Section 500.180 - Host Community Agreement Requirements for License Applicants, Marijuana Establishments, and Host Communities(1)935 CMR 500.180 is governed by M.G.L. c. 94G § 3 (d)(1)-(5), as amended by St. 2022, c. 180 which went into effect on November 9, 2022. Pursuant to M.G.L. c. 94G § 4(a), the Commission is authorized to review, regulate, enforce, and approve HCAs and to develop a Model Host Community Agreement.(2)General Requirements for Host Community Agreements. The Commission shall review and approve each HCA as part of a completed License application and at each License renewal. The parties to an HCA relative to an application for licensure are a License Applicant and a Host Community. The parties to an HCA relative to an application for renewal of licensure are a Host Community and a Marijuana Establishment. (a) A License Applicant seeking a new License to operate a Marijuana Establishment or MTC shall negotiate and execute a compliant HCA with a Host Community, unless a compliant HCA Waiver has been submitted pursuant to 935 CMR 500.180(5). A compliant HCA or compliant HCA Waiver must be submitted in order for a License application to be deemed complete pursuant to 935 CMR 500.102.(b) A Marijuana Establishment seeking renewal of a License to continue to operate in a Host Community shall have an HCA that complies with 935 CMR 500.180 unless a compliant HCA Waiver has been submitted pursuant to 935 CMR 500.180(5).(c) An HCA submitted by a License Applicant or Marijuana Establishment which is determined to conform with the Model Host Community Agreement will be presumed compliant for purposes of this section.(d) A Host Community shall negotiate the terms of an HCA in good faith.(e) Each of the parties shall ensure that HCAs satisfy the following minimum acceptable requirements: 1. The parties shall ensure that references in an HCA to a License Applicant or Marijuana Establishment are consistent with both the business entity name certified and recorded with the Secretary of the Commonwealth and the business entity name stated either in a License Applicant's license application or on a Marijuana Establishment's license record as maintained by the Commission.2. The parties shall ensure that HCAs set forth all of a Host Community's conditions for allowing a Marijuana Establishment or a License Applicant to operate in the community. A Host Community may not contract for any purpose, on any terms, or under any conditions inconsistent with any applicable provision of Massachusetts General Laws. No Host Community may impose an unreasonable condition or a term that is Unreasonably Impracticable in an HCA. A condition may be presumed reasonable if: a. The condition is required under a Host Community's local rules, regulations, ordinances, or bylaws;b. The condition has been deemed necessary to ensure public safety and proposed by the chief law enforcement authority and/or fire protection chief in a Host Community with explanation and detail why the condition is necessary for public safety.c. The condition has been deemed necessary to ensure public health and proposed by the chief public health authority in a Host Community with explanation and detail why the condition is necessary for public health.d. The condition is a local requirement customarily imposed by a Host Community on other, non-cannabis businesses operating in the community;e. The condition is required by law;f. The condition does not conflict with other laws; or g. The condition is otherwise deemed reasonable by the Commission based on particular circumstances presented by an HCA or contracting parties.3. The parties shall ensure that HCAs include a statement of all stipulated responsibilities between a Host Community and a License Applicant or between a Host Community and a Marijuana Establishment including, but not limited to, the following: a. A provision requiring a Host Community to annually transmit its invoice of claimed impact fees to a Marijuana Establishment within one month of the anniversary of the date a Marijuana Establishment received final licensure;b. A provision explicitly identifying any generally occurring fees to be charged by a Host Community. Generally occurring fees are customarily imposed on other non-cannabis businesses operating in a Host Community and shall not be considered a CIF (e.g., routine water, property tax, sewer, trash pickup etc.).4. The parties shall ensure that HCAs include the following information:a. The specific Marijuana Establishment license operations permitted under the terms of the HCA;b. The name, signature, and title of the individual(s) authorized to enter into HCAs on behalf of a Host Community as a contracting authority;c. The name, signature, and title of the individual(s) authorized to enter into HCAs on behalf of a License Applicant or a Marijuana Establishment as an authorized representative;d. The date(s) of execution by both parties;e. The effective date of an HCA; andf. The duration of an HCA.5. The parties shall ensure that HCAs provide clear, specific terms regarding a Host Community's assessment of a CIF if applicable, including, but not limited to, a provision requiring a Host Community to transmit its invoice of claimed impact fees to a Marijuana Establishment within one month of the anniversary of a Marijuana Establishment's final license date.