Allowing recreational cannabis dispensaries to set up shop in their municipalities put Lynn and Swampscott at the cusp of a budding new revenue stream.
Since July 2019, The city of Lynn collected approximately $1.72 million from recreational cannabis sales across the city’s five dispensaries.
Swampscott, home to two pot shops, raked in a total of $134,793 in 2022. Town Administrator Sean Fitzgerald said that since the town’s most recent location, Local Cannabis Company, opened in December, he expects that number to grow “significantly” by 2024.
“We anticipate significantly more at the end of the year,” Fitzgerald said.
In Massachusetts, the Department of Revenue kicks back three percent of gross cannabis sales to the municipality in which the cannabis was sold.
Lynn, which opened its first recreational use dispensary, Apothca, in 2019, has since collected $863,042 in cannabis sales taxes.
While these funds are distributed to a general fund that can be spent freely, cities and towns can charge dispensaries an additional three percent through Host Community Agreements (HCA).
HCAs require dispensaries to pay up to an additional three percent to their host municipalities to fund any perceived issues that might arise from cannabis sale in the area.
“That money, by state law could, only be expended to combat or alleviate any negative effects of cannabis in the community. We’ve been collecting that from the cannabis businesses as they open up,” said City Attorney Jim Lamanna.
The city plans to use the approximate $860,000 collected through HCAs for park spaces to counteract the smell of marijuana smoke in the city and for roadway improvements to combat the negative traffic impacts brought on by dispensaries, he said.
“Up ‘till now we’ve been putting that money into a pot and letting it accumulate,” Lamanna said. “We have a design to to look at things that we know that are affecting the community. Any business that’s successful will have wear and tear on roadways, so street improvements, intersection improvements.”
Currently, it’s legal for adults to smoke marijuana in their own homes, or depending on their lease agreements, in their rental agreements. By investing in playgrounds and open-air spaces, Lamanna said, the city could counteract some of the potential negative impacts of marijuana air pollution.
“Providing people, particularly children, fresh air away from the cannabis smell — perhaps it’s worthy to invest in our parks and playgrounds with some of this money,” Lamanna said. “The city has identified those two as easy expenditures that they’re looking into to utilize that pot of money as it comes in.”
In August, former Gov. Charlie Baker enacted an amended cannabis laws allowing the state’s Cannabis Control Commission the ability to scrutinize how municipalities spend their HCA funds.
Under the amended cannabis laws, dispensaries can appeal their towns or cities reported uses of HCA funds, putting pressure on Lynn to consolidate their spending plans as soon as possible.
“It will require the city moving forward to document the negative effects to get that additional three percent,” Lamanna said.
Luckily for the city, he said, cannabis revenue generated enough money to get the ball rolling on a spending plan in the near future.
“It’s up to a point where we can actually make some significant improvements whether it’s the playground, streets, or drug education,” Lamanna said.
