Six Massachusetts municipalities have received subpoenas from a federal grand jury investigating payments from the marijuana companies they host.
U.S. Attorney Andrew Lelling is leading efforts to clamp down on controversial contracts that require recreational cannabis companies to sign up with communities in which they hope to operate before they can apply for a state license. His office has issued subpoenas to Great Barrington, Eastham, Leicester, Newton, Northampton, and Uxbridge.
Lelling has previously declared that he is concerned about Massachusetts’ approval process for marijuana businesses, arguing that it invites a level of petty corruption. It came after he charged Fall River mayor Jasiel Correia with extorting cannabis companies and receiving hundreds of thousands of dollars in bribes.
Correia is accused of demanding and accepting bribes ranging from $100,000 to $250,000 in cash, campaign contributions and mortgage discharges in return for non-opposition letters to marijuana businesses operating in the Fall River area. He has issued at least 14 of these non-opposition letters for cannabis firms, and he is accused of extorting four of them.
The six municipalities have confirmed that they were issued with subpoenas, but more could be in the offing. The Boston Globe reports that there could be a grand jury hearing later this month.
The legal recreational cannabis industry in the U.S. faces a considerable challenge in seizing market share from the black market and having to pay for host community impact fees makes it harder for them to achieve that.
State law caps the size of these fees at 3% of revenue, but some agreements have reportedly required additional donations, while other contracts have exceeded that cap.
The Massachusetts Cannabis Control Commission says that it lacks the authority to regulate these agreements between businesses and their host communities. Commissioners have asked state lawmakers to grant them that authority, but in the meantime the feds are seemingly taking matters into their own hands.
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