(f) The parties may include a clause in an HCA whereby the parties voluntarily agree to bring HCA disputes before a private mediator retained by the parties. Neither party may unilaterally compel private mediation.(g) Approval of HCAs may be conditioned on a Host Community being in good compliance standing with the Commission relative to any HCA to which the Host Community is a contracting party.(h) The Commission may deem a provision of an HCA invalid, and therefore unenforceable, based on a finding that the provision violates M.G.L. c. 94G, 935 CMR 500.000 or 935 CMR 501.000: Medical Use of Marijuana. The Commission may also declare an HCA or a provision of an HCA voidable upon deeming the HCA as a contract of adhesion.(i) The Commission may decline to approve an HCA on the basis of any other ground that serves the purposes of M.G.L. c. 94G, 935 CMR 500.000, or 935 CMR 501.000: Medical Use of Marijuana.(j) A Marijuana Establishment that seeks a name change pursuant to 935 CMR 500.104(1) after execution of an HCA must provide notice of the change to the Host Community in a form and manner determined by the Commission. A Marijuana Establishment that seeks a location change to another Host Community shall submit a new HCA to the Commission. A Marijuana Establishment that seeks a location change within the same Host Community after execution of an HCA may be required to provide an amended HCA to the Commission. A Marijuana Establishment that submits a Change of Ownership request for the transfer of a license may be required to submit a new or amended HCA to the Commission.(k)Prohibitions. 1. No License Applicant, Marijuana Establishment, or Host Community shall enter into an HCA that includes a promise to make a future monetary payment, in-kind contribution, or charitable contribution. A License Applicant or Marijuana Establishment may voluntarily provide organizations with monetary payments, in-kind contributions and charitable contributions after executing an HCA, as long as a License Applicant or Marijuana Establishment's actions are not performed because of a condition imposed by a Host Community, whether explicitly or implicitly.2. A contractual financial obligation, other than a CIF, that is explicitly or implicitly a factor considered in or included as a condition of an HCA is unenforceable, subject to the following exceptions: a. References in an HCA to a Marijuana Establishment's obligations to pay any fees associated with sales tax, excise tax on Marijuana and Marijuana Products, optional local tax, or as otherwise provided in M.G.L. c. 94G, M.G.L. c. 64H, and M.G.L. c. 64N.b. References in an HCA to a Marijuana Establishment's obligations to pay a Host Community for generally occurring fees associated with operating in a Host Community (e.g., water, sewer, property tax, etc.).3. No Host Community may mandate or otherwise require that the CIF be a certain percentage of a Marijuana Establishment's total or gross sales as a term or condition of an HCA.4. A Host Community shall not demand a CIF exceeding 3% of the gross sales of a Marijuana Establishment as a term or condition of an HCA.5. No License Applicant, Marijuana Establishment, or Host Community will use Inducements to negotiate or execute an HCA. No municipality or Host Community shall negotiate or renegotiate an HCA through the use of undue influence, duress, coercion, intimidation, threats, or any strong-arm tactics including by threat of dissolution of the HCA.6. No Host Community may rely on other written instruments, contracts, or agreements to impose terms or conditions on a License Applicant, Marijuana Establishment, or Medical Marijuana Treatment Center outside of an HCA.(l) The following terms, conditions, or clauses are prohibited in an HCA:1. A provision that discourages any party from bringing a civil cause of action or other legal challenge relative to an HCA or to an individual term or provision of an HCA;2. A provision that requires a License Applicant or Marijuana Establishment to make upfront payments as a condition for operating in the Host Community;3. A provision that affords a Host Community sole and absolute discretion on how a Host Community will spend a CIF;4. A provision waiving a Marijuana Establishment's ability to dispute whether impact fees claimed by a Host Community are Reasonably Related and properly due and payable as a CIF;5. A provision that categorically deems a Host Community's claimed impact fees