SENATE . . . . . . . . . . . . . . No. 3096
The Commonwealth of Massachusetts
_______________
In the One Hundred and Ninety-Second General Court
(2021-2022)
_______________
SENATE, July 31, 2022
1 Report of the committee of conference on the disagreeing votes of the two branches, with
2 reference to the House amendments to the Senate Bill relative to equity in the cannabis industry
3 (Senate, No. 2823) (amended by the House by striking out all after the enacting clause and
4 inserting in place thereof the text of House document numbered 4800),-- reports, a “Bill relative
5 to equity in the cannabis industry.” (Senate, No. 3096).
6
For the Committee:
Michael J. Rodrigues Daniel M Donohue
Joanne M. Comerford Joseph F. Wagner
Ryan C. Fattman Matthew J. Muratore
7
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 SENATE . . . . . . . . . . . . . . No. 3096
The Commonwealth of Massachusetts
_______________
In the One Hundred and Ninety-Second General Court
(2021-2022)
_______________
An Act relative to equity in the cannabis industry.
Be it enacted by the Senate and House of Representatives in General Court assembled, and by the authority
of the same, as follows:
8 SECTION 1. Subsection (d) of section 2 of chapter 62 of the General Laws, as appearing
9 in the 2020 Official Edition, is hereby amended by adding the following paragraph:-
10 (4) An amount equal to the amount paid or incurred during the taxable year in carrying on
11 the trade or business of a marijuana establishment as defined in section 1 of chapter 94G or a
12 medical marijuana treatment center as defined in section 1 of chapter 94I that would have been
13 deductible under the Code, but for section 280E of said Code.
14 SECTION 2. Section 30 of chapter 63 of the General Laws is hereby amended by striking
15 out paragraph 4, as so appearing, and inserting in place thereof the following paragraph:-
16 4. “Net income”, gross income less the deductions, but not credits, allowable under the
17 provisions of the Code, as amended and in effect for the taxable year; provided, however, that
18 any deduction otherwise allowable which is allocable, in whole or in part, to 1 or more classes of
19 income not included in a corporation’s taxable net income, as determined under subsection (a) of
20 section 38, shall not be allowed. In the case of a corporation exempt from taxation under section
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21 501 of the Code, “net income” means unrelated business taxable income, as defined in section
22 512 of the Code. In lieu of disallowing any deduction allocable, in whole or in part, to dividends
23 not included in a corporation’s taxable net income, 5 per cent of such dividends shall be
24 includable therein, as provided in said subsection (a) of said section 38. For the purposes of this
25 section and said subsection (a) of said section 38, the term “dividend” shall include, but not be
26 limited to, amounts included in federal gross income pursuant to sections 951 and 951A of the
27 Code. For the purposes of this section, any dividend received directly or indirectly from a real
28 estate investment trust, as provided in sections 856 to 859, inclusive, of the Code, for the taxable
29 year of the trust in which a dividend is paid, shall not be: (i) treated as a dividend; and (ii)
30 included as part of the dividends received deduction otherwise available to the taxpayer under
31 paragraph (1) of said subsection (a) of said section 38. Any dividend received directly or
32 indirectly from a regulated investment company, as provided in sections 851 to 855, inclusive, of
33 the Code, shall not be included as part of the dividends received deduction otherwise available
34 under said paragraph (1) of said subsection (a) of said section 38.
35 The following deductions shall be allowed: (i) a deduction for that portion of wages or
36 salaries paid or incurred for the taxable year equal to the amount of the credit allowable for the
37 taxable year under section 51 of the Code and otherwise disallowed under section 280C of said
38 Code; and (ii) a deduction for any amount paid or incurred during the taxable year in carrying on
39 the trade or business of a marijuana establishment, as defined in section 1 of chapter 94G, or a
40 medical marijuana treatment center, as defined in section 1 of chapter 94I, that would have been
41 deductible under the Code, but for section 280E of said Code.
42 Deductions with respect to the following items shall not be allowed:
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43 (i) dividends received;
44 (ii) losses sustained in other taxable years, except for the net operating losses as provided
45 in paragraph 5 of this section;
46 (iii) taxes on or measured by income, franchise taxes measured by net income, franchise
47 taxes for the privilege of doing business and capital stock taxes imposed by any state;
48 (iv) the deduction allowed by section 168(k) of said Code;
49 (v) except as otherwise provided in section 31J, interest expense paid, accrued or asserted
50 in connection with a dividend of a note or similar obligation stating the requirement that such
51 interest is to be paid by the corporation that dividends such obligation to its shareholders;
52 (vi) the deduction allowed by section 199 of the Code;
53 (vii) the deduction described in section 163(e)(5) of the Code to the extent increased by
54 amendments to section 163(e)(5)(F) and section 163(i)(1) of the Code, inserted by section 1232
55 of the federal American Recovery and Reinvestment Act of 2009, Pub. L. 111-5; and
56 (viii) the deductions allowed by sections 245A, 250 and 965(c) of the Code.
