Highlights of the New Massachusetts Cannabis Reform Act
Massachusetts Governor Charlie Baker signed into law all but one section of Senate Bill S3096, “An Act Relative to Equity in the Cannabis Industry,” which took effect July 31, 2022 (the Act). The Act, as amended by the Governor, was enacted as Chapter 180 of the Acts of 2022.
As indicated by the title, a principal feature of the Act is to establish a new funding mechanism to support cannabis ventures led by social equity and economic empowerment program participants certified by the Cannabis Control Commission (CCC). The Act also implements various other enhancements and reforms to Massachusetts cannabis, including:
- confirming the costs potentially chargeable to cannabis licensees subject to the three percent (3%) state law cap;
- expressly granting the CCC authority to review Host Community Agreements (HCAs) between municipalities and cannabis applicants;
- extending the potential HCA payment period from five years to eight years;
- requiring municipalities to furnish documentation of costs being attributed to cannabis licensees as a required condition for requesting HCA payments from the licensee;
- establishing a process for municipalities to authorize social consumption establishments (so-called cannabis cafes); and
- reversing the former application of U.S. tax code Section 280E for Massachusetts state tax purposes that had previously substantially limited the ability of Massachusetts cannabis ventures to claim ordinary business deductions on state tax returns.