The Marijuana Act: Overview of the Municipal Role Presented by - - PDF document

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The Marijuana Act: Overview of the Municipal Role

Presented by Brandon H. Moss, Esquire

Murphy, Hesse, Toomey & Lehane, LLP

March 10, 2017

The FEDERAL Law

 The federal Controlled Substances Act of 1970

(“CSA”) (21 U.S.C. 801 et seq.) regulates the use, distribution, possession, manufacture and importation

• f certain drugs.

 Marijuana remains a Schedule I drug under the CSA.

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The FEDERAL Law (continued)

 “Schedule I drugs are categorized as such because of their

high potential for abuse, lack of any accepted medical use, and absence of any accepted safety for use in medical supervised treatment.” Gonzales v. Raich, 545 U.S. 1, 14- 15 (2005) (citing 21 U.S.C. § 812(b)(1)).

 “By classifying marijuana as a Schedule I drug, as

• pposed to listing it on a lesser schedule, the manufacture,

distribution, or possession of marijuana became a criminal

• ffense,” with an exception not applicable here. See

Raich, 545 U.S. at 14; see also 21 U.S.C. § 812(c).

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2 Massachusetts is not in unchartered territory

 Other states legalizing recreational marijuana

establishments:

 Colorado and Washington (2012 election);  Oregon and Alaska (2014 election); and  California, Maine, Massachusetts and Nevada

(2016 election).

 District of Columbia (2014 election) voted to legalize

marijuana possession/cultivation for personal recreational use (not commercial production/sale).

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Massachusetts and its Ballot Questions

 2008 State Election: Question 2 (“Massachusetts

Sensible Marijuana Policy Initiative”).

 2012 State Election: Question 3 (“Massachusetts

Medical Marijuana Initiative”).

 2016 State Election: Question 4 (“An Initiative Petition

for a Law Relative to the Regulation and Taxation of Marijuana”).

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Ballot Question 2 (2008 Election)

 Eliminated criminal penalties for possession of 1 ounce or

less, instead using civil penalties. The $100 civil penalty went to the municipality where the offense occurred.

 No Criminal Offender Record Information reports for

covered violations.

 The 2008 ballot question did not affect penalties for

cultivating, trafficking and selling marijuana, or operating under the influence.

 Minors were subject to additional penalties (e.g., maximum

$1,000 fine, educational program, community service, and parental notification).

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3 Ballot Question 2 (2008 Election) (continued)

 Local action was permitted under the 2008 ballot question

in connection with the public use of marijuana. In particular, municipalities were expressly authorized to adopt bylaws and ordinances prohibiting or regulating marijuana or tetrahydrocannabinol (THC) in public places and to provide additional penalties for public use.

 Subsequently codified as Chapter 387 of the Acts of 2009,

and resulting in M.G.L. c. 94C, Section 32L through 32N.

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Ballot Question 2 (2012 Election)

 The 2012 ballot question:

 Authorized the “medical use of marijuana” – this

included acquiring, cultivating, possessing, processing, transferring, transporting, selling, distributing, dispensing or administering marijuana to aid “qualifying patients in the treatment of debilitating medical conditions, or the symptoms thereof.”

 Established medical marijuana treatment centers (or

registered marijuana dispensaries), which are not-for- entity entities, registered with the Department of Public Health, and involved with the medical use of marijuana.

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Ballot Question 2 (2012 Election) (continued)

 The 2012 ballot question:

 Limited the medical use of marijuana to qualifying patients

and their caregivers.

 Eliminated state prosecution and criminal penalties for

permitted conduct.

 Contemplated hardship cultivation registrations.  Did not require accommodation of on-site medical use in any

place of employment, school bus, school grounds, youth center, or correctional facility, or the smoking of marijuana for medical purposes in any public place.

 Did not affect Massachusetts laws applicable to marijuana for

non-medical use.

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4 Ballot Question 2 (2012 Election) (continued)

 The 2012 ballot question was codified as Chapter 369 of

the Acts of 2012.

 In 2013, the Department of Public Health (“DPH”) adopted

105 CMR 725.000, “Implementation of an Act for the Humanitarian Medical Use of Marijuana.”

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Ballot Question 2 (2012 Election) (continued)

 Under the DPH regulations:

 Registered marijuana dispensaries (“RMDs”) must

comply with local siting requirements.

