
592
00:29:46.030 --> 00:29:48.860
and you send it to the CCC,
593
00:29:48.860 --> 00:29:52.810
what is the CCC doing other than saying,
594
00:29:52.810 --> 00:29:55.170
okay, I guess it's these five then.
595
00:29:55.170 --> 00:29:58.090
I understand they can, as Justice Kafker said,
596
00:29:58.090 --> 00:29:59.630
send it back.
597
00:29:59.630 --> 00:30:04.520
But why isn't it that agency, that is in charge
598
00:30:04.520 --> 00:30:07.110
of regulating the industry,
599
00:30:07.110 --> 00:30:10.970
the agency that should decide who actually ends up
600
00:30:10.970 --> 00:30:13.690
with the host community agreement.
601
00:30:13.690 --> 00:30:16.630 line:15%
I think that the agency does ultimately decide
602
00:30:16.630 --> 00:30:18.750 line:15%
because we provide these HCAs.
603
00:30:18.750 --> 00:30:20.950 line:15%
We give them the one page certification
604
00:30:20.950 --> 00:30:22.290 line:15%
that they have in HCA,
605
00:30:22.290 --> 00:30:25.163 line:15%
so that they can proceed to licensure.
606
00:30:25.163 --> 00:30:26.650
Will they now get to consider the plaintiff
607
00:30:26.650 --> 00:30:28.433
even though they qualify?
608
00:30:30.020 --> 00:30:31.270
They never have a chance.
609
00:30:32.280 --> 00:30:35.890
The regulatory agency never has the chance to consider
610
00:30:35.890 --> 00:30:37.800
the applicant who qualifies,
611
00:30:37.800 --> 00:30:40.380
and yet they are the ones under the statute who decides
612
00:30:40.380 --> 00:30:42.210
who gets the license.
613
00:30:42.210 --> 00:30:44.880 line:15%
Well, I believe that the law provides for that,
614
00:30:44.880 --> 00:30:47.660 line:15%
your honor, I think that the local control aspects
615
00:30:47.660 --> 00:30:50.980 line:15%
of this make it such that the cities and towns
616
00:30:50.980 --> 00:30:52.390 line:15%
can implement zoning,
617
00:30:52.390 --> 00:30:55.550 line:15%
and they have the HCA process, both.
618
00:30:55.550 --> 00:30:57.490 line:15%
And through that HCA process they can make
619
00:30:57.490 --> 00:31:02.490 line:15%
those qualitative decisions about which retailers
620
00:31:02.540 --> 00:31:05.070 line:15%
would best work in the landscape
621
00:31:05.070 --> 00:31:06.763 line:15%
in our eight square mile city,
622
00:31:07.916 --> 00:31:12.900 line:15%
and impact the neighbors in particular roadways,
623
00:31:12.900 --> 00:31:15.760 line:15%
particularly Highland Avenue best.
624
00:31:15.760 --> 00:31:19.120 line:15%
And I think that is a decision that was left to localities
625
00:31:19.120 --> 00:31:20.200 line:15%
and to the mayor,
626
00:31:20.200 --> 00:31:25.200 line:15%
and it's consistent with what the scheme was when the DPH...
627
00:31:27.628 --> 00:31:29.917 line:15%
So what is left to the CCC,
628
00:31:29.917 --> 00:31:33.970 line:15%
that's what I'm trying to, I get what you're doing.
629
00:31:33.970 --> 00:31:38.970 line:15%
And I understand you say you have the ability to limit,
630
00:31:39.010 --> 00:31:44.010 line:15%
you know, but what does CCC get to do then?
631
00:31:45.517 --> 00:31:47.620 line:15%
Just trying to understand that balance,
632
00:31:47.620 --> 00:31:48.767 line:15%
does what here?
633
00:31:48.767 --> 00:31:51.410 line:15%
The CCC gets to review the application
634
00:31:51.410 --> 00:31:53.240 line:15%
and we had our HCA process,
635
00:31:53.240 --> 00:31:55.400 line:15%
but it wasn't a full blown review
636
00:31:55.400 --> 00:31:57.690 line:15%
that the CCC does by any means.
637
00:31:57.690 --> 00:32:00.360 line:15%
Do they get to review, do they get to review
638
00:32:00.360 --> 00:32:04.330 line:15%
whether you properly (indistinct)
639
00:32:04.330 --> 00:32:05.820 line:15%
I'm sorry, say that again, your honor.
