Lawmakers reach pot compromise

FIRE UP THE SMOKING lamp.

House and Senate negotiators finally reached a compromise on amending the voter-approved law legalizing marijuana in Massachusetts, agreeing to levy a tax of up to 20 percent and approving a different process to implement bans or restrictions based on election results from last November.

“Compromise means you get some of what you want and they get some of what they want,” said Sen. Pat Jehlen, co-chair of the Joint Committee on Marijuana Policy who authored the Senate bill that more closely aligned with last November’s ballot question. “Obviously, I would have preferred to have a lower tax rate to make sure we can eliminate the black market.”

The bill was still being finalized late Monday but officials say it should be taken up by the House on Wednesday and reach a final vote in the Senate no later than Thursday before being sent to Gov. Charlie Baker, nearly three weeks after a self-imposed deadline by lawmakers had passed.

House Majority Leader Ronald Mariano, who led that chamber’s negotiations with a bill that attempted to make more drastic changes to the law than the Senate version, said he was pleased with the final result, including the tax rate which is midway between the 12 percent approved by voters and the 28 percent favored by the House.

Under the bill, in addition to the 6.25 percent sales tax, there will be a 10.75 percent excise tax and a local option tax of up to 3 percent, which would make it among the lowest tax rates in the country of states that have made adult use of marijuana legal. In addition, cities and towns can negotiate a host agreement of up to 3 percent of gross revenues for a total of 6 percent, giving tax-strapped communities pause before considering potential bans.

“Everyone is going to take the local option,” said Mariano. “If you don’t you’re crazy…We wanted to incentivize some towns to take this so we don’t have all the communities that sell it congested in the same area.”

One of the more controversial pieces of the measure is the local control clause. Under the ballot question, any move to ban or restrict recreational marijuana facilities would have to be decided by voters in a community-wide referendum, a measure municipal officials said was expensive and onerous. The House bill would have let local governing bodies such as city councils or boards of selectmen make the decision while the Senate bill retained the language of the ballot question mandating a referendum.

Under the conference committee bill, those communities that voted in favor of Question 4 last November would still have to place any move to ban on the ballot but cities and towns that opposed the ballot question can have the decision made by the governing body.

While neither Jehlen nor Mariano could recall another law that treated cities and towns differently based on the results of a statewide election, they said both the House and Senate counsel signed off on the measure. They also pointed out the clause expires in 2019, when all communities will be required to go to the ballot box if they want to ban retail establishments.

“No one’s explained to me how anyone is harmed by this,” said Mariano. “The towns that voted no continue to let their officials make the decision to enforce their vote; those that voted yes have the [referendum] ballot language. I don’t think it’s a constitutional issue.”

Baker, a former selectman who favored giving governing bodies the decision-making authority, said he had not yet seen the bill but thought the compromise was a fair one.

“Conceptually, that’s not an unreasonable way to go,” he said.

The compromise bill changes the structure of the Cannabis Control Commission, expanding it from three to five members and taking away the sole appointing authority of the state treasurer. The treasurer will appoint the chairman while the governor and the attorney general each appoint one member with the last two being made by a vote of the three constitutional officers.

In addition, the bill retains the House language that makes all five members paid, with the chair receiving a $161,000 salary – pegged to the pay of the secretary of administration and finance – while the other members get three-fourths of that, about $121,000 a year.

The final bill also eliminates the Senate’s preference for expunging records of people convicted of marijuana offenses but it does allow those records to be sealed and gives those convicted of pot-related crimes clearance to work in the industry. Representatives of minority communities had urged language be included to address the criminal justice issues because of the disparate effect of enforcement on communities of color.

The bill will also give medical marijuana dispensary operators a shorter head-start to enter into the retail market. Under the ballot question, those with medical marijuana licenses had as much as a year before other applicants were allowed in. Now, however, they have, at most, a two-week window and the waiting period for other applicants has been eliminated.

Mariano pointed to a provision regarding advertising that he said was unique in the country. The measure prohibits advertising in media outlets unless it can be shown that more than 15 percent of the audience is older than 21.

While both Jehlen and Mariano said all the deadlines will be hit and the law is on track to allow the industry to launch next July 1, they split on whether there are sufficient funds to get the process moving. The recently passed budget contains $2 million for start-up costs and while Jehlen said that’s enough to begin the process, she acknowledged there will need to be more money for “seed to sale tracking” and implementing rules and regulations.

Mariano said not only will the commission have the $2 million, members can also begin setting and collecting application and permitting fees and using those funds for operations.

“People are going to have to pay to get into the marketplace,” he said. “People will have to pay the fee before we give them the license.”

A spokesman for the pro-pot campaign last fall said while advocates didn’t get all that voters approved, the compromise measure is by far preferable to what the House had proposed.

“The compromise alters the approach on taxes and local control contained in Question 4, but it falls far short of the onerous House language, which would have added untold difficulties to establishing an effective regulatory system,” Jim Borghesani said in an emailed statement. “We urge the governor to sign the bill when it reaches his desk, and we urge him, the House and the Senate to ensure adequate funding to move the regulatory system forward.”