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Attorney Raymond Miyares said there is a lot of uncertainty in the legal language of the recreational marijuana law.

Attorney Offers Overview of Marijuana Law for Municipalities

By Andy McKeeveriBerkshires Staff
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The implementation of the new law is drawn out over a number of years.
LENOX, Mass. — Marijuana is still illegal on the federal level so income raised from sales of pot cannot legally be placed in federally regulated banks.
So, what are towns supposed to do with the money raised from a local option tax now that marijuana sales will be legal on the state level?
That's one of the questions yet to be answered after Massachusetts voters approved a ballot initiative to legalize the use, sale, and taxation of marijuana. 
Attorney Raymond Miyares of Miyares & Harrington LLP of Wellesley provided a presentation on the law, aimed particularly for local officials, on Thursday night. 
His message was clear: the law is anything but clear.
"The law that was adopted by the voters was more popular with voters than it was clear. There are lots of things in the new law that are not as clear as we would like to be," Miyares said. 
The veteran attorney, with a specialty in environmental law and town counsel for seven towns including Stockbridge, provided his interpretation or "best guesses" on the law but cautioned that the Legislature is likely going to make changes to the ballot initiative.
"We don't really know how much tampering the Legislature will do," he said.
Further, the issue is in a precarious position because marijuana is still federally regulated and he doesn't know how the next U.S. attorney general will handle it. The nominee, U.S. Sen. Jeff Sessions of Alabama, is a vocal opponent against marijuana.
Miyares started with the basics. The Regulation and Taxation of Marijuana Act as passed by the voters allows adults to possess and cultivate marijuana in limited amounts, creates a Cannabis Control Commission, through the treasurer's office, to act as the licensing authority, sets a 4.75 percent excise on top of the 6.25 regular sales tax, and allows municipalities the option to add 2 percent more.
The state will oversee the law through a Cannabis Control Commission, made up of three members appointed by the treasurer. The commission will serve as the authority to issue all licenses and must of regulations in place by March 1, 2018. A second Cannabis Advisory Board will consist of 15 members appointed by the governor. That board will perform studies and make recommendations and is supposed to be in place by August of this year. 
"The county was unanimous. Every town voted yes," Miyares said of the vote totals on the question.
But, he isn't convinced that the majority of the voters got past the question of whether marijuana should be legal or not. While proponents say the vote was for the entire regulatory package, he doesn't think most voters had delved into the specifics of it.
The timeline of implementation started on Dec.15, 2016, when it became legal for individuals over the age of 21 to possess and cultivate marijuana. A person can cultivate six plants or a household can cultivate 12 plants. A person can possess up to an ounce. Public consumption is still illegal.
"As we sit here today, adults may possess and cultivate marijuana in limited quantities," Miyares said. 
Most people know that. But, what most people don't know is that somebody looking to open an establishment can pull building permits already.
"As we sit here today someone can walk into town hall and get a building permit for a retail establishment. There is no prohibition against retail establishments right now," he said.
The commission's regulations are supposed to be adopted by March 1, 2018, but Miyares says 13 months is very fast when it comes to making state regulations and he expects that timeline to be push back yet again.
"That gives them 13 months to adopt regulations. If the medical marijuana regulations are any indication then that is tight," Miyares said. "I wouldn't be surprised to see this get extended again."
Licenses are expected to begin being issued by April 1, 2018. Miyares said there is a new category for licenses than have been available in the past and those are for testing facilities. He said "experienced operators" can apply then.
But, he says, the law isn't clear on what "experienced operators mean." From the audience, someone asked if the owner of an organic greenhouse be considered an "experienced operator" for a cultivation license. 
"The statute doesn't tell us what experienced means," Miyares said.
Miyares says experienced operators could be considered medical marijuana treatment facilities in good standing. But right now, there are none in the Berkshires.
Or, it can mean a medical marijuana business can reorganize and become one for recreational use. Under the medical marijuana laws, the license holders had to be non-profits and affiliated with medical. But, now there is the option to become commercial. 
Turning commercial requires two-thirds vote of the company's board of directors, to have had a provisional license by Dec. 15, 2016, and notifying the Department of Public Health. 
"DPH did us all a favor of issuing a good amount of provisional licenses just before the deadline," Miyares said. 
There are five provisional licenses in the Berkshires right now — three in Pittsfield, one in Lee, and one in Great Barrington. All of those have the ability to reorganize and get the first crack at a recreational license. 
If the Cannabis Control Commission fails to adopt regulations by July 1, 2018, then medical marijuana facilities can begin to cultivate, process or sell for recreational use with the license they currently have. 
"That is a pretty good incentive for the state to get its act together," Miyares said. 
The forum was put on by the Berkshire Regional Planning Commission, so many in the audience were municipal planners and particularly interested in land-use regulations. Miyares said cities and towns do have the ability to limit the number of licenses and to regulate where in a municipality retailers and growers can operate.
If a town is limiting the number of licenses before July 1, 2018, then experienced operators have the ability to seek a license first. Then, it will go to a lottery system. After July 1, 2018, all applicants are to be considered through a lottery. 
The licensing process starts with an application to the Cannabis Control Commission, which then notifies the town. The town has 90 days to respond to the application saying whether or not there are any local bylaws the proposal is breaking. But no response means the state can go ahead and issue the license. Right now it isn't clear how towns will be notified. 
"The state has an unhappy history of not recognizing that municipalities have different governments," Miyares said.
The requirements for a license are compliance with the yet unwritten regulations, compliance with MGL Chapter 94G, which is the new law, and local restrictions. The applicant must pay a fee, felons are not able to receive a license, and one can't operate within 500 feet of a school.
Miyares reminded the audience that marijuana sales are considered retail and not a separate use. That means anywhere in a town that allows retail by zoning, a pot shop can open without special requirements. The same goes for manufacturing in industrial zones. Testing facilities are brand new, so most towns don't have zoning regulations to restrict them.
Cultivation facilities, however, are a different story. When lawmakers extended the timeline of the law in December, they also ruled that marijuana cultivation is not considered an agricultural use. 
"It seemed to be a concern of the Legislature that marijuana cultivation should be cut out of the definition of agriculture. What they didn't do, is since it is not agriculture, then what is it? They didn't tell us what it is," Miyares said. 
As for what towns can do locally, that is the "biggest mystery of all" in the law, he said.
The law allows the prohibition of one or all types of establishments. A town can limit the number of marijuana retailers to fewer than 20 percent of the number of package store licenses. Or it can limit the number of marijuana establishments to fewer than the number of medical marijuana facilities.
But all of those needs a "vote of the voters."
"It requires you to do something they neglected to define and that is you must have a vote of the voters. My best guess of what a vote of the voters means, I believe towns that have open town meetings, a town meeting is a vote of the people," Miyares said. 
Those prohibitions or restrictions needing a vote have to pass with a two-thirds majority, the same way any zoning bylaw needs to be approved.
But some of his colleagues disagree with the interpretation that a town meeting can approve it and believe a ballot initiative is needed. And then the legal language to adopt those provisions is even more debated. 
Towns can also adopt a zoning moratorium, which does not need a vote. He said the state attorney general's office has approved one in West Bridgewater already. 
"You get the advantage of waiting until after the state has promulgated some regulations," he said. 
A moratorium must be for a specified period of time. Miyares suggests 15 months, which starts when town meeting adopts the moratorium, gives a year to develop local regulations, approval of those regulations at the following town meeting, and then 90 days to get the bylaws in place. 

