MA Cannabis Entrepreneur Blasts Municipalities Unfair Collection Practices, Fights "Impact Fees"

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The Haverhill, Massachusetts cannabis entrepreneur whose lawsuit has shined a spotlight on the state’s controversial law allowing municipalities to collect “impact fees” from cannabis retailers is accusing her host city of unfair collection of the fees.

Caroline Pineau, owner of Stem Haverhill, recently requested that Haverhill Mayor James Fiorentini place the three impact fees paid by Stem since its 2019 opening into an interest-bearing escrow account. Pineau’s request came after the Lawrence Eagle-Tribune newspaper reported that other cannabis retailers in the city had made one or no payments.

“I find this to be an extraordinary, and indefensible, double standard,” Pineau wrote in her June 26 letter, which requested that her three payments remain in escrow until the city “enacts a consistent and equitable impact fee payment or non-payment policy” applicable to all cannabis businesses.

"I also request that the city refrain from all future impact fee collections until a clear and equitable payment policy is in place. I find it disturbing that the city is negotiating on a store-by-store basis rather than establishing an across-the-board policy that treats all operators fairly and equally,” Pineau continued.

Stem has made three impact fee payments to the Haverhill, totaling $887,487.91. The payments were made on May 28, 2021 ($358,942.53), May 31, 2022 ($328,568.35) and June 1, 2023 ($199,977.03).

The June 15 Lawrence Eagle-Tribune story cited city records showing that the city’s other three cannabis retail shops have paid far less than Stem in impact fees. Full Harvest Moonz has made a single payment of $314,246 and CNA Stores has made a single payment of $176,864. The third shop, Mello, has made no impact fee payments.

Pineau, who filed suit against Haverhill in 2021 in part to force Haverhill to produce documentation of actual cost impacts to the city by Stem’s cannabis sales, said her efforts have generated significant attention to municipalities collecting impact fees without demonstrating actual impacts. Since Pineau began her legal battle, several communities have returned the impact fees or have declined to collect any more fees.

“I’m grateful that my legal efforts have benefited many individual operators and the industry in general, but those efforts have come at a great legal cost borne by me alone. To see that other operators in Haverhill are not being forced to pay the fees while I still am discouraging and incredibly unfair,” Pineau said.

Pineau’s suit against Haverhill is still pending.