640
00:32:05.820 --> 00:32:06.830 line:15%
Do they get to review
641
00:32:06.830 --> 00:32:09.943 line:15%
whether you did economic empowerment correct?
642
00:32:12.010 --> 00:32:13.870 line:15%
Well, going to the statute with respect
643
00:32:13.870 --> 00:32:16.310 line:15%
to economic empowerment applicants,
644
00:32:16.310 --> 00:32:19.220 line:15%
it's not in the record but we did have an interest
645
00:32:19.220 --> 00:32:20.840 line:15%
from an economic empowerment applicant
646
00:32:20.840 --> 00:32:23.548 line:15%
who was unable to get real estate,
647
00:32:23.548 --> 00:32:25.600 line:15%
unable to secure real estate.
648
00:32:25.600 --> 00:32:29.720 line:15%
So our process actually helped in a sense
649
00:32:29.720 --> 00:32:32.010 line:15%
by gathering them to allow
650
00:32:32.010 --> 00:32:35.160 line:15%
for an economic empowerment applicant to come into play.
651
00:32:35.160 --> 00:32:36.610 line:15%
And we could, we could, we could work
652
00:32:36.610 --> 00:32:38.450 line:15%
with that if we were to get one.
653
00:32:38.450 --> 00:32:40.720 line:15%
Mederi was not an economic empowerment applicant,
654
00:32:40.720 --> 00:32:42.620 line:15%
and we didn't end up having one
655
00:32:42.620 --> 00:32:46.400 line:15%
in that batch of applicant.
Can they reject
656
00:32:46.400 --> 00:32:49.100 line:15%
all of them because you don't have an economic empower,
657
00:32:49.100 --> 00:32:51.660 line:15%
there won't be an economic empowerment,
658
00:32:51.660 --> 00:32:54.500 line:15%
marijuana retailer in Salem,
659
00:32:54.500 --> 00:32:57.910 line:15%
can the CCC just project all five them.
660
00:32:57.910 --> 00:33:00.380 line:15%
I think the CCC has their regulations,
661
00:33:00.380 --> 00:33:02.440 line:15%
require that there are two types of preferences
662
00:33:02.440 --> 00:33:04.370 line:15%
that they give for licensing
663
00:33:04.370 --> 00:33:06.470 line:15%
and that's the economic empowerment applicant,
664
00:33:06.470 --> 00:33:10.690 line:15%
and the preexisting medical dispensary's converting
665
00:33:10.690 --> 00:33:13.570 line:15%
to retail use.
666
00:33:13.570 --> 00:33:17.040 line:15%
And they, the regulations speak to that
667
00:33:17.040 --> 00:33:18.110 line:15%
but not to anything else.
668
00:33:18.110 --> 00:33:21.600 line:15%
So I assume Justice Kafker that they could say,
669
00:33:21.600 --> 00:33:25.680 line:15%
hey, you know, we've seen too many of these,
670
00:33:25.680 --> 00:33:28.350 line:15%
and we would like to, we'd like to hold off
671
00:33:28.350 --> 00:33:31.020 line:15%
before we approve of any more in Salem
672
00:33:31.020 --> 00:33:34.596 line:15%
to see if we can get an economic empowerment applicant.
673
00:33:34.596 --> 00:33:36.490 line:15%
Can I, can I ask what is this?
674
00:33:36.490 --> 00:33:39.930 line:15%
this case only deals with the first level.
675
00:33:39.930 --> 00:33:43.636 line:15%
Has the CCC issued licenses? is that in a...
676
00:33:43.636 --> 00:33:47.120 line:15%
Yeah, I think it's in my brief,
677
00:33:47.120 --> 00:33:52.120 line:15%
we have three operating retail marijuana stores right now.
678
00:33:53.230 --> 00:33:55.540 line:15%
And we have two others that have provisional licenses,
679
00:33:55.540 --> 00:33:56.800 line:15%
that have not opened.
680
00:33:56.800 --> 00:33:58.647 line:15%
So right now we are at our cap.
681
00:33:58.647 --> 00:34:03.647 line:15%
So the CCC approved three of these already,
682
00:34:03.810 --> 00:34:07.500 line:15%
even though you've got this four percent provision
683
00:34:07.500 --> 00:34:09.110 line:15%
in your agreement.