to be reasonably related or that otherwise excuse a Host Community from calculating impact fees based on the actual operations of a Marijuana Establishment;6. A provision that imposes legal, overtime, or administrative costs or any costs other than a CIF on a Marijuana Establishment with the exception of a Marijuana Establishment's tax obligations or its responsibility for paying routine, generally occurring municipal fees;7. A provision that obligates a Marijuana Establishment to set aside money in an escrow, bond, or other similar account for a Host Community's use or purposes;8. A provision that requires a Marijuana Establishment to make any additional payments or obligations including but not limited to monetary payments, in-kind contributions, providing staffing, advance payments, or charitable contributions by a Marijuana Establishment to a Host Community or any other organization.9. A provision including or otherwise deeming good faith estimates, unquantifiable costs, generalized expenses, or pro-rated expenses as a CIF.(3)Review and Certification of Host Community Agreements. The Commission, through its Executive Director or the director's delegee, shall review an HCA submitted by a License Applicant or a Marijuana Establishment and make a determination certifying whether the HCA, in whole or in part, satisfies Commission requirements. (a) The Commission shall complete its review of an HCA within 90 days of receiving an HCA from a Marijuana Establishment. The Commission may request additional information or send a determination notice identifying deficiencies in an HCA. Submission of an amended HCA resets the 90-day period of Commission review.(b)Review of HCAs Submitted by License Applicants.1. All applications for initial licensure submitted on or after March 1, 2024, must include an HCA that complies with 935 CMR 500.000 or a compliant HCA Waiver.2. The Commission may request additional information from a License Applicant or a Host Community in connection with its review.3. The Commission shall send a notice of its HCA determination to both a License Applicant and a Host Community within 90 days of receipt of an HCA.4. If the Commission determines that a License Applicant's HCA does not comply with 935 CMR 500.180, then the HCA determination notice shall state the following: a. The factual basis for the Commission's finding of noncompliance, including identification of the noncompliant term(s), condition(s), or provision(s) of the HCA, if applicable;b. The parties' option to correct the noncompliance and submit an amended HCA; andc. The parties' option to submit an HCA Waiver that complies with 935 CMR 500.180(5); and5. Failure to submit a compliant HCA or a compliant HCA Waiver with an application for licensure may result in an application remaining incomplete pursuant to 935 CMR 500.102.(c)Review of HCAs submitted by a Marijuana Establishment1. All renewal applications submitted on or after March 1, 2024, must include an HCA that complies with 935 CMR 500.000 or a compliant HCA Waiver.2. The Commission may request additional information from a Marijuana Establishment or a Host Community in connection with its review.3. The Commission shall send a notice of its HCA determination to both a Marijuana Establishment and a Host Community within 90 days of receipt of the HCA. The determination notice shall identify whether the HCA, in whole or in part, complies with 935 CMR 500.180.4. If the Commission determines that a Marijuana Establishment's HCA does not comply with 935 CMR 500.180, then the HCA determination notice shall provide the following: a. The factual basis for the Commission's finding of noncompliance, including identification of the noncompliant term(s), condition(s), or provision(s) of the HCA, if applicable;b. The parties' option to correct the noncompliance and submit an amended HCA;c. The parties' option to submit an HCA Waiver that complies with 935 CMR 500.180(5); andd. The parties' option to proceed under an executed HCA that conforms with the Commission's Model Host Community Agreement, to be relied on in the interim until the parties come to an agreement;5. A Host Community shall notify a Marijuana Establishment if it no longer intends to continue as a Host Community for a Marijuana Establishment. A Host Community shall not discontinue relations with a Marijuana Establishment in bad faith. On receipt of a notice of discontinuance from a Host Community, the Marijuana Establishment shall notify the Commission. On receipt of a notice of discontinuance, an ME may submit a request for equitable relief to the Commission consistent with 935 CMR 500.180(3)(c)6.6. If a Host Community discontinues relations with an ME, or on submission of a mutual abrogation agreement executed by both a Host Community and an ME, an ME may submit a request for equitable relief to the Commission.a. A Marijuana Establishment's request