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Caroline Pineau Fights Back Against “Impact Fees” in Massachusetts

Caroline Pineau is not just a marijuana entrepreneur, she’s also based in Haverhill Massachusetts. She’s also an active part of the community, and strives to lift up other women and marginalized folks in her work. Caroline Frankel and her collaboration with Caroline Frankel to succeed in the business sector is a good example of this. 

However, despite Pineau’s efforts to do good and make a difference, her city is demanding “impact fees” from her work with her dispensary, Stem, and from other cannabis business owners, claiming cannabis is leading to more police necessity and crime, despite the fact that there is no evidence to support that. 

Pineau has a problem with the tax system. She is prepared to fight the case all the way to court. She sued Haverhill in protest of the impact fees. She could potentially impact the fee structure by suing Haverhill if she is successful. Chronic News Pineau was on hand to talk about fair business practices in Massachusetts. 

Sarah Gates Photography

You’re known for working with other people in the industry and building bridges. These connections were made how? 

I opened Stem, and we’re women-owned and one of the first economic empowerment licenses in the state to open. Technically, we were probably the second and first women-owned business. When I was going through the regulatory process, I became very close with another canna-sister, Caroline Frankel from Caroline’s Cannabis, who was a bit ahead of me in the licensing process. Her participation was in the program for social equity, while mine was in the program to empower the economy. 

Her assistance was invaluable in the licensing process. We have been close friends ever since. We bounce ideas off each other, and we’re in different markets, so we’re in no way competitors. We’re both there for each other for moral support, and we share industry challenges and chat about what suppliers are good to work with. There is a special sisterhood that we share.

How have your experiences been? What are the challenges you see women or marginalized individuals facing when trying to enter Massachusetts’s industry?

In the industry, one of the biggest challenges that I’m facing right now is the host community agreement in Massachusetts. I’m not sure if other markets have the same type of thing, but in Massachusetts, there’s a big gap in the legislation. It’s my local community using the stigma of cannabis to wrongfully collect fees that are owed to the municipality, and they’re unfair and unjust. 

I’m proud to take that fight on if it means change for other independent operators, people of color, marginalized communities, and people who can’t get access to the industry. The capital required to open a cannabis store is so high, and if these fees are benign wrongly collected, it’s just another perpetuated problem in the industry.  Although there were many communities that objected to the fees, no one took it as seriously as me. This may set the tone for state law on how localities can collect community agreements. 

Massachusetts
Sarah Gates Photography

For those who aren’t familiar, can you sum up what the impact fees are all about? 

Before you can open a Massachusetts cannabis business, you must first get permission from the local community through a host community agreement (also known as an HCA). A portion of the law allows for municipalities to ask for as much as three percent in impacts fees. The laws also stipulate that these fees have to be related reasonably to the operation. That’s in addition to the three percent local sales tax that my city already gets. This means they could get six percent from our gross revenues. 

It’s clear that the host community agreement process is being abused by communities and that the legislature has to adopt some fixes in order to stop communities like mine from going beyond what the law allows, which is up to three percent of reasonable, related costs. 

Do you desire to see positive change in the world? Do you wish for things to improve?
All of these issues existed prior to legalization. However, legal cannabis sales are actually proving beneficial for communities. So we’re glad to pay whatever impact fee is presented to us, as long as that fee is reasonably related to our operations, and that must be backed up by documentation, which is what the law indicates. 

We want these bills to pass that have been put before the legislature so that the Cannabis Control Commission has power to oversee what’s happening with host community agreements, because if communities continue to take advantage of operators, it’s only further perpetuating the stigma and interrupting the possibility for equity in this industry. 

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