684
00:34:09.110 --> 00:34:11.630 line:15%
So that's been approved by the CCC?
685
00:34:11.630 --> 00:34:13.600 line:15%
Correct, and they're operational, three of them.
686
00:34:13.600 --> 00:34:18.600 line:15%
And they did not require you, and they okayed
687
00:34:18.900 --> 00:34:20.650 line:15%
three of them without addressing
688
00:34:20.650 --> 00:34:23.670 line:15%
this economic empowerment Issue.
689
00:34:23.670 --> 00:34:25.370 line:15%
Correct, your honor.
690
00:34:25.370 --> 00:34:28.173 line:15%
I just wanna understand that, okay.
691
00:34:30.000 --> 00:34:32.610
Can I ask you a follow-up on that licensing fee
692
00:34:32.610 --> 00:34:35.440
or whatever the fee is called?
693
00:34:35.440 --> 00:34:39.670
How is it that Salem can do the four percent?
694
00:34:39.670 --> 00:34:41.980
I was confused by that.
695
00:34:41.980 --> 00:34:44.080
Well,
and the pay-to-play aspects.
696
00:34:44.080 --> 00:34:49.080 line:15%
There are two aspects to the economic terms in the HCA.
697
00:34:49.757 --> 00:34:54.010 line:15%
One is the impact fee, which is authorized by chapter 94G,
698
00:34:54.010 --> 00:34:55.770 line:15%
that cannot exceed three percent.
699
00:34:55.770 --> 00:34:57.350 line:15%
So that is included in there.
700
00:34:57.350 --> 00:35:00.650 line:15%
And then we also ask for, part of our minimum terms,
701
00:35:00.650 --> 00:35:02.090 line:15%
we put out there from the beginning
702
00:35:02.090 --> 00:35:04.380 line:15%
that we wanted a one percent donations
703
00:35:04.380 --> 00:35:06.230 line:15%
with transit enhancement fund,
704
00:35:06.230 --> 00:35:10.820 line:15%
and a $25,000 donation to a Salem based non profit
705
00:35:10.820 --> 00:35:12.040 line:15%
of your choice.
706
00:35:12.040 --> 00:35:15.410 line:15%
And everybody, the eight including Mederi
707
00:35:15.410 --> 00:35:19.620 line:15%
that came forward to request an HCA through the process,
708
00:35:19.620 --> 00:35:20.850 line:15%
agreed to those terms.
709
00:35:20.850 --> 00:35:22.800
Well, of course they agreed to them
710
00:35:22.800 --> 00:35:24.890
because they wanted to open up their establishments.
711
00:35:24.890 --> 00:35:28.860
But I guess my question is, how is that consistent
712
00:35:28.860 --> 00:35:30.790
with the statutory cap?
713
00:35:30.790 --> 00:35:33.780 line:15%
The statutory cap is a cap on the impact fees,
714
00:35:33.780 --> 00:35:38.080 line:15%
and the city and other cities and towns have long entered
715
00:35:38.080 --> 00:35:40.750 line:15%
into community benefits agreements with...
716
00:35:40.750 --> 00:35:43.260
So if I call the fee something else,
717
00:35:43.260 --> 00:35:45.470
the Justice Wendlandt donation fund,
718
00:35:45.470 --> 00:35:47.803
then that's okay?
719
00:35:49.240 --> 00:35:52.630 line:15%
If it's a donation and causes an impact,
720
00:35:52.630 --> 00:35:54.728 line:15%
I think there is a distinction.
721
00:35:54.728 --> 00:35:59.010 line:15%
Isn't traffic the biggest impact?
722
00:35:59.010 --> 00:36:03.140 line:15%
How is a traffic enhancement be not covered
723
00:36:03.140 --> 00:36:05.870 line:15%
by the three percent impact fee?
724
00:36:05.870 --> 00:36:08.880 line:15%
Because traffic is the major impact.
725
00:36:08.880 --> 00:36:11.450 line:15%
One of the major impacts of these,
726
00:36:11.450 --> 00:36:13.220 line:15%
But the traffic enhancement fund
727
00:36:13.220 --> 00:36:15.070 line:15%
was just not about generally about traffic,
728
00:36:15.070 --> 00:36:17.670 line:15%
it was about providing a shuttle service
729
00:36:17.670 --> 00:36:19.120 line:15%
within the city limits,
730
00:36:19.120 --> 00:36:23.863 line:15%
to be able to stop it, these retailers.