for equitable relief must identify facts, information, and any documentation to support why a Marijuana Establishment should be considered for equitable remedies. A Marijuana Establishment shall ensure that the request for equitable relief includes a Host Community's notice under 935 CMR 500.180(3)(c)4.d.b. Commission Staff will conduct a paper review of the petition and make a recommendation to the Commission.c. The Commission may exercise its discretion whether to grant one or more of the following equitable remedies to a Marijuana Establishment: i. Extension of a License expiration date without incurring additional prorated fees;ii. Waiver of a Change of Location fee;iii. institution of procedures for winding down an ME's operations at the licensed Premises;iv. Other equitable relief as determined by the Commission.d. If the Commission grants or denies equitable relief to a Marijuana Establishment, the agency will provide notice of its decision to a Marijuana Establishment and a Host Community. A Host Community or a Marijuana Establishment may seek relief from a court of competent jurisdiction.7. Failure to submit a compliant HCA or compliant HCA Waiver may constitute grounds for denial of a renewal application.8. Any action subsequently taken to deny a Marijuana Establishment's renewal application due to failure to produce a compliant HCA or a compliant HCA Waiver shall afford Marijuana Establishments a right to hearing pursuant to 935 CMR 500.500. a. If a Marijuana Establishment elects a hearing pursuant to 935 CMR 500.500, the administrative proceeding must be conducted pursuant to 801 CMR 1.01, Formal Rules.b. A Host Community may seek intervention as a party to the hearing. (d)Complaints Alleging Noncompliance with 935 CMR 500.180. 1. Consistent with its power to enforce HCAs, the Commission may, at its discretion, investigate any complaint alleging noncompliance with the requirements in 935 CMR 500.180(3)(d) and take enforcement action as provided in 935 CMR 500.000.2. An interested person may file a complaint with the Commission alleging noncompliance with an HCA requirement under 935 CMR 500.180. Nothing in 935 CMR 500.180(3)(d)2. shall be construed to prevent a Marijuana Establishment or a Host Community from bringing a private breach of contract action in a court of competent jurisdiction regarding an alleged breach of specific promises mutually agreed to in the parties' HCA.3. If the Commission substantiates an allegation of noncompliance with HCA regulatory requirements, then the Commission may take administrative or enforcement action against a Licensee or a Host Community including sending a notice of deficiency, requesting additional information, or otherwise taking action as provided under 935 CMR 500.000.4. Failure by a Host Community to correct the noncompliant conduct may result in one or more of the following: a. Issuance of sanctions pursuant to 935 CMR 500.360;b. Loss of a Host Community's good compliance standing for purposes of 935 CMR 500.180(2)(e);c. Identification of a Host Community lack of good compliance standing in a form and manner determined by the Commission; ord. Abstaining from consideration of any new license applications affiliated with a Host Community until a Host Community's good compliance standing is restored.(4)Community Impact Fees. (a) General Requirements. Pursuant to M.G.L. c. 94G, § 4(a½), the Commission is charged with establishing criteria for reviewing, certifying, and approving CIFs. 1. To qualify as a CIF, an impact fee claimed by a Host Community must be Reasonably Related.2. On certification by the Commission, a CIF becomes properly due and payable unless disputed by a Marijuana Establishment consistent with 935 CMR 500.180(4)(c)4.a.3. A Host Community may assess a CIF as a condition of allowing a License Applicant or a Marijuana Establishment to operate or continue to operate in its community. A Host Community may also opt not to assess a CIF.4. A Host Community may also opt not to assess a CIF.5. A Host Community shall ensure that the initial invoice period of claimed impact fees covers a one-year period that starts from the date the Commission grants a Marijuana Establishment a final license. A Host Community shall further ensure that all subsequent, one-year invoice periods are consistent with the anniversary of a Marijuana Establishment's final license date. The Commission will not certify any impact fees attributable to dates outside of the applicable invoice period.6. A Host Community seeking to assess a CIF shall transmit an itemized invoice to a Marijuana Establishment in a form and manner determined by the Commission documenting claimed impact fees arising from the preceding year of a Marijuana Establishment's operations. a.Sunshine Requirement: A Host Community shall ensure that impact fee invoices include a specific description of how the claimed impact fees were