 In the absence of local requirements, no RMD may be

500 feet from:

 A school;  A daycare center; and  Any facility in which children commonly congregate.

The 500’ buffer zone is measured by a straight line between the facility and the closest point of the RMD.

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Ballot Question 2 (2012 Election) (continued)

 Under the DPH regulations, RMDs and registered persons

must comply with applicable local rules, regulations, bylaws and ordinances.

 The DPH regulations do not require involvement by

municipalities and local boards of health in regulating RMDs, qualifying patients with hardship cultivation registrations, or other components of marijuana for medical use.

 Lawful local oversight and regulations, such as fee

requirements, that did not conflict with or impede 105 CMR 725.000 are permitted.

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5 Ballot Question 2 (2012 Election) (continued)

 The result:

 Zoning moratoriums;  Mitigation/community benefit agreements;  General ordinances/bylaws; and  Zoning ordinances/bylaws (such as special permit

requirements, site plan requirements, and/or zoning districts where RMDs could be located).

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And…FINALLY…Ballot Question 4 (2016 Election)

 Question 4 at the 2016 state election essentially

legalized marijuana for non-medical uses, with certain prohibitions and limitations.

 Question 4 passed by a margin of 53.66%-46.34%.  Question 4 had an effective date of December 15, 2016.  Question 4 is codified as Chapter 334 of the Acts of

2016.

 Portions of Question 4 were amended by Chapter 351 of

the Acts of 2016 – this created a 6 month extension to deadlines under Question 4.

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There is…or rather, will be…a new sheriff in town…

 The Cannabis Control Commission (“CCC”) is

charged with the supervision and regulation of marijuana establishments.

 3 Members: 1 Commissioner + 2 Associate

Commissioners (appointed by Massachusetts State Treasurer).

 A maximum of 2 Members in the same political party.  The Commissioner serves the same term as the

Massachusetts State Treasurer.

 The Associate Commissioners serve 4 year terms.

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6 There is…or rather, will be…a new sheriff in town…(continued)

 The CCC must enact certain regulations to

administer, clarify and enforce laws involving the regulation and licensing of marijuana establishments.

 There are 15 subjects that the CCC’s regulations

must address, including:

 Initial and renewal licenses for marijuana

establishments;

 Fees for license applications, and for initial/renewal

licenses for marijuana establishments (up to the maximum permitted under Chapter 94G);

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There is…or rather, will be…a new sheriff in town…(continued)

 Qualifications to be licensed and minimum

employment standards in connection with

• perating marijuana establishments;

 Participation in the regulated marijuana industry by

individuals “disproportionately harmed” from marijuana prohibition and enforcement;

 Security requirements;  Preventing sales to individuals under 21 years old;  Record keeping and tracking marijuana and

marijuana products;

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There is…or rather, will be…a new sheriff in town…(continued)

 Health and safety standards;  Packaging requirements;  Labeling requirements;  Requirements for testing of random samples;  Safe disposal requirements;

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7 There is…or rather, will be…a new sheriff in town…(continued)

 Reasonable restrictions for signs, marketing,

displays and advertising;

 License transfers; and  Enforcement; fee and penalty collection;

suspending or terminating licenses; and appeals of civil penalties or licensing actions.

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There is…or rather, will be…a new sheriff in town…(continued)

 Subjects that the CCC’s regulations may, but are not

required to, address:

 Additional types/classes of licenses:

 “Limited” activities – cultivation, processing,

manufacturing, possession, storage, or delivery;

 On-premises consumption;  Special events consumption in limited areas; or  Scientific research or education.

 Regulating cultivation, processing, distribution, and sale

• f hemp by marijuana establishments.

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There is…or rather, will be…a new sheriff in town…(continued)

 The CCC, if an analysis has occurred, can restrict the

amount of marijuana cultivated in order to limit illicit markets for marijuana. If the total amount of marijuana is restricted, the CCC must reconsider the decision biannually and the limit must ensure a sufficient supply

• f marijuana and marijuana products.

 The limit cannot be imposed if importing/exporting

marijuana to/from Massachusetts is not prohibited by federal law.

