Springfield City Councilors are questioning terms of the proposed host community agreements with four companies looking to open the first marijuana stores in the western Massachusetts city.
Officials with the marijuana company INSA, Inc. said an offer to donate $200,000 to a school science program and for the benefit of a public park were personal choices and not the result of pressure from City Hall.
The five-year host community agreement negotiated with the administration of Mayor Domenic Sarno has INSA making a $20,000 annual donation to the Environmental Center for Our Schools (ECOS) program and $20,000 annually for maintenance and repairs at Riverfront Park.
Melinda Phelps, an attorney for INSA, told City Councilors at a hearing Thursday that two of the company’s founders attended the ECOS program when they were students, learned about horticulture, and as a result were inspired to pursue a career in marijuana cultivation.
"They feel very passionately and strongly about that program and wanted to give back," said Phelps.
As for the Riverfront Park donation, Phelps noted it abuts the rear of the building where INSA proposes to open its recreational cannabis shop on West Columbus Ave.
The three other marijuana companies looking to open stores in the city have not promised similar payments to specific programs or projects, except for supporting a drug education effort by the city’s health department.
All four businesses would be required to pay the city 3 percent of their stores’ annual gross revenue – the maximum allowed under state law.
Tasheena Davis, an attorney for the city who was the lead negotiator for the marijuana host community agreements, said it is not illegal for companies to offer donations that exceed the 3 percent cap.
"We didn't request if from them, so it is voluntary," said Davis. "It is not something where we are saing 'You can't have a host community agreement with us unless you contribute these funds.' This is straight from the company."
The scrutiny of the host community agreements in Springfield comes amidst a backdrop of growing concern about local control over the burgeoning legal marijuana industry in Massachusetts.
Some companies – in particular minority-owned startups – have complained of a “pay-to-play” culture in municipalities that favor established deep-pocketed operators.
The U.S. Attorney for Massachusetts has charged the mayor of Fall River with extorting cash payments from marijuana businesses.
Marijuana companies are required to obtain host community agreements before applying to the state’s Cannabis Control Commission for a final license to operate. But, the commission has decided it lacks the authority to review the terms of the local agreements.
Springfield City Council President Justin Hurst said after Thursday’s two-hour hearing he still has questions about INSA’s proposed donations.
"So, I think we need to dig a little bit deeper and hopefully we'll get those questions (answered) on Monday," said Hurst.
City Councilor Adam Gomez, who chairs the Economic Development Committee, said the four proposed host community agreements will be on the agenda for Monday night’s City Council meeting without a recommendation from the committee.
"Some agreements I like, some of them I don't," said Gomez declining to be more specific.
He added he wants agreements with the companies that are “fair across the board.”