spent, including each line item for each good or service charged stating its cost, purpose, and relation to a Marijuana Establishment's operations.b. A Host Community shall transmit its impact fee invoice to a Marijuana Establishment no later than one month after the anniversary of the date the Marijuana Establishment received a final license from the Commission. A Host Community's failure to transmit the impact fee invoice to a Marijuana Establishment within the prescribed time shall result in a forfeiture of any CIF for the applicable year of operations.c. A Host Community shall ensure that the impact fee invoice is restricted to the license number(s) operating from the licensed Premises alleged to have impacted the community. For CMOs, a Host Community shall transmit an impact fee invoice to a Marijuana Establishment and an MTC.7. Within 30 calendar days of receiving a Host Community's invoice of claimed impact fees, a Marijuana Establishment shall submit the invoice and any supporting documentation, if applicable, to the Commission in a form and manner determined by the Commission.8. A Marijuana Establishment that has agreed to pay a CIF under its HCA shall annually pay any undisputed CIF no later than the end of the current fiscal year or within 90 days of the date of the Commission's CIF certification, whichever is later. This subdivision shall not be construed to require a Marijuana Establishment to pay a CIF if a Marijuana Establishment's payment obligation is the subject of a nonfrivolous legal dispute either through the Commission's administrative hearing process or before a court of competent jurisdiction.(b)Prohibited Practices.1. A Host Community shall not attempt to collect impact fees relating to any operations occurring prior to the date a Marijuana Establishment is granted a final license by the Commission.2. A Host Community shall not attempt to collect impact fees from any Marijuana Establishment that has held a final license for more than nine years.3. In circumstances where the licensed Premises is the site of multiple final licenses, no Host Community may amplify its assessment of claimed impact fee(s) by assigning the same impact fee(s) to each final license operating from the licensed Premises without regard to the distinct operations of each licensed entity.4. No Host Community may rely on other written instruments, contracts, or agreements to assess Community Impact Fees. No Host Community may include additional payments or obligations in its invoice of claimed impact fees, including but not limited to monetary payments, in-kind contributions and charitable contributions by a Marijuana Establishment to a Host Community or any other organization.5. A Host Community shall not include any legal costs incurred by a Host Community to defend against a lawsuit brought by a Marijuana Establishment in its invoice of claimed impact fees.6. No Host Community may modify the effective date of a preexisting CIF for any final license that becomes subject to an ownership or control change under 935 CMR 500.104(1).(c)Commission Review and Certification of CIFs. The Commission, through its Executive Director or Executive Director's delegee(s) shall review a Host Community's invoice of claimed impact fees and make a determination certifying, in whole or in part, the CIF that may be assessed for the preceding year of a Marijuana Establishment's operations based on a finding that an impact fee(s) is Reasonably Related to a Marijuana Establishment's operations. 1. A Marijuana Establishment shall provide verification of its Gross Annual Sales, including wholesale revenue generated by Marijuana Cultivators and Marijuana Product Manufacturers, to the Commission with its transmission of a Host Community's invoice of claimed impact fees. a. A Marijuana Establishment shall submit a summary of all sales of Marijuana, Marijuana Products, Marijuana Accessories and Marijuana Establishment Branded Goods for that license to consumers and other Licensees, as applicable.b. If product was wholesaled or otherwise sold or transferred to other Licensees at no cost or reduced cost, a Marijuana Establishment shall apply the average cost per gram or milligram to the amount sold or transferred to establish and report the fair market value of the product, and include that amount in its summary submission.2. The Commission may make a final determination on Gross Annual Sales relying on the factors in 935 CMR 500.180(4)(c)3., and any additional information gathered. The Gross Annual Sales determined by the Commission, pursuant to 935 CMR 500.180(4)(c)3., shall be used for purposes of the CIF in circumstances where product was wholesaled or otherwise sold or transferred to other Licensees at no cost or reduced cost, and shall not be used for any other purposes related to other obligations, including tax filings, for a Marijuana Establishment.3. The Commission