History Made in MA Cannabis: First HCA Approved Without a Location
On September 17, 2019, the Maynard Board of Selectmen granted NewCann Group LLC a host community agreement (“HCA”) for an adult-use retail establishment. That fact isn’t in of itself newsworthy, but as explained in more detail below, it could set a valuable precedent for the Massachusetts cannabis industry.
As a refresher and for those that don’t follow the Massachusetts cannabis industry, an HCA is a statutorily required contract between a would-be licensee and the host municipality. An aspiring cannabis business needs this contract in order to be eligible to apply for licensure from the Massachusetts Cannabis Control Commission. This dynamic, where the applicant needs an HCA and a municipality doesn’t need any particular applicant, has lead to take-it-or-leave-it deals where applicants are forced to accede to demands a municipality imposes above and beyond the statutory limit of 3% of gross revenues.
NewCann’s HCA was the first in Massachusetts to be awarded by a municipality without requiring a property address, and instead affords the applicant 6 months to identify and present a target property. Maynard’s Board of Selectmen will then get to tell the applicant if that property is permissible within their town, which is actually an additional layer of local control. This is a monumental shift in power away from landlords and toward anyone without boatloads of cash to spend on a space that might not pass muster at the municipal level.
The answer on whether a given property is suitable for a particular town now comes without the need to pay exorbitant rents or hold fees to a landlord. This precedent, if adopted more broadly in Massachusetts, will lower the barriers of entry for Economic Empowerment Priority Certificate holders, Social Equity Training Program Participants, and small businesses. Knowing earlier in the process will save money and the municipal pre-approval embodied in the location-free HCA will allow people, and not just monied corporations, to break into the cannabis business here in the Commonwealth.
Editor's note: NewCann is represented by ELEVATE NE founding member and cannabis attorney, Blake Mensing.