731
00:36:24.730 --> 00:36:29.730 line:15%
But isn't that, so instead of, okay,
732
00:36:32.030 --> 00:36:33.340 line:15%
I don't know, so they just,
733
00:36:33.340 --> 00:36:36.150 line:15%
that was not litigated anywhere, this issue.
734
00:36:36.150 --> 00:36:37.500 line:15%
No, it wasn't litigated anywhere,
735
00:36:37.500 --> 00:36:39.987 line:15%
we didn't brief on the specifics
736
00:36:39.987 --> 00:36:40.820 line:15%
for that issue.
737
00:36:40.820 --> 00:36:42.210
It's concerning, isn't it?
738
00:36:42.210 --> 00:36:46.280
Because the CCC is not going to be able to see
739
00:36:46.280 --> 00:36:49.930
certain applicants, maybe the City of Salem says,
740
00:36:49.930 --> 00:36:53.251
well, let's see how much you're willing
741
00:36:53.251 --> 00:36:58.251
to contribute mitigation of traffic on Washington Street.
742
00:36:58.440 --> 00:37:02.617
And so a number of applicants step up with that.
743
00:37:02.617 --> 00:37:07.310
And the CCC that has the overall regulatory responsibility
744
00:37:08.480 --> 00:37:12.483
and authority is never seeing HCA agreements,
745
00:37:14.650 --> 00:37:17.230
from all these other well-qualified applicants,
746
00:37:17.230 --> 00:37:20.890
because they might not have the deep pockets,
747
00:37:20.890 --> 00:37:23.340
when the legislation is trying to protect people,
748
00:37:23.340 --> 00:37:26.050
who might not have deep pockets, who want agreements.
749
00:37:26.050 --> 00:37:29.730
I mean, not only is where is the fairness in that,
750
00:37:29.730 --> 00:37:31.290
where's the compliance
751
00:37:31.290 --> 00:37:34.567
with the statutory goals and limitations.
752
00:37:36.140 --> 00:37:39.110 line:15%
With all due respect, I think that the additional fees,
753
00:37:39.110 --> 00:37:44.110 line:15%
are fees or additional donations are things that are paid
754
00:37:44.200 --> 00:37:46.850 line:15%
once the operation is up and running.
755
00:37:46.850 --> 00:37:49.140 line:15%
There are upfront fees that are a barrier
756
00:37:49.140 --> 00:37:50.653 line:15%
to entry for any applicants.
757
00:37:52.304 --> 00:37:56.480 line:15%
And I think as the CCC pointed out in it's brief,
758
00:37:56.480 --> 00:37:58.880 line:15%
that, you know, they have asked the legislature,
759
00:38:00.488 --> 00:38:04.510 line:15%
for a fix for this and they have not received it
760
00:38:04.510 --> 00:38:06.180 line:15%
and that's where it stands,
761
00:38:06.180 --> 00:38:07.480 line:15%
They've asked for a fix
762
00:38:07.480 --> 00:38:09.960 line:15%
on the economic empowerment, right?
763
00:38:09.960 --> 00:38:12.350 line:15%
They haven't asked for a fix
764
00:38:12.350 --> 00:38:14.939 line:15%
on the three percent versus four.
765
00:38:14.939 --> 00:38:17.700 line:15%
Maybe yeah, maybe you're right, maybe yeah.
766
00:38:17.700 --> 00:38:19.870 line:15%
So there have been legislation proposed,
767
00:38:19.870 --> 00:38:21.721 line:15%
maybe not by the CCC,
768
00:38:21.721 --> 00:38:26.721 line:15%
that has sought to provide greater limits,
769
00:38:27.030 --> 00:38:32.030 line:15%
and on the amount of donations and on impact fees.
770
00:38:32.750 --> 00:38:34.590 line:15%
The rolling,
771
00:38:34.590 --> 00:38:37.020 line:15%
is the rolling admissions requirement,
772
00:38:37.020 --> 00:38:39.340 line:15%
that's not in the statute, right?
