Northampton proposed cannabis dispensary limit brings controversy over potential impacts

For more than four years, Northampton has been the center of Massachusetts’ retail cannabis industry.

It was here that people gathered from across the Northeast in late 2018, queuing hundreds deep to buy the first recreational marijuana legally available on the East Coast.

But on Thursday night, City Council members will attempt to bring back the community’s now-substantial collection of dispensaries — 11 stores, in a market roughly as large as Boston and Worcester, New England’s largest cities.

Three councilors have proposed a cap on the number of pot shops in the city, hoping an upper limit on the size of the local marijuana industry could offset some of the negative effects they believe stemmed from the legal drug market.

But other councillors, city officials and local business leaders say the proposed maximum — 12 dispensaries are allowed, with a few exceptions — may present unwanted effects. And they question whether dispensaries have the harmful effects that some have described.

Pricey Entry To The Northampton Cannabis Market

Proposed Dispensary Limit It will not be mandatory that any currently open business should be closed. That would limit the city to a dozen pot shops, with exceptions carved out for proposed dispensaries that already have lease agreements and social equity applicant – A state assistance program for business owners from backgrounds most affected by the War on Drugs.

The limit will allow Northampton to continue hosting one of the largest dispensary markets in the state.

At its most basic level, Mayor Gina-Louise Skiera and City Council President James Nash — both opponents of limiting Northampton dispensaries — don’t see such a rule as necessary.

The city of 29,000 residents had a dozen dispensaries as of early last month. Now it has 11: One store closed in December, the first in Massachusetts that fall. And with the exception of a new dispensary proposed over the summer – which the mayor is within his power to reject – there have been no new applications to enter the crowded local market since the summer of 2021.

Both Sciarra and Nash caution that a cap on dispensaries could create a secondary market for selling retail cannabis licenses, similar to the high-value trades that occur on a limited number of licenses for a town to sell alcohol. . Sciarra warned last week that the money needed to secure some of those licenses has limited entrepreneurs from opening restaurants in the city.

When a community reaches its state-mandated quota for a specific type of liquor license—for example, the type that allows a liquor store to sell all types of liquor for people to drink at home—they limit Permits can suddenly be worth a lot.

If someone wanted to start a restaurant or liquor store in a town without a license, they had one option: find a business to sell their license to, and pony up.

Depending on the business, a liquor license in the Northampton area can sell for tens of thousands of dollars – or even more than $100,000.

If the ordinance to limit the number of dispensaries passes Thursday night, Sciarra said it would increase the value of existing businesses and the licenses they hold, making it more likely that only one large business or national corporation Only Northampton can afford to buy pot. Shop.

Others aren’t sure it will last.

The per gram price of cannabis flower has almost halved in the last two years state data, Given the current volatility of the retail cannabis industry, City Councilman Stan Moulton is unsure there will be a market to buy Northampton’s dispensaries if their licenses become a hot commodity.

“I’m not sure the conditions will make it popular in the market, especially in a populated area,” he said.

Former supporters of a dispensary limit are now against it

It is not the first time Northampton councilors have debated dispensary limits.

Northampton had no pot shops in May 2018 when Nash and then-councillor Dennis Bidwell suggested capping the town at 10 retail locations. But it was only a matter of months before the first dispensary appeared on the horizon. Two councilors proposed the cap as a metaphorical “circuit breaker” – a limit that could always be raised if Northampton hit 10 dispensations and wanted more.

The measure failed by one vote.

Over the next four years, the local retail cannabis industry boomed. NETA opened on Koonz Street – one of the first two recreational dispensaries on the East Coast – and attracted thousands of customers in its busiest opening days. Then another pottery shop opened, and then 10 more.

But the market cooled off: In the first full fiscal year collecting local cannabis taxes, Northampton pulled in $1.6 million. The next year, the city collected about $1.4 million. Last year, it fell further to $1.15 million. There may be more dispensaries, but as shops open in Massachusetts and other states, they are generating less bulk sales. Across Massachusetts, cannabis revenue has been falling uniformly.

Nearly five years after limiting the number of dispensaries in the city, both Nash and Bidwell oppose a similar cap (though Bidwell no longer sits on the council).

Legal cannabis unlikely to reach Northampton youth, pair write in joint column Daily Hampshire Gazette on Monday. He argued that shops follow strict rules that prevent young people from simply walking in and buying a joint or an infused chocolate bar. And the rate at which youths in Northampton have used marijuana in the past month is at its lowest point in seven years, he said.

Bidwell and Nash called the recent effort to limit dispensaries an unnecessary overreach that would harm the regulated cannabis market.

Nash said during a city council session on January 9, “I worry that we are taking an industry that is doing right by us and sending a message – don’t come here, we have a limit, you You can take your money elsewhere.” ,

data dispute

Bidwell and Nash cited dropout rates of cannabis use among Northampton teens the same data that others have used to support the idea of ​​dispensary limits. The figures come from a survey by SPIFFY, a coalition of Hampshire county community organizations.

Based on a survey of Hampshire county youth, proponents of the data said it shows a correlation — though not causation — between the number of dispensaries in a town and how much teens in that community use cannabis.

City Councilwoman Rachel Maior, a co-sponsor of the dispensary limit, is one of many supporters of the measure who said her concern is partly driven by concerning data and warnings from local public health leaders.

Others have questioned whether the data actually show that dispensaries are driving up rates of cannabis use for teens in Northampton.

Robin Goldstein, a University of California Davis economist and Northampton native who studies cannabis economics, said the opening of dispensaries in Hampshire County hasn’t led to more cannabis use locally.

“Having more legal dispensaries in an area does not affect the total amount of cannabis consumed by youth or adults in that area – but it does mean that a higher proportion of cannabis is safe and potency-tested,” he told the city. told the councilor in an email on Wednesday.

The number of youths admitted to Culley Dickinson Hospital for cannabis-related issues dropped 38% in the three years after the dispensary entered town, Goldstein said, attributing the drop to the increased availability of safe, legal cannabis. Held responsible.

impact on downtown

Northampton’s downtown has several vacant storefronts. Former locations of Bruegger’s Bagels, Spoleto and Grub Sandwich Shop are just a few. In December, The Source — a dispensary that opened in March — joined the list.

Amy Cahillane, who represents downtown Northampton businesses as executive director of the Downtown Northampton Association, is against a limit on cannabis dispensaries. She told councilors on 9 January that the proposed limit would be “unnecessary regulation” at a time when the city center was still emerging from the depths of COVID-19.

Cahillane said, to limit businesses from coming to Northampton “would have to make a strange choice to close dispensaries and empty storefronts”.

Some dispensary limit supporters see it as a social justice measure. The cap will not apply to dispensaries designated by the state as social equity businesses. Northampton has a Social Equity dispensary – more than many other communities. Goldstein said the ordinance would do “little or nothing” to bring additional social equity dispensaries to the city. While a cap would not apply to those businesses, they would not receive any incentives or assistance from the city under this measure.

Ciara agreed. “While I appreciate the effort to make the market more equitable, the approach Northampton has taken so far, in particular not imposing a cap, has been cited as a beneficial approach to giving market room to social equity program applicants is recognised,” she said.

Maior stated that he is for cannabis legalization, but felt that a crackdown on Northampton’s cannabis market was necessary and would give the city more control over the industry.

“The state empowers municipalities to do this for a reason,” she said.