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8 There is…or rather, will be…a new sheriff in town…(continued)

 The CCC cannot adopt six types of regulations, such as :

 Prohibiting marijuana establishments or making the

• peration of a marijuana establishment “unreasonably

impracticable”;

 Preventing an RMD and an “experienced marijuana

establishment operator” from operating an RMD and a marijuana establishment at a shared location.

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The CAB is also driving this…

 In addition to the CCC, there is a 15 member

Cannabis Advisory Board (“CAB”), to be appointed by the Governor by August 1, 2017.

 CAB members study and make recommendations on

regulating marijuana and marijuana products.

 The CAB meets at the discretion of the CCC.  CAB members are unpaid, but will be reimbursed for

their expenses.

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The CAB is also driving this…(continued)

 The CAB:

 Advises the CCC on marijuana cultivation,

processing, manufacturing, transportation, distribution, testing, and sale;

 Reviews matters as requested by the CCC;  Suggests guidelines, rules, regulations, and related

changes to the CCC; and

 Counsels on the preparation of regulations under

M.G.L. c. 64N (taxation) and 94G (regulation).

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9 The Other Type of “Green” – Tax Revenue

 Massachusetts General Laws Chapter 64N deals with

taxing non-medical marijuana sales.

 3.75% state excise tax for the sale of marijuana and

marijuana products by marijuana retailers (excluding sales to marijuana establishments).

 This is in addition to the Massachusetts sales tax

under M.G.L. c. 64H, § 2.

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The Other Type of “Green” – Tax Revenue (continued)

 Local Action Required:

 Municipalities can adopt a local sales tax for the sale

• r transfer of marijuana and marijuana products by

marijuana retailers (excluding to marijuana establishments).

 The local sales tax may be up to 2% of the total sale

price.

 The local sales tax is collected by the

Commonwealth, but distributed, credited and paid at least quarterly by the Massachusetts State Treasurer.

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The NEW Law

 Question 4 addresses the regulation and distribution

• f marijuana for non-medical use in a new

Massachusetts General Laws Chapter 94G (“Chapter 94G”).

 Chapter 94G addresses permitted, prohibited, and

limited activities, and defines the various categories of “marijuana establishments” that are subject to licensing by the soon-to-be-formed CCC.

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10 The Businesses

 Chapter 94G regulates the following “marijuana

establishments,” all of which must have a license:

 Marijuana cultivators – they cultivate, process and

package marijuana; deliver marijuana to marijuana establishments; and transfer marijuana to other marijuana establishments, but not to consumers.

 Marijuana testing facilities – they test marijuana

and marijuana products, and certify for potency and the existing of contaminants.

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The Businesses (continued)

 Marijuana product manufacturer – they receive,

manufacture, process, and package marijuana and marijuana products; deliver marijuana and marijuana products to marijuana establishments; and transfer marijuana and marijuana products to other marijuana establishments – no involvement with consumers.

 Marijuana retailer – they buy and deliver marijuana

and marijuana products from marijuana establishments; and deliver, sell or other transfer marijuana and marijuana products to consumers or marijuana establishments.

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The Businesses (continued)

 Other types of licensed marijuana-related

businesses – which may be addressed through future action or regulation by the CCC.

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11 Experience Matters…

 An “experienced marijuana establishment operator”

includes:

 an RMD that has a registration in good standing; or  is a reorganized marijuana business created

through a vote of at least 2/3 of the board of directors of an entity that filed a registration to

• perate an RMD to DPH before October 1, 2015

and which received a provisional registration to

• perate an RMD before December 15, 2016 (the

effective date of Chapter 94G).

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Other Key Terms

 Marijuana accessories – equipment, products, devices

• r materials that are intended or created for planting,

propagating, cultivating, growing, harvesting, manufacturing, compounding, converting, producing, processing, preparing, testing, analyzing, packaging, repackaging, storing, containing, ingesting, inhaling, or

• therwise introducing marijuana into a person.

 Marijuana products – products manufactured and having

marijuana or a marijuana extract, and this includes edibles, beverages, topic products, ointments, oils, and tinctures.

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The People

 A “consumer” must be at least 21 years old.  Chapter 94G prohibits knowingly transferring

marijuana, marijuana products, and marijuana accessors to underage persons.

 Chapter 94G prohibits underage persons from

possessing, using, buying, receiving, cultivating, manufacturing, delivering, selling, or otherwise transferring marijuana or marijuana accessories.

