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Audit finds no fault with process city followed to pick marijuana businesses

Springfield City Hall at night
Paul Tuthill
An internal audit found missing paperwork and clerical errors in the work of a marijuana business review panel that forwarded recommendations to the mayor.

City Councilor who requested audit is dissatisfied

An internal audit of how the city of Springfield goes about choosing who can pursue a marijuana business venture found the process to be “sound” and “fair,” but some changes were recommended.

An audit that looked at how the city of Springfield in 2019 and again this year reviewed and picked applicants to negotiate host community agreements to operate marijuana businesses found clerical errors but nothing improper.

“The city’s selection process was sound, it was objective and fair,” said auditor Yong No.

He said mistakes were made adding up the scores assigned to the applicants by a review committee potentially costing one company a chance to advance in the selection process.

“This is a manual process and like all manual process it is prone to errors,” Yong said at a recent meeting of the City Council’s Audit Committee.

“It was unfortunate that it happened, but from what we can tell it was just a clerical mistake,” he said.

The audit did not identify companies impacted by the mistake.

Earlier this year, 24 companies applied when the city opened a second round of bidding for marijuana businesses. A nine-member advisory committee reviewed the applications, ranked them, and forwarded the findings to Mayor Domenic Sarno. He selected six retail businesses, one cultivation company, and two transportation businesses to negotiate host community agreements.

After a lawyer for a competing cultivation company complained that the mayor’s choice was in violation of the city’s zoning regulations for marijuana operations, City Councilor Justin Hurst called for the audit.

This issue, however, was not covered in No’s audit.

Hurst, who is a frequent critic of the Sarno administration and is seen as a potential candidate for mayor in 2023, said he plans to ask the state Attorney General and the Cannabis Control Commission to investigate further.

“It is clear to me based on the audit that there were some errors that are costing individuals potentially millions of dollars by not being able to operate in the city of Springfield and to me that is problematic,” Hurst said in an interview with WAMC News.

He said he does not agree with the auditor’s conclusion that the city’s process is sound and fair.

“I think it is important for the people to have a process that is fair and if it is not fair, we need to call it into into question, which is what I will do,” Hurst said.

One finding in the audit is that paperwork from the review of marijuana business applications in 2019 is missing. In response, City Solicitor Ed Pikula said a checklist will be drawn up to assure all records are kept in the future.

“There is always room for improvement and this is clearly one area we need to improve,” Pikula said. “These records are important regardless of the outcome and we’ve got to do a better job of it.”

The audit also found a marijuana transportation company selected by the mayor is not in compliance with the city’s marijuana zoning ordinance. Pikula said the company is operating a “dispatch office” and is not keeping marijuana on the premises and so the city’s zoning law should not apply to it.

“This portion of the ordinance was unenforceable against this applicant, it’s as simple as that,” Pikula said.

The recreational marijuana industry has been slow to make inroads in Springfield since the first legal sales took place in Massachusetts more than three years ago.

Just two cannabis store have opened in Springfield. In Northampton, a city with about one-fifth the population of Springfield, there are now eight recreational marijuana retailers.

The record-setting tenure of Springfield Mayor Domenic Sarno. The 2011 tornado and its recovery that remade the largest city in Western Massachusetts. The fallout from the deadly COVID outbreak at the Holyoke Soldiers Home. Those are just a few of the thousands and thousands of stories WAMC’s Pioneer Valley Bureau Chief Paul Tuthill has covered for WAMC in his nearly 17 years with the station.