On Tuesday August 4, Middlesex County Superior Court Justice Asha White ruled largely in favor of three Newton cannabis dispensaries – Ascend, Redi, and Garden Remedies – deeming that a total of $2.4 million in Community Impact Fees (CIF) they had paid to the City of Newton were unlawful and must be repaid.
The payments were made under host community agreements (HCAs) between the dispensaries and the City.
“The CIF payments that the City collected from the Plaintiffs, pursuant to the Original HCAs, were unlawful under the Pre-2022 Version and must be repaid to the Plaintiffs,” according to the judge’s ruling.
A week later, on August 11, the City of Newton announced plans to appeal the ruling.
“The City is disappointed by the trial court’s decision and respectfully disagrees with the ruling,” said City Solicitor Alissa O. Giuliani. “Given the broad legal and financial implications of this decision to the residents and taxpayers of Newton as well as to other communities across the Commonwealth, the City intends to pursue appellate review.”
In 2017, Massachusetts’s marijuana law was amended by “An Act to Ensure Safe Access to Marijuana” (Chapter 55 of the Acts of 2017), adding rules for original host community agreement (HCA) and community impact fee (CIF) that governed municipal contracts with local dispensaries. These fees allowed cities to charge a dispensary a fee (capped at 3% of gross sales), as long as that fee was tied to real costs the dispensary caused the city—rather than a general “marijuana tax.”
In accordance with the Massachusetts Legislature at the time, Newton cannabis dispensaries signed HCAs with the City and started submitting payments. Newton collected CIFs between 2018 and 2022, and per the Middlesex Superior Court, spent the CIF money it collected from the three plaintiffs on seven specific items:
“The City spent the money it collected from the Plaintiffs as CIF payments under the Original HCAs on seven specific items: (1) Officer Leo[, a community resource dog]; (2) the design for the redevelopment of Washington Street; (3) a contract with the Gavin Foundation for the provision of substance abuse services; (4) counseling services; (5) the [Newton Public Schools] Curriculum, which included programming directed at substance use prevention, screening, and support; (5) two part-time psychologists, who were hired to work as substance abuse counselors in the [NPS] system; (6) a drug drop-off kiosk; and (7) Narcan kits for free distribution to the community.”
The three dispensaries paid roughly $2.4 million combined in impact fees. Garden Remedies at 697 Washington Street paid the City $1,704,175, Cypress Tree Management (which oversees Redi at 24 Elliot Street) paid the City $200,937, and Ascend at 1089 Washington Street paid the City $492,855.
In 2022, Massachusetts lawmakers tightened the rules. The changes added an eight-year cap on CIFs, banned flat percentage-based fees, required cities to document and disclose actual costs to dispensaries, folded all payments into one regulated fee, and gave dispensaries the right to sue if they think a fee is not justified.
The three Newton dispensaries filed suit on February 14, 2025, claiming that the fees Newton charged them were not tied to real, specific costs caused by their businesses.
According to the ruling, the judge found that all seven of the City’s types of expenditures were not directly related to actual costs caused by the dispensaries. Examples include:
- “The results of the 2023 [NPS] Youth Risk Behavior survey indicated that, between 2012 and 2023, marijuana use had actually decreased among high schoolers in the Newton public school system.” (p. 4)
- “Even accepting the City’s assertion that Officer Leo was purchased to help educate young people about substance abuse issues, there is no indication that the substance abuse issues in question were specifically related to either marijuana or, more importantly, the Plaintiffs’ business operations.” (p. 15)
- “The City’s plans for Washington Street’s redevelopment began well before the legalization of marijuana, and the City points to no record evidence demonstrating that it was required to change or expand these plans as a result of the Plaintiffs’ operations.” (p. 16)
- “Narcan is a treatment used to reverse the effects of an opioid overdose; there is no record evidence that Narcan is effective as to marijuana.” (p. 18)
Because Newton’s contracts with these three dispensaries were signed in 2018 and 2019 (before the 2022 change took effect), the court decided the new rules did not apply retroactively, and judged the case under the older 2017 rules instead, determining the fees illegal under the 2017 version of the law, entitling them to breach-of-contract damages, restitution, and a court declaration confirming this plus repayment.
City councilors and police department representatives – as well as the three dispensaries – contacted by Fig City News declined to provide comment.