Date: 5/31/2023
SOUTHWICK — Town Meeting voters on May 16 approved two major initiatives, one amending the town’s general bylaws to allow recreational marijuana dispensaries to open in town, and another that will establish and implement a plan that can lower residents’ electric bills.
While residents will probably see a drop in their electricity rates within a year, potential revenues from taxes generated from the sale of recreational cannabis are at least a year away or longer, said Select Board member Jason Perron.
“My goal is to make it a complete win for the residents,” Perron said about the article voters approved to establish and implement what is called a municipal aggregation plan. About the wait for cannabis revenues, he said, “I’m hoping we can gain the benefit sooner rather than later.”
The primary reason the municipal aggregation plan will take months to implement is the large number of steps the town must take before the program is up and running. The first step is selecting an energy consultant that will guide the town through the implementation steps, which typically starts with the town asking for requests for proposals from interested energy consultants.
“We would want to reach out to all of them and give them an opportunity” to compete for the contract, Perron said.
In some towns that have adopted energy aggregation, like Auburn in central Massachusetts, the Select Board appointed a committee to vet the consultants who applied for the contract and then return with its recommendations to the board. In other towns, the Select Board issued a request for proposals and vetted the consultants itself.
Select Board member Doug Moglin said the town has been contracting with an energy consultant for several projects over the past few years, and said using its services might be an option.
There is an alternative to contracting with a consultant. The town of Grafton developed and implemented its own plan.
Once the consultant is chosen, it will, with the town’s assistance, shepherd the process from beginning to end.
The first step, according to an outline of the process prepared for Perron, is to develop the aggregation plan. The chosen consultant will then propose what is called the “standard” plan, which, according to the state’s Department of Energy Resources, is the electricity rate that all customers will be automatically enrolled in once the aggregation plan is implemented but will also have options that can include buying electricity generated by renewable resources like wind, water or solar.
Rates for electricity generated by renewables are higher. Perron said the current “standard” rate is 13.79 cents per kilowatt-hour. The green rate is 14.47 cents per kilowatt-hour.
Once the “standard” rate has been presented to the Select Board there is a 30-day comment period before it approves it, according to an outline of the steps Perron is using to help guide him and the town.
With the standard rate established, the town will submit documentation to the Department of Energy Resources and the Department of Public Utilities for the state permits needed to implement the plan. With state permits in hand, the town and consultant will then request bids from electricity suppliers. The supplier is chosen by the Select Board.
After that, town electricity customers are supplied with information to help them decide which rate plan to use.
To finance the program, one-tenth of one cent of each dollar spent on a customer’s electricity bill is used. That would mean, for example, for a customer bill of $100, $1 of the bill would be used to finance the program, Perron said.
Marijuana sales
While the aggregation program will probably be implemented in less than a year, it will take much longer before the town hosts a recreational marijuana retailer — and can begin collecting the 3% tax on marijuana sales.
Although voters amended the town’s general bylaws to allow recreational cannabis retailers, they did not update the zoning bylaw, which continues to prohibit non-medical marijuana retailers in all zones. Zoning changes require a two-thirds majority vote at a Town Meeting.
Perron said he will request a Special Town Meeting for this purpose sometime in December, which is traditionally when the town convenes the legislative body.
Before that happens, the Planning Board must create the language to amend the bylaw, which could be simple as changing “prohibit” to “allow.” The proposal will have to go before at least one public hearing before the Planning Board refers the request to the Select Board, which must then vote to place it on a Town Meeting warrant.
Perron also hopes that during the Planning Board process, the town can adjust the boundaries of the marijuana overlay zoning district adopted in 2018. The current overlay allows cannabis-related businesses in a large area east of College Highway and north of downtown, including along Tannery Road as far as Silvergrass Lane, both sides of Sam West Road and most of Hudson Drive. Part of this district extends along the Southwick Rail Trail as far as the Westfield city line.
Another large area open to marijuana facilities runs east of College Highway, south of Congamond Road and west of Miller Road. There is also a relatively smaller marijuana business zone along both sides of Industrial Drive.
To permit a recreational cannabis store, the Select Board would also have to negotiate a host agreement, which must also be approved by the state’s Cannabis Control Commission and would include a community impact fee to be paid by the business, according to a sample available on the Massachusetts Municipal Association’s website.
That annual fee is intended to offset any expenses the town might incur, like infrastructure wear and tear, law enforcement, fire protection, inspectional services, and any unforeseen effects on the town created by the dispensary, according to the MMA website. Such fees are typically equal to 3% of the shop’s gross sales, according to the MMA website.
The town can also include in the host agreement that a dispensary must pay in addition to the 3% excise tax up to an additional 3%. If the Select Board decides to include the additional tax in the host agreement, it must be approved at a Town Meeting.