City of Somerville
Massachusetts

Agenda Item
209762
Work Completed
Jun 11, 2020 7:00 PM

That the City Solicitor draft language to amend the Adult Use Marijuana Ordinance to require full disclosure of all ownership interests, including names and percentage interest of all owners or shareholders.

Information

Department:City CouncilSponsors:Ward Five City Councilor Mark Niedergang, City Councilor At Large Stephanie Hirsch
Category:OrderPurposes:Order

Official Text

That the City Solicitor draft proposed language to amend the Marijuana Licensing Ordinance to require, in any application, full disclosure of all ownership interests, including names and percentage interest of all owners or shareholders in LLCs, corporations, or any other ownership entities.

 

Meeting History

Feb 25, 2020 7:00 PM Video City Council Regular Meeting

Councilor Niedergang said that the Licensing Commission is often unable to identify the actual applicants applying for marijuana licenses, as the applications are submitted by LLCs or corporations. He said it's important to know exactly who owns these licenses.

RESULT:APPROVED
May 7, 2020 6:00 PM Video Legislative Matters Committee Committee Meeting

Councilor McLaughlin, as acting mayor on marijuana policy, recused himself from all discussion and votes on this item.

Councilor Niedergang stated that it’s difficult to know who is behind applications for the sale of marijuana and he would like better transparency to determine who has a stake in a particular business and at what percentage as well as where stakeholders live. He would like the ordinance to require that information, to the extent allowed by law. Mr. Proakis said that the goal is to make the information available and he has no objection to collecting it if it can be obtained. Chair Davis noted that the application requires the information, but it goes into a ‘black box’ where it’s shielded from public view. He believes that a better job needs to be done to make the information available to the public at the earliest possible phase in the process.

Ms. Leis told the members that so far, information received has not been published but staff can set it up so that information is published as it comes in, with the exception of some data, e.g., account numbers, SSN, etc.. Mr. Proakis thinks it best to redact and publish information prior to the application reaching the Licensing Commission and noted that there is much concern in the industry about where funds are coming from to ensure that economic empowerments get fair treatment. Chair Davis responded that the city should make application information available to the public as a matter of policy because it’s the right thing to do in the interest of transparency, not because people are likely to submit Freedom of Information Act Requests anyway.

Councilor Niedergang would also like the city to use whatever legal power it has to unwrap the ownership of businesses applying for licenses to sell marijuana. Ms. Leis noted that all individuals owning a certain minimum percentage of a business must be disclosed on the application to the state Cannabis Control Commission (CCC) and that the city’s ordinance references those CCC requirements. Chair Davis requested that Mr. Shapiro determine to what extent, (in the ordinance), the city may directly require disclosure of certain information and whether an individual ownership provision is something that may be codified in the city's ordinance, rather than relying on the CCC requirements.

RESULT:KEPT IN COMMITTEE
May 21, 2020 6:00 PM Video Legislative Matters Committee Committee Meeting

Councilor McLaughlin was recused from all discussion and votes on this item.

Mr. Proakis spoke about the amendments to the ordinance and explained their impact. Ms. Leis spoke about the meaning of "close associate" and said that the definition came from the state law. She also informed the members that information has been posted on the city’s website, <https://www.somervillema.gov/departments/programs/adult-use-marijuana>

Chair Davis noted that the ultimate impact of this amendment is that this information will now have to be provided to the city when an application is filed. Councilor Niedergang stated that he thinks making information public should be stated in the ordinance.

Of the three applicants so far, one is an empowerment applicant who’s space is in a prominent person's property. How can the city be sure it’s getting information on all owners of 10% or more in a business? Mr. Proakis said it’s difficult to say if a property owner is getting an interest in a business, but he will revisit the matter to see to what extent this information may be made public. Councilor Ewen-Campen pointed out that the Licensing Commission has subpoena power that might allow them to dig deeper into ownership. Mr. Shapiro will look into this.

Chair Davis would like a revision ready by the next committee meeting, saying that ownership will be made public.

RESULT:KEPT IN COMMITTEE
Jun 4, 2020 6:00 PM Video Legislative Matters Committee Committee Meeting

Councilor McLaughlin, as acting mayor for marijuana issues, was recused from all discussion and votes on this item.

Mr. Shapiro reviewed the changes to the ordinance and informed the committee that the 2-year priority limit is being challenged in Cambridge. Councilor Niedergang has a concern that a property owner might have a financial interest in a business, for example, after lending start up money to a business in exchange for a piece of the ownership down the line, thereby giving the property owner an undisclosed ownership stake in the business. Mr. Shapiro added language to close that loophole so that the interests of wealthy business people interest in a marijuana business must be disclosed.

Chair Davis’ motion to replace the draft before the committee with the draft presented to the committee this evening was approved on a Roll Call vote of 4 in favor (Councilors Clingan, Ewen Campen, Niedergang and Davis), none against and 1 recused (Councilor McLaughlin).

Councilor Niedergang’s motion to amend the draft by adding the language provided by Mr. Shapiro was approved on a Roll Call vote of 4 in favor (Councilors Clingan, Ewen Campen, Niedergang and Davis), none against and 1 recused (Councilor McLaughlin).

Councilor Davis’s motion to approve the item, as amended, was approved on a Roll Call vote of 4 in favor (Councilors Clingan, Ewen Campen, Niedergang and Davis), none against and 1 recused (Councilor McLaughlin). This vote is moot since the item is before the committee for discussion. A new version, containing all amendments made, will be presented and voted on at the City Council meeting on June 11, 2020.

RESULT:WORK COMPLETED
Jun 11, 2020 7:00 PM Video City Council Regular Meeting
RESULT:WORK COMPLETED