773
00:38:39.340 --> 00:38:41.060 line:15%
I don't know why they have to,
774
00:38:41.060 --> 00:38:43.430 line:15%
why can't they do what Salem does,
775
00:38:43.430 --> 00:38:46.794 line:15%
which is look at all five of these and say,
776
00:38:46.794 --> 00:38:51.794 line:15%
okay, I've got no economic empowerment proposal,
777
00:38:51.800 --> 00:38:52.953 line:15%
out of the five,
778
00:38:54.390 --> 00:38:57.393 line:15%
I've got four percent requirements here,
779
00:38:59.600 --> 00:39:01.940 line:15%
but can't they do that?
780
00:39:01.940 --> 00:39:04.500 line:15%
Or is the, I mean, their regulations,
781
00:39:04.500 --> 00:39:08.620 line:15%
they maybe like handicapping what they can do,
782
00:39:08.620 --> 00:39:11.603 line:15%
but I just don't understand where its basis is.
783
00:39:13.250 --> 00:39:14.100 line:15%
I'm not sure either,
784
00:39:14.100 --> 00:39:16.270 line:15%
I think there was some legislative history,
785
00:39:16.270 --> 00:39:21.170 line:15%
that spoke to, you know,
786
00:39:21.170 --> 00:39:24.700 line:15%
a different method of not going with rolling,
787
00:39:24.700 --> 00:39:28.330 line:15%
but then that was not adopted in the revision
788
00:39:28.330 --> 00:39:29.703 line:15%
of the referendum.
789
00:39:32.040 --> 00:39:34.000 line:15%
But it's my understanding that
790
00:39:34.000 --> 00:39:36.553 line:15%
that's where they are with this,
791
00:39:36.553 --> 00:39:40.010 line:15%
The referendum whose language includes
792
00:39:40.010 --> 00:39:42.353 line:15%
rolling decision-making or not?
793
00:39:42.353 --> 00:39:44.430 line:15%
I don't believe so,
794
00:39:44.430 --> 00:39:45.870 line:15%
but I think there was some legislative history
795
00:39:45.870 --> 00:39:48.850 line:15%
about the fix to the referendum,
796
00:39:48.850 --> 00:39:53.180 line:15%
that would have prescribed a particular process for the CCC,
797
00:39:53.180 --> 00:39:55.143 line:15%
and that was ultimately not adopted.
798
00:39:56.670 --> 00:40:01.240
But you don't disagree that allowing municipalities
799
00:40:03.190 --> 00:40:07.880
to add on additional fees,
800
00:40:07.880 --> 00:40:12.713
and donations and whatnot can lead to trouble, right?
801
00:40:14.320 --> 00:40:16.610 line:15%
Yeah, Chief Justice, Budd, yes, I agree,
802
00:40:16.610 --> 00:40:17.540 line:15%
it can lead to trouble,
803
00:40:17.540 --> 00:40:21.430 line:15%
and I think that is why the city put it in writing.
804
00:40:21.430 --> 00:40:24.487 line:15%
And we had initially negotiated,
805
00:40:24.487 --> 00:40:26.710 line:15%
an agreement under these terms,
806
00:40:26.710 --> 00:40:28.890 line:15%
with the existing medical provider,
807
00:40:28.890 --> 00:40:31.220 line:15%
and we used that as the template,
808
00:40:31.220 --> 00:40:35.060 line:15%
for what we put out there for the HCA application process,
809
00:40:35.060 --> 00:40:36.260 line:15%
for the remainder.
810
00:40:36.260 --> 00:40:39.900 line:15%
Keep in mind that ATG, our original medical dispensary
811
00:40:39.900 --> 00:40:41.680 line:15%
that was within the city,
812
00:40:41.680 --> 00:40:45.190 line:15%
we were already a party to a community benefits agreement,
813
00:40:45.190 --> 00:40:50.040 line:15%
with ATG, prior to them becoming a retailer.
814
00:40:50.040 --> 00:40:53.530 line:15%
And we just moved those when we reached
815
00:40:53.530 --> 00:40:56.170 line:15%
a combined agreement, we included community benefits,
816
00:40:56.170 --> 00:40:59.523 line:15%
inside the HCA, along with the community impact.