may determine the Gross Annual Sales of a Marijuana Establishment using the following factors: a. Consumer Sales as represented by a Marijuana Establishment;b. Consumer Sales as represented by the Commission Seed-to-sale System of Record;c. Fair Market Value of wholesaled or transferred Marijuana, Marijuana Products, Marijuana Accessories and Marijuana Establishment Branded Goods;d. Any wholesaled or transferred Marijuana, Marijuana Products, Marijuana Accessories and Marijuana Establishment Branded Goods that has been refunded or is otherwise the subject of a voided sale;e. Value of services rendered, wholesaled or transferred Marijuana, Marijuana Products, Marijuana Accessories and Marijuana Establishment Branded Goods as represented by the Commission Seed-to-sale System of Record; andf. Other factors as determined necessary by the Commission to calculate the Gross Annual Sales by the licensee in the absence of available information as listed in 935 CMR 500.180(4)(c).4. The Commission shall provide notice of its CIF determination to a Marijuana Establishment and a Host Community. The Commission's notice will provide a Marijuana Establishment with the following options:a. A Marijuana Establishment may request an administrative hearing before an independent Hearing Officer of the Commission pursuant to 935 CMR 500.500 to challenge the findings of fact and conclusions of law. Any administrative proceeding elected by a Marijuana Establishment must be conducted pursuant to 801 CMR 1.01: Formal Rules. The Host Community may seek intervention as a party to the hearing; orb. A Licensee may seek court intervention to independently review a Host Community's claimed impact fees by bringing a breach of contract action against a Host Community in a court of competent jurisdiction.5. The parties may elect to bring a dispute between the parties before a private mediator retained by the parties at any time if such mediation is a term of the HCA or is voluntarily elected by the parties. Neither party may unilaterally compel private mediation.6. After a CIF dispute has resolved, a Marijuana Establishment must provide proof of payment of the certified CIF with its renewal application. If an ME prevails in a CIF dispute, an ME must also provide proof that its CIF payment obligation has been eliminated.(5)Waiver of Host Community Agreements. (a) A Host Community may waive the regulatory requirement to have a compliant HCA by submitting an HCA Waiver to the Commission that complies with 935 CMR 500.180(5).(b) An HCA Waiver constitutes a total relinquishment of the requirement that an applicant or Marijuana Establishment enter into an HCA with a Host Community. No party to an HCA may use an HCA Waiver to waive individual provisions of an HCA.(c) An HCA Waiver may be submitted relative to an application for licensure or an application for renewal of licensure. A Host Community and an applicant or Marijuana Establishment may also submit an HCA Waiver after both parties have executed an HCA.(d) Acceptance of an HCA Waiver is limited to the specific application or license number(s) stated in the HCA Waiver request.(e) The Commission shall determine whether an HCA Waiver complies with 935 CMR 500.180(5).(f) An HCA Waiver that sets an expiration date or any conditions is deemed noncompliant.(g) An HCA Waiver determined to be the result of an Inducement is deemed noncompliant.(h) If a Host Community elects to submit an HCA Waiver, a Host Community's submission shall be in a form and manner determined by the Commission and include, at minimum, the following information:1. Identification of the specific application or license number intended to be exempt from the requirement to have a compliant HCA;2. Identification of a License Applicant or Marijuana Establishment in a manner consistent with both the business entity name certified and recorded with the Secretary of the Commonwealth of Massachusetts and the business entity name stated either in a License Applicant's license application or on a Marijuana Establishment's license record as maintained by the Commission.3. Printed name and signature of the individual(s) authorized to represent and act on behalf of a Host Community;4. Printed name and signature of the individual(s) authorized to represent and act on behalf of an applicant or Marijuana Establishment;5. The date of each parties' signature; and6. An attestation that the HCA Waiver was mutually agreed upon by both parties and executed in good faith.(i) An HCA Waiver that is executed and recorded with the Commission remains in full force and effect until such time as it is rescinded. An HCA Waiver may only be rescinded on Commission approval of an HCA subsequently executed and submitted by the parties.(j) An HCA waiver is not subject to review under the criteria in 935 CMR 500.850 regarding general waivers.Adopted by Mass Register Issue 1507, eff. 10/27/2023.