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12 Permissible bylaws and ordinances governing marijuana establishments

 Bylaws and ordinances are generally permitted if they are:

 Reasonable;  Not “unreasonably impracticable”;

 This means that compliance creates “unreasonable risk or

require[s] such a high investment of risk, money, time or any other resource or asset that a reasonably prudent businessperson would not operate a marijuana establishment.” (Chapter 94G, Section 1(p)).

 Not in conflict with Chapter 94G or the CCC’s

regulations; and

 Within the 5 categories of permitted regulation.

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Category No. 1 of Regulation

 “Time, place and manner” regulations of

marijuana establishments and businesses dealing in marijuana accessories. (Chapter 94G, Section 3(a)(1)).

 However, marijuana establishments that

cultivate, manufacture or sell marijuana or marijuana products must be allowed to operate in the same area where an RMD can engage in the same kind of activity.

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Category No. 2 of Regulation

 Restricting the total number of marijuana establishments in

the municipality. (Chapter 94G, Section 3(a)(2)).

 Also, a municipality can adopt an ordinance or bylaw “by a

vote of the voters of that city or town” which:

 Prohibits 1 or more types of marijuana establishments;  Restricts the number of marijuana retailers to 20% of

the number of off-premises retail liquor licenses; or

 Restricts the number of any type of marijuana

establishment to less than the number of RMDs registered to engage in the same kind of activity.

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13 Category No. 2 of Regulation (continued)

 What is a “vote of the voters”?

 Certain municipalities are proposing prohibitions for

adoption at a municipal election and/or through the local legislative body, whether through a general and/or zoning enactment;

 Other municipalities are waiting; and  Remaining municipalities are contemplating action or

undecided.

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Category No. 3 of Regulation

 Regulating cultivation, processing and manufacturing

activities that constitute a public nuisance. (Chapter 94G, Section 3(a)(3)).

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Category No. 4 of Regulation

 Reasonable regulations of public signs for marijuana

• establishments. (Chapter 94G, Section 3(a)(4)).

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14 Category No. 5 of Regulation

 Adopting a civil penalty for violating an ordinance or

bylaw under the local control provisions of Chapter 94G, similar to a penalty imposed for violating an

• rdinance or bylaw involving alcoholic beverages.

(Chapter 94G, Section 3(a)(5)).

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Transportation Regulations

 Bylaws and ordinances that make transportation of

marijuana or marijuana products “unreasonably impracticable” are prohibited.

 Bylaws and ordinances cannot prohibit the

transportation of marijuana or marijuana products.

 Westborough Special Town Meeting of October 17,

2016, Attorney General’s Office Case #8155: zoning bylaw prohibited delivery of non-medical marijuana to consumers except as allowed by special permit.

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Transportation Regulations (continued)

 Westborough Special Town Meeting of October 17,

2016, Attorney General’s Office Case #8155:

 Zoning bylaw prohibited delivery of non-medical

(retail) marijuana to consumers except as allowed by special permit.

 This zoning bylaw was approved, with the caveat that

• ff-site delivery of non-medical (retail) marijuana

could not be totally prohibited. Special permit conditions could not be “unreasonably impracticable.”

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15 Dover Amendment

 The growing, cultivation, distribution or dispensation of

marijuana is not a protected use…and therefore does not qualify for special treatment under the so-called Dover Amendment (M.G.L. c. 40A, § 3).

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Examples of Prohibited Regulations

 Westborough Special Town Meeting of October 17, 2016,

Attorney General’s Office Case #8155:

 Proposed prohibition on growing or cultivating

marijuana and marijuana-based products inside a residence or in a residential zoning district disapproved because it conflicted with Chapter 94G.

 Note: Language prohibiting the sale of marijuana

and marijuana-based products outside a residence

• r in a residential zoning district was left intact.

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Examples of Prohibited Regulations (continued)

 Westborough Special Town Meeting of October 17, 2016,

Attorney General’s Office Case #8155:

 Proposed prohibition on cultivation by a resident, a

qualifying patient, or a personal caregiver disapproved because it conflicted with Chapter 94G and Chapter 369 of the Acts of 2012 (the Medical Marijuana Act).

 Note: Language prohibiting cultivation by marijuana

establishments, RMDs, and dispensing facilities

• ther than where specifically authorized in the

zoning bylaw was left intact.