57 SECTION 3. Section 7E of chapter 64C of the General Laws, as so appearing, is hereby
58 amended by striking out subsection (m) and inserting in place thereof the following subsection:-
59 (m) Marijuana products and marijuana accessories as defined in section 1 of chapter 94G
60 shall not be subject to the excise imposed under this section; provided, however, that marijuana
61 accessories that are manufactured to also deliver nicotine shall be considered an electronic
62 nicotine delivery system and shall be subject to the excise imposed under this section.
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63 SECTION 4. Section 1 of chapter 64N of the General Laws, as so appearing, is hereby
64 amended by adding the following subsection:-
65 (c) “Social equity business”, a marijuana retailer that is a social equity business, as
66 defined in section 1 of chapter 94G.
67 SECTION 5. Section 2 of said chapter 64N, as so appearing, is hereby amended by
68 amended by adding the following paragraph:-
69 A sum equal to 1 per cent of the total sales price received under this section from a
70 marijuana retailer that is a social equity business, as defined in section 1 of chapter 94G, shall,
71 not less than quarterly, be distributed, credited and paid by the state treasurer upon certification
72 of the commissioner to each city or town that has at least 1 marijuana retailer that is a social
73 equity business, in proportion to the amount of the sums received from the sale of marijuana or
74 marijuana products by any such marijuana retailer in the city or town. Any city or town seeking
75 to dispute the commissioner's calculation of its distribution under this paragraph shall notify the
76 commissioner, in writing, not later than 1 year from the date the money was distributed by the
77 commissioner to the city or town.
78 SECTION 6. Section 1 of chapter 94G of the General Laws, as so appearing, is hereby
79 amended by inserting after the definition of “Host community” the following definition:-
80 “Host community agreement”, an agreement between a marijuana establishment or a
81 medical marijuana treatment center and a municipality pursuant to subsection (d) of section 3.
82 SECTION 7. Said section 1 of said chapter 94G, as so appearing, is hereby further
83 amended by inserting after the definition of “Marijuana retailer” the following definition:-
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 84 “Medical marijuana treatment center”, a medical marijuana treatment center as defined in
85 section 1 of chapter 94I.
86 SECTION 8. Said section 1 of said chapter 94G, as so appearing, is hereby further
87 amended by inserting after the definition of “Residual solvent” the following definition:-
88 “Social equity business”, a marijuana establishment with not less than 51 per cent
89 majority ownership of individuals who are eligible for the social equity program under section 22
90 or whose ownership qualifies it as an economic empowerment priority applicant as defined by
91 the commission’s regulations promulgated pursuant to section 4.
92 SECTION 9. Section 3 of said chapter 94G, as so appearing, is hereby amended by
93 striking out subsection (b) and inserting in place thereof the following subsection:-
94 (b)(1) For the purposes of this subsection, the following words shall, unless the context
95 clearly requires otherwise, have the following meanings:
96 “Ballot question committee”, as defined in section 1 of chapter 55.
97 “Registrars”, as defined in section 1 of chapter 50.
98 (2) The city council of a city and the board of selectmen or town council of a town shall,
99 upon the filing with the city or town clerk of a petition meeting the requirements of this
100 subsection, request that the question of whether to allow, in the city or town, the sale of
101 marijuana and marijuana products for consumption on the premises where sold, be submitted to
102 the voters of the city or town.
103 The petition shall be on a form prepared by the state secretary, signed by not less than 10
104 per cent of the number of voters of the city or town who voted at the preceding biennial state
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105 election and submitted in a timely manner, after filing the petition with the city or town clerk, to
106 the board of registrars or election commissioners. The board of registrars or election
107 commissioners shall certify the signature of registered voters not more than 7 days after receipt
108 of the petition. Upon certification of the signatures, the following question, and a fair and concise
109 summary of the question to be prepared by the city solicitor or town counsel, shall be placed on
110 the ballot for the next regularly occurring municipal or state election in the city or town:
111 “Shall [city or town] allow the sale of marijuana and marijuana products, as those terms
112 are defined in section 1 of chapter 94G of the General Laws, for consumption on the premises
113 where sold, a summary of which appears below?”