Every town in Berkshire County voted in favor of legalizing marijuana, some by a larger margin than the state average. 
Miyares said, however, that the state will be doing the majority of the regulating so towns will need to keep an eye on those regulations and craft bylaws above and beyond them.
"The facilities, because of the fact that the licensing takes place at the state, you don't have to regulate every aspect of it. You only have to worry about what additional things you'd want to regulate," he said.
For towns that are envisioning a boom in economics from it, Miyares said marijuana cafes are not authorized. But, a referendum vote during a state election could allow them.
That requires a petition of 10 percent of voters. Marijuana cafes, however, are likely to only be used for edibles and not smoking because smoking laws supersede the cafes, Miyares said.
"It does not acknowledge that in most circumstances that a ballot question can be put on a warrant by a board of selectmen or a city council," he said.
As for the 2 percent local option tax, Miyares said that, too, isn't clear and he suggests it be a bylaw or ordinance. He suspects those would be adopted in the same manner as the rooms and meals taxes.
The presentation led to a number of questions from the audience, though there were few answers.
Someone from Egremont asked about sales to people out of state; Miyares responded that "sales are sales, it doesn't matter to whom you sell it." So people from New York can drive over the border and buy the product, but could face trouble for possessing it in New York. 
Miyares responded to another question saying that towns can pass zoning bylaws that restrict retail operations in certain zones, the same way adult video stores or tattoo shops can be singled out of certain retail districts. 
The federal restrictions prompted other question such as banking and financing. Federally regulated banks are not legally allowed to loan money to help start up marijuana companies. The profits are not allowed to be placed in a bank — so where is the money supposed to be kept? And for that matter, where are the towns supposed to keep the revenue from the local option tax?
Miyares says he believes towns will be able to put the tax money into a bank but he said he has absolutely no basis for making that assumption.
The federal restrictiona limit interstate commerce, so where are the seeds coming from? Other states have adopted legal cultivation but how will those seeds legally be transported to startup companies in Massachusetts? Miyares responded, tongue in cheek, that he has to assume the seeds will "spontaneously arrive."
Miyares said he expects the biggest issue with the rollout will be controlling the black market. He said if the state doesn't crack down on the black market, then the licenses it issues will lose value. 
The overview was sponsored by BRPC as informational and not as professional legal counsel. The goal was to keep towns aware of the new law and what options each one has either to support or restrict pot operations. 
"We serve as a technical resource to the cities and towns in Berkshire County and providing information about current topics is one of the more important roles that we take," BRPC Assistant Director Thomas Matuszko said.
"We just want to provide some information to allow communities to make good decisions."

Tags: bylaws,   marijuana,   pot,   

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