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16 WAIT A MINUTE…Moratoriums

 West Bridgewater Special Town Meeting of

December 14, 2016, Attorney General’s Office Case #8242:

 Temporary zoning moratorium through June 18,

2018 adopted by Town Meeting and approved by the Attorney General.

 Note: This moratorium was approved before

Chapter 351 of the Acts of 2016, which extended dates by six months.

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WAIT A MINUTE…Moratoriums (continued)

 Stated purposes of West Bridgewater moratorium

included:

 studying and considering the regulation of

recreational marijuana establishments and marijuana retailers and addressing the novel and complex legal, planning and public safety issues;

 addressing the potential impact of state

regulations; and

 undertaking a planning process to consider zoning

amendments.

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WAIT A MINUTE…Moratoriums (continued)

 West Bridgewater’s zoning moratorium was: (1)

limited in time (June 30, 2018); and (2) limited in scope (use of land and structures for marijuana establishments and retailers).

 Questions presented from West Bridgewater approval

(Footnote 2 from decision):

 Whether a municipality can license marijuana

establishments?

 Whether a complete ban requires a bylaw vote or

town ballot vote or both?

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17 On-Premises Consumption

 On-premises consumption requires a vote by the

voters of the municipality at a biennial state election.

 To place the question on the ballot:

 At least 10% of the voters of the municipality voting

at the last state election must sign a petition, filed with the city council or board of selectmen.

 The petition must comply with applicable

requirements for municipal initiative petitions.

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On-Premises Consumption (continued)

 If a majority of voters “are not in favor” of allowing on-

premises consumption, the municipality “shall be taken to have no authorized the consumption of marijuana and marijuana products” on-premises.

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It takes two to tango…mitigation agreements

 Many municipalities have entered into

mitigation/community benefits agreements with RMDs.

 Chapter 94G contemplates agreements between

municipalities and marijuana establishments, however:

 Fees paid to a municipality must be: (1) “directly

proportional”; and (2) fees must be “reasonably related” to costs resulting from operation of the business.

 Costs to a municipality from operating the business

must be documented and are a public record.

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18 Stay Away! (Buffer Requirements)

 A marijuana establishment cannot be located, at the

time of a license application, within 500 feet of a pre- existing public or private school serving kindergarten

• r grades 1-12.

 Local action: A municipality can enact an

• rdinance or bylaw that lessens this 500 foot buffer

zone.

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Licensing

 The CCC must promulgate initial regulations by March

15, 2018.

 The CCC must issue regulations necessary to

implement Chapter 94G on or before July 1, 2018, or

• therwise:

 Each RMD can possess, cultivate, process,

manufacture, package, buy, or obtain and test marijuana and marijuana products and can deliver, sell or transfer marijuana to individuals who are at least 21, until the CCC adopts necessary regulations and issues licenses.

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Licensing (continued)

 Licensing schedules:

 Marijuana testing facilities – April 1, 2018;  Experienced marijuana establishment operators

(for 1 marijuana cultivator license, 1 marijuana product manufacturer license, and 1 marijuana retailer license) – April 1, 2018;

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19 Licensing (continued)

 If less than 75 provisional registrations for RMDs have been

issued by April 1, 2018, from all applicants for marijuana retailer, marijuana product manufacturer, and marijuana cultivator licenses – on and after July 1, 2018;

 If this applies, the CCC is limited to licenses for 75

marijuana retailers, 75 marijuana product manufacturers, and 75 marijuana cultivators, until applications are accepted by the April 1, 2019 and April 1, 2020 deadlines

• below. If the CCC cannot issue licenses to all applicants,

then licenses are first issued to qualified applicants that submitted RMD applications to DPH by October 1, 2015 and then by lottery among qualified applicants.

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Licensing (continued)

 All applicants for marijuana retailer licenses and

marijuana product manufacturer licenses – on and after April 1, 2019;

 All applicants for marijuana cultivator licenses – on and

after April 1, 2020.

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Licensing (continued)

 Once an applicant pays the application fee and

completes an application, the CCC must send a copy

• f the application to the proposed host municipality, to

determine if the applicant and the premises qualify for the license and satisfy Chapter 94G.

 The CCC has 90 days to issue the license or send a

notice of rejection (with reasons).