114 Notwithstanding the foregoing, the question shall appear on the ballot for the next
115 regularly occurring municipal election if the election is to be held not less than 35 days after
116 certification. To appear on the ballot for the next regularly occurring biennial state election, the
117 city or town clerk shall provide notice, including the ballot question and summary, to the state
118 secretary not later than the first Wednesday in August before the election.
119 If a majority of the votes cast in the city or town are in favor of allowing the consumption
120 of marijuana or marijuana products on the premises where sold, such city or town shall have
121 authorized the consumption of marijuana and marijuana products on the premises where sold.
122 (3) As an alternative to a local voter initiative petition process under paragraph (2), a city
123 or town may, by ordinance or by-law, allow the consumption of marijuana or marijuana products
124 on the premises where sold. No local voter initiative shall be required if the sale of marijuana and
125 marijuana products for consumption on the premises is authorized by local law.
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126 (4) A ballot question committee organized to favor or oppose a question placed on the
127 ballot pursuant to paragraph (2) of this subsection shall comply with applicable guidance and
128 regulations issued by the office of campaign and political finance for municipal ballot question
129 committees.
130 SECTION 10. Said section 3 of said chapter 94G, as so appearing, is hereby further
131 amended by striking out subsection (d) and inserting in place thereof the following subsection:-
132 (d)(1) A marijuana establishment or a medical marijuana treatment center seeking a new
133 license or renewal of a license to operate or continue to operate in a municipality that permits
134 such operation shall negotiate and execute a host community agreement with that host
135 community setting forth the conditions to have a marijuana establishment or medical marijuana
136 treatment center located within the host community, which shall include, but not be limited to, all
137 stipulations of responsibilities between the host community and the marijuana establishment or
138 medical marijuana treatment center.
139 (2)(i) Notwithstanding any general or special law to the contrary, a host community
140 agreement may include a community impact fee for the host community; provided, however, that
141 no host community agreement shall include a community impact fee after the eighth year of
142 operation of a marijuana establishment or a medical marijuana treatment center. The community
143 impact fee shall: (A) be reasonably related to the costs imposed upon the municipality by the
144 operation of the marijuana establishment or medical marijuana treatment center, as documented
145 pursuant to subparagraph (iii); (B) amount to not more than 3 per cent of the gross sales of the
146 marijuana establishment or medical marijuana treatment center; (C) not be effective after the
147 marijuana establishment or medical marijuana treatment center’s eighth year of operation; (D)
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148 commence on the date the marijuana establishment or medical marijuana treatment center is
149 granted a final license by the commission; and (E) not mandate a certain percentage of total or
150 gross sales as the community impact fee.
151 (ii) Notwithstanding any general or special law to the contrary, the community impact fee
152 shall encompass all payments and obligations between the host community and the marijuana
153 establishment or a medical marijuana treatment center. The community impact fee shall not
154 include any additional payments or obligations, including, but not limited to, monetary
155 payments, in-kind contributions and charitable contributions by the marijuana establishment or
156 medical marijuana treatment center to the host community or any other organization. Payment of
157 the community impact fee shall be due annually to the host community, with the first payment
158 occurring not sooner than upon the first annual renewal by the commission of a final license to
159 operate the marijuana establishment or medical marijuana treatment center. Any other
160 contractual financial obligation that is explicitly or implicitly a factor considered in, or is a
161 condition of a host community agreement, shall not be enforceable. Nothing in this section shall
162 preclude a marijuana establishment or a medical marijuana treatment center from voluntarily
163 providing organizations with monetary payments, in-kind contributions and charitable
164 contributions after the execution of the host community agreement; provided, however, that a
165 host community agreement shall not include a promise to make a future monetary payment, in-
166 kind contribution or charitable contribution.
167 (iii) Any cost imposed upon a host community by the operation of a marijuana
168 establishment or medical marijuana treatment center shall be documented by the host community
169 and transmitted to the licensee not later than 1 month after the date of the annual renewal of a
170 final license to operate the marijuana establishment or medical marijuana treatment center and
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171 shall be a public record as defined by clause Twenty-sixth of section 7 of chapter 4 and chapter
172 66. If a licensee believes the information documented and transmitted by a host community is not
173 reasonably related to the actual costs imposed upon the host community in the preceding year by
174 the operation of the marijuana establishment or medical marijuana treatment center, the licensee
175 may bring a breach of contract action against the host community and recover damages,
176 attorneys’ fees and other costs encompassed in the community impact fee that are not reasonably
177 related to the actual costs imposed upon the city or town.
178 (3) The commission shall review and approve each host community agreement as part of
179 a completed marijuana establishment or medical marijuana treatment center license application
180 and at each license renewal. If the commission determines that a host community agreement is
181 not in compliance with this section, the commission shall provide written notice of any
182 deficiencies and may request addition