HOUSE LEADERS ABRUPTLY walked away from an agreement between Gov. Charlie Baker, Speaker Robert DeLeo, and Senate President Stan Rosenberg that would have kept oversight of the emerging legal pot industry with the state treasurer and sources indicated it may be connected to anger from the House chair of the marijuana committee over a potential move of the Lottery from his hometown in Braintree.
Several people who have sat in meetings of the Legislature’s Joint Committee on Marijuana Policy, who requested anonymity, said at the very first meeting Rep. Mark Cusack angrily denounced Treasurer Deborah Goldberg, whose office oversees the Lottery, because of a decision by the Lottery Commission to seek proposals on a potential move out of Braintree as the lease for its South Shore headquarters was set to expire.
“He was very upset with the Lottery moving jobs out of his district,” said one official, who was one of several who confirmed the outburst. “When I heard him say that, I was really stunned. It had no connection with what [the committee] was doing.”
No decision had been made and, in fact, Goldberg has indicated part or all of the operations could remain in the town where the Lottery has been located for more than 40 years.
According to several officials familiar with the negotiations, an agreement was reached between the three state leaders to expand the Cannabis Control Commission to five members, giving Goldberg three appointments and the governor and attorney general one each. But shortly after, negotiations ceased and the House came out with its own version of a bill on Wednesday that caught Senate members of the committee off-guard.
The House bill, which was since pulled back by DeLeo and is being reworked, was viewed as a draconian measure that stripped Goldberg of oversight by limiting her to one appointment to the commission and making the two additional appointments a consensus among the three constitutional officers. The House bill would also jack up taxes more than twice what voters intended.
Officials say there’s no direct evidence that the House bill that initially emerged was related to Cusack’s anger over the Lottery, but the about-face from the agreement occurred right after the agreement on the make-up of the cannabis commission was in place.
“Two weeks ago there was consensus about a five-person cannabis commission,” said one official. “Then, there was a major disconnect. We were on track to do a consensus, then the House pulled back, radio silence. Then they came out with that bill that was so badly written.”
Cusack has not returned several calls for comment, but in interviews with other outlets he indicated he and his staff were working to rewrite the measure and clean up some problematic language that included ambiguous text that could have hiked the tax to as high as 55 percent from seed to sale.
A spokesman for DeLeo did not respond to a request for comment. A spokeswoman for Baker did not address the question about the agreement but said he’s holding to the deadline for a bill to be on his desk in order for the law to launch next summer.
“The administration will carefully review any legislation reaching the governor’s desk and will continue to work closely with lawmakers, educators, and public safety and public health professionals on the law’s implementation to ensure the transition protects the interests of our communities and families, while adhering to the will of the voters,” Elizabeth Guyton said in an email. “The administration believes the legislature’s stated June deadline is critical to allowing enough time to prepare and launch an entirely new industry for distributing controlled substances.”
Sen. Patricia Jehlen, the Senate chair of the Legislature’s marijuana committee, said in a meeting with reporters Friday that the committee was “on track until two weeks ago” to reach a consensus bill, but she declined to say where it went off the rails.
“I don’t want to talk about it,” she said.
A spokeswoman for Goldberg said the office has had little contact with members of the marijuana committee and said she was unaware of any agreement that had been struck prior to the House bill, which Goldberg said is not what voters intended. The spokeswoman said Goldberg is a little more hopeful with the Senate proposal.
“This is a better starting point but there are still questions that remain. We hope to be a part of the conversation moving forward in the next few weeks,” spokeswoman Chandra Allard said in a statement.
Even as the House worked to draft a new bill and have it ready by the beginning of the week, Jehlen unveiled an outline of a bill that more closely hews to the voter-approved referendum on taxes and governance and sets the stage for a showdown with the House overhaul.
Jehlen’s proposal would keep the top tax rate at 12 percent on retail sales – 3.75 percent excise tax and a 2 percent local option tax on top of the state’s 6.25 percent sales tax. The House bill would levy a 28 percent tax, including 16.75 percent excise tax and a 5 percent tax for cities and towns plus the sales tax.
Jehlen said keeping the tax low is a key to eradicating the black market and said she would be opposed to raising it higher, though she conceded some of her Senate colleagues may want to raise it slightly.
“The illegal market thrives if there are high taxes and low access,” Jehlen said in a meeting with reporters in Rosenberg’s office Friday. “Think about it: Even at six-and-a-quarter percent, people are passing up sales on dishwashers now and are waiting for a sales tax holiday to buy appliances. Price differential matters. People are driving to New Hampshire to save [the sales tax.] You think they will walk past the neighborhood dealer they have been buying from for years? If the price differential is 28 percent, think about what the people you know would do. My motto is: start low, go slow.”
In addition to the tax rate, Jehlen’s plan would also have a five-member board with two members selected by consensus, but the treasurer would appoint the commission chair, the only full-time member of the panel. In addition, budget and administrative oversight would remain under the treasurer’s office, while the House bill would make it an independent commission.
The Senate proposal, which is still not in bill form, would keep the referendum’s clause that leaves it to voters in communities to approve an opt-out prohibiting retail outlets, contrary to the House bill which would let local governing bodies — city councils or boards of selectmen — decide on a ban. Jehlen’s plan would also have a mechanism for voters to reverse bans already in place.
Jehlen said the Senate also wants to make it easier for those who have been convicted of marijuana offenses to have their records sealed and be able to work in the industry. She said that was especially important in minority communities where there are a disproportionate number of people who have been arrested for pot-related offenses.
Both the House and Senate would move oversight of medical marijuana under the same regulatory umbrella as recreational pot, but the Senate would ease it in over the next 18 months.
Jehlen said she expects the House bill to come over to the Senate sometime next week and then the Senate will make its changes and vote in seven to 10 days, leaving about four days for a conference committee to hammer out the differences before the June 30 deadline.
One Senate member of the committee said he would support a bill with minimal changes to what voters approved.
“I think it is extremely important for the Senate to propose a bill that hews very closely to the referendum,” said Sen. James Eldridge, who called the House bill “deeply flawed.”
“As a Senate member of the committee, I think at most it really would just be some tweaks around the referendum that would be needed,” he said.
Proponents of the referendum that legalized pot were cautiously optimistic about the Senate proposal.
“We’ll reserve our overall judgment until we see the final bill, but we are encouraged by the far more transparent and collegial approach the Senate is taking,” Jim Borghesani, a spokesman for last fall’s referendum campaign, wrote in an email. “On taxes, local control and social justice, the Senate gets it right… We hope that the universal scorn directed at their process and bill this week will convince House leaders that the Senate approach is the right path forward.”