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Date: 1/24/2023
NORTHAMPTON — After months of debate and deliberations, as well as testimony from the public and city stakeholders, the City Council voted to institute a limit on cannabis dispensaries in the city.
The regulation, which was approved by a 6-3 vote, will limit Northampton to 12 dispensaries, but some exceptions still remain, and the new rule does not apply to anyone who already has a dispensary open. It only applies to future shops.
Background
Northampton currently features 11 dispensaries after a 12th one, The Source, officially shuttered in December.
The cannabis market within the city has been under enormous scrutiny since the summer when a proposal for a cannabis store in Florence on 143 Main St. ignited a public outcry from citizens who occupied the area.
When the Florence shop — named Euphorium LLC — was proposed in the summer, residents living in that area expressed opposition to the idea of a dispensary in their neighborhood, citing concerns about cannabis addiction, their suspected influence of cannabis on children and families in the area, as well as a belief that 12 dispensaries are more than enough.
When caps were discussed in 2018, the council decided to not institute a cap on dispensaries in the city, but after some public opposition to the proposed Florence shop, to the point where a petition against the proposed dispensary was circulating on social media, the council decided to reconsider a cap in future cannabis discussions through their various committees.
The City Council could at any time institute a cap on host community agreements, which are the state-required sign-off documents from local government that allows a business to seek a license in the cannabis industry.
Under state law, cannabis entities must enter into Host Community Agreements with their respective municipalities before submitting their applications to the Cannabis Control Commission (CCC) for license approval. Northampton’s city charter specifically grants power to the mayor to complete this agreement, if desired.
The city considered putting the cap at 10 dispensaries when they conducted discussions in 2017 and 2018.
As a result of these concerns, the City Council invited different experts and panelists across their committee meetings to discuss what effects the cannabis business has had on Northampton since the city’s first dispensary opened in 2018.
Panelists with various expertise were invited to the Council’s Community Services, City Services and Finance Committee to give anecdotes and data on the current industry within Northampton.
Organizations like the Strategic Planning Initiative for Families and Youth (SPIFFY) Coalition at the Collaborative for Educational Services argued that the market is exacerbating youth substance use.
Caroline Johnson, SPIFFY’s public health data and evaluation specialist, argued that there is a link between the number of retailers in the community, substance use and negative consequences.
“Science shows that adolescent cannabis use affects brain development and sets the stage for addiction, social-emotional and economic problems later in life,” Johnson said, at the time of those meetings.
The data presented by Johnson in the fall also states that 12 percent of Northampton Public Schools youth have entered a cannabis shop compared to 7 percent of nationwide youth. Additionally, two of five Northampton middle and high schoolers who use cannabis report that they received it from a cannabis retailer, and over one in four Northampton youth report living within a 10-minute drive of at least six retailers.
Johnson’s presentation also stated that academic research consistently shows that the closer youth and young adults live to outlets that sell alcohol or cannabis products, the more often they will use. Additionally, other local data states that 30-day use rates and edible use rates are higher among students in districts where there are five or more adult-use retailers versus in districts where there are fewer than five retailers.
Others in the cannabis industry, however, disputed these stats. Ezra Parzybok, a consultant on the Euphorium project, disputed Johnson’s statistic about how 12 percent of youth have entered a retail shop, saying it was an “insane” statistic since all shops are heavily surveilled and regulated.
“I understand the perspective of fear … I assume people who are speaking in opposition are not around [cannabis] culture,” said Parzybok at the time. Parzybok is also a social equity applicant in Massachusetts; with over 35 successful state submissions of retail, cultivation, independent testing laboratory and manufacturing licenses, and has been a social advocate for medical cannabis since it became legal in the state a decade ago.
Parzybok argued that a cap would essentially make it easier for corporations to buy host agreements off of smaller cannabis businesses because those host agreements would be more valuable.
“You lock down the number, those who have licenses who aren’t making enough money … all of a sudden somebody says, ‘I’ll give you $1 million for your host agreement,’ great, they’ll sell to one of these corporations,” said Parzybok.
If this were to happen, Parzybok said that all of the local growers and passionate small business owners will lose out, and when that occurs, Parzybok said it would be harder to prevent children from using cannabis because the chain-of-command will be more corporatized and less likely to prevent children from using.
Eventually, Sciarra declined to sign the host agreement for Euphorium, stating at the time that the shop would not be best for “Florence’s future economic vitality.”
However, Sciarra also said she was against the idea of a cap. “While I respect the process underway with the City Council to consider a cap, Northampton has been and should continue to be a city supportive of a well-regulated and equitable cannabis industry that expands our tax base,” she said.