817
00:41:01.600 --> 00:41:03.250
So your position counsel is that,
818
00:41:03.250 --> 00:41:06.570
so long as the town is transparent,
819
00:41:06.570 --> 00:41:09.020
about these extra fees,
820
00:41:09.020 --> 00:41:13.210
for whatever purpose and whatever they're called,
821
00:41:13.210 --> 00:41:17.640
they really have an unlimited ability to charge these fees,
822
00:41:17.640 --> 00:41:22.640
and then to award the HCA to those who are able to meet
823
00:41:22.980 --> 00:41:26.143
this economic bump for the city.
824
00:41:27.580 --> 00:41:30.230 line:15%
We indicated and I believe our process bears
825
00:41:30.230 --> 00:41:32.730 line:15%
this out that we only required the minimum.
826
00:41:32.730 --> 00:41:34.840 line:15%
So there was not gonna be a bidding war
827
00:41:34.840 --> 00:41:37.330 line:15%
about who was gonna get an HCA.
828
00:41:37.330 --> 00:41:38.770 line:15%
We had our minimum terms,
829
00:41:38.770 --> 00:41:41.280 line:15%
that we'd already agreed to with ATG.
830
00:41:41.280 --> 00:41:44.363 line:15%
And we were gonna just carry those through.
831
00:41:44.363 --> 00:41:47.640 line:15%
As far as unlimitedness, I believe, you know,
832
00:41:47.640 --> 00:41:50.440 line:15%
we come down to the point where a particular retailer
833
00:41:50.440 --> 00:41:52.940 line:15%
would say, no, thanks, I think I'll go to Danvers,
834
00:41:52.940 --> 00:41:54.205 line:15%
I think I'll go to...
835
00:41:54.205 --> 00:41:56.850
No, it's just a marketplace, correcting itself,
836
00:41:56.850 --> 00:41:59.120
I'm not willing to, you know,
837
00:41:59.120 --> 00:42:02.430
make a donation of $100,000 this year,
838
00:42:02.430 --> 00:42:04.403
and so I'm not gonna apply for Salem,
839
00:42:05.504 --> 00:42:07.640
but there's nothing to that three percent cap
840
00:42:07.640 --> 00:42:10.880
in the statute, so long as whatever you call it,
841
00:42:10.880 --> 00:42:14.090
is something other than the community impact fee.
842
00:42:14.090 --> 00:42:15.450 line:15%
I believe the city is entitled
843
00:42:15.450 --> 00:42:20.110 line:15%
to negotiate community benefits in the form of donations.
844
00:42:20.110 --> 00:42:22.330 line:15%
And that's, you know, the city has that power
845
00:42:22.330 --> 00:42:24.150 line:15%
within the general laws,
846
00:42:24.150 --> 00:42:27.100 line:15%
side-by-side with the responsibilities and powers
847
00:42:27.100 --> 00:42:29.603
of local control under chapter 94 G.
848
00:42:30.740 --> 00:42:32.220
(indistinct chatter)
849
00:42:32.220 --> 00:42:37.203
When the host community agreements are up at the CCC
850
00:42:38.290 --> 00:42:41.700
for a determination concerning a license.
851
00:42:41.700 --> 00:42:46.610
Does the statute or regulations provide an opportunity
852
00:42:46.610 --> 00:42:49.270
for the municipality to be heard,
853
00:42:49.270 --> 00:42:54.260
as it relates to certain details, like how many dispensary
854
00:42:54.260 --> 00:42:56.683
should there really be on Highland Avenue?
855
00:42:58.440 --> 00:43:02.260 line:15%
No, we don't have any role at the CCC
856
00:43:02.260 --> 00:43:06.280 line:15%
other than certifying that we entered into an HCA,
857
00:43:06.280 --> 00:43:10.830 line:15%
and then later, right after or it's ready to go,
858
00:43:10.830 --> 00:43:13.230 line:15%
we certify that they are in compliance
859
00:43:13.230 --> 00:43:14.830 line:15%
with all local ordinances, bylaws,
860
00:43:14.830 --> 00:43:17.660 line:15%
meaning that perhaps they are in some communities
861
00:43:17.660 --> 00:43:20.111 line:15%
where zoning comes after HCA.
862
00:43:20.111 --> 00:43:22.350 line:15%
Then we, you know, the city or town would sign off
863
00:43:22.350 --> 00:43:25.260 line:15%
that they met, they're in compliance with zoning,
864
00:43:25.260 --> 00:43:26.843 line:15%
and any of the local licensing.
