DOWNLOAD the decision of the SJC

Keywords:  Marijuana. License. Municipal Corporations, By-laws and ordinances, Contracts, Marijuana. Contract, Municipality. Mandamus. Practice, Civil, Action in nature of mandamus, Action in nature of certiorari, Motion to dismiss, Judgment on the pleadings. Regulation.

In a must-read decision issued today, Merderi Inc. v. City of Salem, et al, the SJC upheld the City’s denial of a Host Community Agreement (HCA) to an applicant.  The SJC held in part that “[a]lthough we observe that the interplay between the statute and the regulations may have led to consequences perhaps not contemplated by the Legislature or the commission, we nevertheless conclude that Mederi’s claims properly were denied, and thus affirm the decision.”  The SJC also reviewed the legislative history of marijuana law in Massachusetts.

The Court rejected Mederi’s request for mandamus, noting that “Nothing in G. L. c. 94G, § 3, imposes a duty on a city or town to enter into an HCA with a prospective recreational marijuana establishment simply because that establishment is able to fulfill the municipality’s HCA requirements.  Indeed, G. L. c. 94G, § 3 (d), the provision governing HCAs, merely provides that a prospective marijuana establishment must enter into an HCA with a host community before it can operate.  That provision contemplates a negotiation between the host community and the applicant, stating that the HCA must include “all stipulations of responsibilities between the host community and the marijuana establishment.”  Id.

The Court also dismissed  Mederi’s claim for a cert appeal.  ” Because the city had a rational basis for choosing these applicants, its decision not to enter into an HCA with Mederi was neither arbitrary nor capricious.  See Attorney Gen., 382 Mass. at 62.  Based on the high number of applicants on Highland Avenue, the city ultimately selected two applicants that planned to locate on that street –- Atlantic Medicinal and INSA –- that, in its view, had stronger proposals than Mederi.”

The challenge to the impact fees was also denied, with the Court finding that the applicant did not have standing since they never entered into a HCA.  Other challenges met a similar fat

Congratulations to MMLA member and Salem Assistant City Solicitor Victoria Caldwell for this very impressive and important win for municipalities!

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