Worcester panel favors 15 pot shops at most, and 3% local tax on marijuana sales
By
Nick Kotsopoulos
Telegram & Gazette Staff
Posted Nov 28, 2017 at 10:10 PM
Updated Nov 29, 2017 at 6:03 AM
WORCESTER - A City Council standing committee favors limiting the
number of establishments selling recreational marijuana in the city to
15 and having a 3 percent local tax assessed on their sales.
Tuesday night, the Economic Development Committee unanimously endorsed those recommendations made by City Manager Edward M. Augustus Jr. as part of an overall package he submitted to the City Council detailing how the city should respond to the new state law that allows sale and use of marijuana.
While state regulations governing the sale of recreational marijuana are not expected to be released until early next year, District 1 Councilor Tony Economou, committee chairman, said the city wants to lay some groundwork.
“We want to set the tempo and mood early on so there is a clear understanding right off the bat of what the city is going to do and what its expectations are,” Mr. Economou said.
The law allowing the sale of recreational marijuana takes effect in July.
Under the law, a maximum tax rate of 20 percent has been set on the retail sale of marijuana - 6.25 percent state sales tax, plus a state excise tax of 10.75 percent, plus an optional municipal tax of up to 3 percent.
As recommended by the city manager, the three-member council committee endorsed an order accepting the maximum 3 percent local sales tax option. Money generated from that tax would be a general fund receipt and disbursed by the state in the same manner as the general sales tax.
Adoption of the local sales tax requires a simple City Council majority of six votes.
Meanwhile, municipalities cannot limit the number of recreational marijuana establishments to fewer than 20 percent of their number of off-premises alcohol licenses, including package stores, convenience stores and supermarkets.
Because Worcester has been allotted 74 off-premises liquor licenses,
the city has to allow at least 15 recreational marijuana retail
establishments.
The city can allow more than 15 such establishments, but if it wants to restrict the number of such businesses to the highest limit allowed by the law, it can do so only by enacting an ordinance.
Meanwhile, if the city wants to ban such establishments, or limit them to fewer than 15, the City Council would have to put the question on the ballot and let the voters decide.
Given the number of active off-premises alcohol licenses in the city, Mr. Economou said, the likelihood of the city having to allow more than 15 recreational marijuana establishments is probably “minimal at best.”
Jacob Sanders, who handles intergovernmental and municipal initiatives in the city manager’s office, said there is no way of knowing at this time how many applications the city is going to receive for recreational marijuana retail licenses.
He said the city probably won’t know until the final regulations are issued, though he added the city is aware of some interested parties. But he said the city cannot entertain any discussions with those parties until the state regulations are issued.
District 3 Councilor George J. Russell and District 4 Councilor Sarai Rivera, along with Mr. Economou, expressed concern about where the recreational marijuana businesses are allowed to set up shop.
They said they do not want to see them end up concentrated in just a few parts of the city, as has happened with package stores.
Mr. Russell also broached the question of whether package store owners will be able to apply for a license to sell recreational marijuana at their business.
The committee was told that further actions related to zoning and the siting of these establishments will be presented to the City Council after the five-member state Cannabis Control Commission comes out with its regulations.
Voters statewide approved a referendum in November 2016 that legalized recreational marijuana. It was approved, 53.6 percent to 46.4 percent. In Worcester, voters approved the ballot question 55 percent to 45 percent.
Tuesday night, the Economic Development Committee unanimously endorsed those recommendations made by City Manager Edward M. Augustus Jr. as part of an overall package he submitted to the City Council detailing how the city should respond to the new state law that allows sale and use of marijuana.
While state regulations governing the sale of recreational marijuana are not expected to be released until early next year, District 1 Councilor Tony Economou, committee chairman, said the city wants to lay some groundwork.
“We want to set the tempo and mood early on so there is a clear understanding right off the bat of what the city is going to do and what its expectations are,” Mr. Economou said.
The law allowing the sale of recreational marijuana takes effect in July.
Under the law, a maximum tax rate of 20 percent has been set on the retail sale of marijuana - 6.25 percent state sales tax, plus a state excise tax of 10.75 percent, plus an optional municipal tax of up to 3 percent.
As recommended by the city manager, the three-member council committee endorsed an order accepting the maximum 3 percent local sales tax option. Money generated from that tax would be a general fund receipt and disbursed by the state in the same manner as the general sales tax.
Adoption of the local sales tax requires a simple City Council majority of six votes.
Meanwhile, municipalities cannot limit the number of recreational marijuana establishments to fewer than 20 percent of their number of off-premises alcohol licenses, including package stores, convenience stores and supermarkets.
The city can allow more than 15 such establishments, but if it wants to restrict the number of such businesses to the highest limit allowed by the law, it can do so only by enacting an ordinance.
Meanwhile, if the city wants to ban such establishments, or limit them to fewer than 15, the City Council would have to put the question on the ballot and let the voters decide.
Given the number of active off-premises alcohol licenses in the city, Mr. Economou said, the likelihood of the city having to allow more than 15 recreational marijuana establishments is probably “minimal at best.”
Jacob Sanders, who handles intergovernmental and municipal initiatives in the city manager’s office, said there is no way of knowing at this time how many applications the city is going to receive for recreational marijuana retail licenses.
He said the city probably won’t know until the final regulations are issued, though he added the city is aware of some interested parties. But he said the city cannot entertain any discussions with those parties until the state regulations are issued.
District 3 Councilor George J. Russell and District 4 Councilor Sarai Rivera, along with Mr. Economou, expressed concern about where the recreational marijuana businesses are allowed to set up shop.
Mr. Russell also broached the question of whether package store owners will be able to apply for a license to sell recreational marijuana at their business.
The committee was told that further actions related to zoning and the siting of these establishments will be presented to the City Council after the five-member state Cannabis Control Commission comes out with its regulations.
Voters statewide approved a referendum in November 2016 that legalized recreational marijuana. It was approved, 53.6 percent to 46.4 percent. In Worcester, voters approved the ballot question 55 percent to 45 percent.
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