865
00:43:27.850 --> 00:43:30.730 line:15%
Salem had this HCA process, but many cities and towns,
866
00:43:30.730 --> 00:43:35.730 line:15%
have almost full-blown local licensing schemes,
867
00:43:35.960 --> 00:43:39.262 line:15%
that the CCC has also countenance.
868
00:43:39.262 --> 00:43:42.600 line:15%
Does the CCC get all of the materials
869
00:43:42.600 --> 00:43:46.200 line:15%
from your process when a license goes before them?
870
00:43:46.200 --> 00:43:51.170 line:15%
Do they see the terms and conditions you establish to play?
871
00:43:52.740 --> 00:43:55.170 line:15%
And do they get your process,
872
00:43:55.170 --> 00:43:59.213 line:15%
or do they just get sort of selective parts?
873
00:44:00.534 --> 00:44:02.330 line:15%
They don't ask us for any of that.
874
00:44:02.330 --> 00:44:04.210 line:15%
I mean, our process has been online,
875
00:44:04.210 --> 00:44:06.730 line:15%
and has been made publicly available,
876
00:44:06.730 --> 00:44:08.420 line:15%
you know, since the beginning.
877
00:44:08.420 --> 00:44:10.120 line:15%
So we have a published process,
878
00:44:10.120 --> 00:44:12.470 line:15%
and that's the other thing to keep in mind here is that,
879
00:44:12.470 --> 00:44:13.900 line:15%
you know, there are cities and towns
880
00:44:13.900 --> 00:44:15.730 line:15%
with basically no published process,
881
00:44:15.730 --> 00:44:20.730 line:15%
and that companies individually approach the mayor
882
00:44:21.440 --> 00:44:23.250 line:15%
or the board of selectmen,
883
00:44:23.250 --> 00:44:27.900 line:15%
so like persons and ask for an HCA,
884
00:44:27.900 --> 00:44:30.110 line:15%
and it's either given or it's not.
885
00:44:30.110 --> 00:44:34.130 line:15%
And I think that's the area where the most concern,
886
00:44:34.130 --> 00:44:35.323 line:15%
you know, could lie.
887
00:44:36.860 --> 00:44:38.440 line:15%
Our process was transparent.
888
00:44:38.440 --> 00:44:40.180 line:15%
We were clear about what we wanted,
889
00:44:40.180 --> 00:44:43.460 line:15%
and we held everyone to the same standard.
890
00:44:43.460 --> 00:44:46.303 line:15%
And I think that, you know, all things,
891
00:44:47.420 --> 00:44:49.170 line:15%
a different mayor, could've made a different decision.
892
00:44:49.170 --> 00:44:50.940 line:15%
I think, as I pointed out in the brief,
893
00:44:50.940 --> 00:44:52.910 line:15%
but in the end it's the mayor's discretion,
894
00:44:52.910 --> 00:44:55.900 line:15%
as to who to enter into one of these agreements with,
895
00:44:55.900 --> 00:44:59.213 line:15%
it's entirely discretionary decision,
896
00:44:59.213 --> 00:45:02.820 line:15%
and she didn't abuse that discretion, in this case,
897
00:45:02.820 --> 00:45:07.820 line:15%
in choosing four retailers and rejecting four others.
898
00:45:09.200 --> 00:45:12.300 line:15%
And the other thing to keep in mind too, is that, you know,
899
00:45:12.300 --> 00:45:17.220 line:15%
should the CCC reject or not issue final licenses,
900
00:45:17.220 --> 00:45:20.060 line:15%
there is an, you know, the matter isn't over yet,
901
00:45:20.060 --> 00:45:22.607 line:15%
you know, there there's an opportunity,
902
00:45:22.607 --> 00:45:24.473 line:15%
to come back in here.
903
00:45:26.300 --> 00:45:29.020 line:15%
You know, we end up below our cap,
904
00:45:29.020 --> 00:45:31.410 line:15%
and there's also an opportunity politically for companies
905
00:45:31.410 --> 00:45:35.323 line:15%
like Mederi and others to come in and seek to lift the cap.
906
00:45:37.570 --> 00:45:39.703
Okay, any other questions?
907
00:45:40.670 --> 00:45:41.503
Great.
908
00:45:41.503 --> 00:45:42.480
Thanks so much.
909
00:45:42.480 --> 00:45:44.580
We'll take our morning break at this time.