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20 Licensing (continued)

 The CCC must issue the license if:

 The application is compliant with the CCC’s regulations,

the applicant meets the CCC’s requirements, and the applicant meets Chapter 94G and the CCC’s regulations, and has paid the required fee;

 The proposed host municipality has not notified the

CCC that the marijuana establishment would violate a local control (Chapter 94G, Section 3) bylaw or

• rdinance in effect at the time;

 The proposed marijuana establishment satisfies the

buffer zone requirement; and

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Licensing (continued)

 The controlling person of the establishment has not

been convicted of a felony in Massachusetts or an

• ffense in another state that would be a felony in

Massachusetts, excluding solely a prior marijuana

• ffense or a violation of M.G.L. c. 94C, § 34, unless the
• ffense involved distributing a controlled substance

(including marijuana) to a minor.

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Licensing (continued)

 If the total number of marijuana establishments is properly

restricted by the municipality under Chapter 94G, Section 3(a)(2) and the CCC cannot issue a license to all qualified applicants, then:

 Until July 1, 2018, the CCC must issue licenses first to

applicants with the most experience operating RMDs and thereafter by lottery among qualified applicants;

 On and after July 1, 2018, the CCC must issue licenses

by lottery among qualified applicants.

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21 Licensing (continued)

 Licenses are valid for one year, unless the CCC

allows a longer renewal period.

 Renewal licenses are issued within 30 days of a

renewal application and payment of a renewal license fee.

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Not on my property…

 Local Action Potential:

 The state, municipalities, and local government

agencies can prohibit or otherwise regulate possession or consumption of marijuana or marijuana products within government buildings.

 This can be done through regulation, bylaw or

• rdinance.

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Schools

 Chapter 94G does not allow possession or

consumption:

 on the grounds or inside a public/private school

where children attend classes in preschool programs, kindergarten programs, or grades 1-12;

• r

 on the grounds or inside a correctional facility.

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22 Private Property

 Chapter 94G allows a person to prohibit/regulate the

consumption, display, production, processing, manufacture or sale of marijuana and marijuana accessories on property that is owned, occupied or managed.

 Exception: a lease cannot prevent a tenant from

non-smoking consumption on or in the property unless failing to do so would result in the landlord violating a federal law or regulation.

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Employment

 An employer is not required to allow or accommodate

conduct otherwise permitted by Chapter 94G in the workplace.

 Employers can adopt and enforce workplace policies

limiting the consumption of marijuana by employees.

 Check your policies and collective bargaining

agreements!

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Personal Use (Effective 12/15/16)

 Individuals aged 21 years and older are permitted to

possess, use, purchase, process or manufacture 1

• unce or less of marijuana, with a limit of 5 grams as

marijuana concentrate.

 Inside a primary residence, an individual may:

 possess up to 10 ounces of marijuana and marijuana

from plants cultivated on the premises; and

 possess, cultivate or process up to 6 marijuana

plants for personal use, with a limit of 12 marijuana plants for cultivation at any one time.

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23 Personal Use (Effective 12/15/16) (continued)

 An individual may give away or transfer without

remuneration up to 1 ounce of marijuana, and not more than 5 grams of marijuana concentrate, to an individual who is at least 21 years old.

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Not Everything is Allowed

 Existing operating under the influence laws remain intact –

which include operating, navigating or being in control of motor vehicles, trains, aircraft, motorboats, and motorized transport or machinery

 Knowingly transferring marijuana, marijuana products, and

marijuana accessories to underage individuals is prohibited.

 Cultivating or processing marijuana plants cannot be

visible from a public place absent binoculars, aircraft, or

• ptical aids, or in an area without a lock or security device.

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Not Everything is Allowed (continued)

 Possession of over 1 ounce of marijuana or marijuana

products in a residence is prohibited unless the items are secured by a lock.

 No consumption in a public place; no smoking of marijuana

in places where smoking tobacco is prohibited. This excludes authorized on-premises consumption and does not apply to the medical use of marijuana.

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24 What lies in the future?

While the future is hazy, potential issues are:

 CCC regulations;  Potential legislative action;  Clarification on opt-out

procedures/language;

 Clarification on “pot cafes”

(on-site consumption);

 Local action – zoning and

general bylaws;

 Local taxation; and  Federal involvement.

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In closing…

 Questions?  Comments?  Concerns?

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