“Artificially constraining the cannabis market is unnecessary at a time when neighboring states – Connecticut, New York, Rhode Island and Vermont – are entering the retail cannabis market, and applications for new Northampton licenses have already waned in the past two years.”
Back in November, the Finance Committee invited Finance Director Charlene Nardi and Amy Cahillane, the Downtown Northampton Association (DNA) executive director, to discuss the financial impact of the cannabis business.
According to Nardi, the total cannabis revenue since 2019 has decreased, mainly because the market is adjusting itself as more businesses in other states come online.
“Our revenue is dropping as the market adjusts itself,” said Nardi, who added that the amount the city budgeting for cannabis dropped 15 percent between 2022 and 2023. “Until it levels out, I’m still projecting downward revenue for this particular source.”
Regarding a cap on dispensaries, Nardi generally felt like this could potentially restrict other new revenue sources, like an on-site social consumption business. “If you needed a different license to consume on–site, I would want to make sure if the city wanted to move forward that a cap would not impact that,” Nardi said.
In addition to those thoughts, Nardi also noted the possibility of turning a cannabis license into an expensive commodity if a cap were instituted. “With a cap, the concern is that … we would be boxing out the smaller businesses,” said Nardi. “We would create a market where we would just have the larger businesses being able to afford them, and the whole point of the state with their laws was to make sure that this was available to those who have already [been] disadvantaged.”
Cahillane, meanwhile, told the committee that the general downtown business district felt the impacts of the cannabis dispensaries more before the period of COVID-19 since that is when the business was first introduced. Specifically, many businesses saw a spike in their sales as a direct result of the cannabis industry.
However, once COVID-19 hit, which caused a change in the country’s financial situation, the impact has not been felt as much.
“No business that I reached out to, or they reached out to me, is feeling a direct impact from the dispensaries,” said Cahillane, who added that she did not speak with every business.
They are, however, seeing an indirect impact from a positive and negative standpoint, according to Cahillane.
“There are certainly plenty of [businesses] who report that they have customers coming in complaining that Northampton is becoming all pot shops,” said Cahillane. “On the other hand, they say a dispensary that fills a vacant storefront is better than a vacant storefront.”
Many businesses, according to Cahillane, are less concerned with the number of cannabis dispensaries, and more concerned with local control over corporate, out-of-state control.
As far as caps go, Cahillane said businesses “were all over the place” when it came to their beliefs. A lot of people felt that a cap is not needed since the market will sort itself out, while others worried that if a cap is instituted, then that could prevent an “exciting new business model” from entering the fold.
The Jan. 19 City Council meeting
These lengthy discussions culminated in a two-hour conversation on Jan. 19 after Legislative Matters sent back the cap proposal with a neutral recommendation. The regulation was originally introduced during the Dec. 15 Council meeting.
According to language in the ordinance, the new cap will not apply to social equity dispensaries, which are participants in a state assistance program for business owners from backgrounds most affected by the war on drugs.
During the debate, many City Councilors in favor of the cap argued that public health officials warned of risks correlated with having a high number of dispensaries in a community, while others argued that a regulation would unfairly alter the market.
Councilor Garrick Perry, who was one of three councilors who opposed the regulation, said that he was not opposed to instituting a cap, but he was “firmly” against the cap that was presented.
“This does not address any of the issues purported to necessitate this ordinance,” said Perry. “What this does, I believe, is set us up for possibly having 12 dispensaries for a while. I think it’s likely to disrupt a market that is still working itself out.”
Much like Parzybok, Perry argued that a cap would increase the value of a host agreement, which means more owners will try to leverage their shops for more money since the market is stalling.
“For me, this feels like a message,” said Perry. “A message to show that we do care about the youth, which is a great message to say. But, I do not think that writing this ordinance is a way.”
Councilors Jim Nash, Marissa Elkins, Perry were the three who opposed the ordinance, while the three who co-sponsored the regulation were Councilors Rachel Maiore, Marianne LaBarge and Karen Foster.
“One of my motivations is to support local businesses,” said Maiore, during the Dec. 15 meeting. “I’ve talked to many of our local cannabis retail owners, and they are very much in favor of a cap.”
Many councilors during that meeting made it clear that this is not a referendum against the general consumption of cannabis.
“There are very valid reasons that people will support or grapple with not supporting this ordinance, but that’s not a matter of the quality of the data we’re looking at,” said Foster. “I understand that there are economic arguments that people have shared against limiting the number of cannabis retail establishments, but … we’re looking at a bunch of competing priorities. Mine is the call from the public health specialists in the community and what they’ve said.”