HOW STATE MARIJUANA LEGALIZATION BECAME A BOON FOR CORRUPTION

Almost all the states that legalized pot either require the approval of local officials – as in Massachusetts — or impose a statewide limit on the number of licenses, chosen by a politically appointed oversight board, or both.

Correia’s indictment alleges that he extorted hundreds of thousands of dollars from marijuana companies in exchange for granting them the local approval letters that are necessary prerequisites for obtaining Massachusetts licenses.

Allegations of corruption have reached the state level in numerous marijuana programs, especially ones in which a small group of commissioners are charged with dispensing limited numbers of licenses.

“The state Is given full control in an industry where there is so much competition — where everyone realizes how valuable these licenses are,” said Lorenzo Nourafchan, CEO of Northstar Financial Consulting, which works with cannabis businesses.

Nourafchan cited some friends who submitted “incredible applications” for Missouri medical marijuana licenses only to see the licenses go to large, multi-state operators: “It just seemed to me and many others that it was not fair … people were not given objective and unbiased treatment.”

Paying for police and restoring artwork When advocates seek to legalize marijuana, whether through a ballot initiative or through the state legislature, there is typically a corresponding demand that local communities be given a say in whether a dispensary will be set up shop in their towns.

Not only are cannabis companies required to have a letter of support from municipalities to get a state license, they must also have a “host community agreement,” which allows for a “community impact fee” of not more than 3 percent of gross sales of the cannabis business.

These special benefits – particularly the police details – seemed to run afoul of the state’s commitment to right past wrongs of marijuana enforcement, which was the thinking behind a requirement that cannabis businesses have a “Positive Impact Plan” in order to help areas that were disproportionately targeted by marijuana enforcement.

Local control is “the biggest mistake that we made,” said Massachusetts Cannabis Control Commissioner Shaleen Title at a Boston University conference on marijuana law.

Oklahoma’s medical marijuana market is looking more like California’s cannabis heyday when small operators didn’t have to contend with the exorbitant costs of compliance.

California, on the other hand, is contending with the same forces that gave rise to Correia’s alleged crimes in Massachusetts: local control.

Since California voters approved adult-use legalization in 2016, giving municipal governments near-total control of the approval process, many longtime medical marijuana and underground operators struggled to enter the industry.

Politico

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