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SJC-13010

MEDERI, INC. vs. CITY OF SALEM & another.1

Essex. February 3, 2021. - July 30, 2021.

Present: Budd, C.J., Gaziano, Lowy, Cypher, Kafker, Wendlandt,

& Georges, JJ.

Marijuana. License. Municipal Corporations, By-laws and

ordinances, Contracts, Marijuana. Contract, Municipality.
Mandamus. Practice, Civil, Action in nature of mandamus,
Action in nature of certiorari, Motion to dismiss, Judgment
on the pleadings. Regulation.

Civil action commenced in the Superior Court Department on

December 21, 2018.

A motion to dismiss was heard by Timothy Q. Feeley, J.; and

the case was heard by Jeffrey T. Karp, J., on motions for
judgment on the pleadings.

The Supreme Judicial Court on its own initiative

transferred the case from the Appeals Court.

William H. Sheehan, III, for the plaintiff.

Victoria B. Caldwell, Assistant City Solicitor, for the
defendants.
Christine A. Baily, Special Assistant Attorney General, for
Cannabis Control Commission, amicus curiae, submitted a brief.

1 Mayor of Salem.
 2

BUDD, C.J. Since the sale and recreational use of

marijuana became legal in the Commonwealth in 2016 pursuant to

St. 2016, c. 334, entities seeking to open retail marijuana

establishments and their prospective host communities have

grappled with that statute as subsequently amended, along with

the accompanying regulations promulgated by the Cannabis Control

Commission (commission). In this case, the parties are at odds

over (1) a municipality's role in deciding who is granted a

license to sell marijuana; and (2) the restrictions, if any,

that apply when a municipality is choosing between applicants

for a retail marijuana license.

Mederi, Inc. (Mederi), sued the city of Salem (city),

contending that by rejecting Mederi as a host community

agreement (HCA) partner, the city effectively precluded Mederi

from being considered for a license to sell marijuana because

securing an HCA is necessary prior to applying to the commission

for a license. Mederi also claims that the city's process was

arbitrary or capricious and contrary to law. Mederi's suit did

not survive the combination of orders allowing the city's motion

to dismiss and motion for judgment on the pleadings filed ad

seriatim. Before us is Mederi's appeal, which we transferred to

this court on our own motion. Although we observe that the

interplay between the statute and the regulations may have led
 3

to consequences perhaps not contemplated by the Legislature or

the commission, we nevertheless conclude that Mederi's claims

properly were denied, and thus affirm the decision.2

Background. 1. Statutory and regulatory framework. In

2016, Massachusetts voters approved the Regulation and Taxation

of Marijuana Act, St. 2016, c. 334, codified at G. L. c. 94G,

§§ 1 et seq., and amended the following year by St. 2017, c. 55,

entitled "An Act to ensure safe access to marijuana"

(recreational marijuana act). Chapter 94G provides for, among

other things, the sale of marijuana to adults for recreational

use and empowers the commission to oversee and regulate the use

and distribution of recreational marijuana. See G. L. c. 94G,

§ 4. The Legislature tasked the commission with regulating the

Commonwealth's new marijuana industry by, among other

responsibilities, issuing licenses to prospective marijuana

establishments.3 Id.

The commission reviews licensing applications "on a rolling

basis." 935 Code Mass. Regs. § 500.102(1)(a) (2021). In doing

so, it prioritizes the review of applications from licensed

We acknowledge the amicus brief submitted by the Cannabis

2

Control Commission (commission).

A "marijuana establishment" is "a marijuana cultivator,

3

independent testing laboratory, marijuana product manufacturer,

marijuana retailer or any other type of licensed marijuana-
related business." G. L. c. 94G, § 1.
 4

marijuana treatment centers that seek to convert to retail

marijuana establishments as well as economic empowerment

priority applicants. 935 Code Mass. Regs. §§ 500.101(4),

500.102(2)(a) (2021). Economic empowerment priority applicants

are, broadly speaking, those applicants from communities that

have been disproportionately harmed by marijuana law enforcement

(particularly Black, Hispanic, and Latino communities). 935

Code Mass. Regs. § 500.002 (2021). The commission statutorily

is required to prioritize such applicants. See St. 2017, c. 55,

§ 56 (a) (ii); G. L. c. 94G, § 4 (a 1/2) (iv) (commission must

adopt "procedures and policies to promote and encourage full

participation in the regulated marijuana industry by people from

communities that have previously been disproportionately harmed

by marijuana prohibition and enforcement and to positively

impact those communities").4 Likewise, qualifying applicants or

licensees are eligible to receive training in, among other

things, management, industry best practices, accounting and

sales forecasting, and tax compliance. 935 Code Mass. Regs.

§ 500.105(17) (2021).5

4 This requirement demonstrates the Legislature's intent to

assist through retail-marijuana legislation communities
disproportionately affected by enforcement of marijuana crimes.

5 Individuals other than owners of economic empowerment

priority applicants may qualify for these services. To qualify,
an individual must meet certain criteria showing, generally,
 5

Chapter 94G gives municipalities the power to regulate the

operation of recreational marijuana establishments within their

borders, including the ability to adopt ordinances governing the

total number of such establishments, as well as the time, place,

and manner of marijuana sales (with certain exceptions) as long

as the ordinances do not conflict with the provisions of c. 94G.

See G. L. c. 94G, § 3 (a).

Chapter 94G also allows municipalities to determine the

conditions under which they are willing to "host" retail

marijuana establishments. G. L. c. 94G, § 3 (d). The relevant

section provides, in pertinent part:

"A marijuana establishment . . . shall execute an agreement

with the host community setting forth the conditions to
have a marijuana establishment . . . located within the
host community which shall include . . . all stipulations
of responsibilities between the host community and the
marijuana establishment . . . ."

Id. Municipalities may charge marijuana establishments a

"community impact fee" that, among other requirements, does not

exceed three percent of the marijuana establishment's gross

sales. Id.

Although the commission's regulations are silent on the

process of negotiating an HCA, in a nonbinding guidance

that they have been disproportionately affected, reside in a

community so affected, or have experience serving populations so
affected by prior enforcement of the marijuana laws. 935 Code
Mass. Regs. § 500.105(17)(b).
 6

document, the commission states that it "encourages

municipalities to carefully consider the impact of the

particular marijuana establishment proposed for a community, as

well as benefits it may bring in local revenue and employment,

when negotiating [an HCA]."

An applicant must provide the commission with proof of an

HCA as part of its application for a license. 935 Code Mass.

Regs. § 500.101(1)(a)(8) (2021).

2. The city's HCA application process. Pursuant to G. L.

c. 94G, § 3 (a) (2), the city passed an ordinance limiting the

maximum number of marijuana retail establishments within the

city to five. The city published guidelines explaining the HCA

application process, including the minimum requirements

necessary to apply. Among other things, applicants were

required to submit business plans and to describe any prior

experience managing a marijuana business. They also were

required to provide documentation of their financial solvency;

detailed information regarding the proposed location of the

retail establishment, including traffic and security plans; and

a copy of a special permit issued by the city's zoning board of

 7

appeals or evidence of site control of the proposed location for

the establishment.6

The guidelines also listed the following favorable criteria

that would be considered:

"(a) Demonstrated direct experience in the cannabis

industry or a similar industry. (b) Managers, directors,
officers, investors, and others related to the
establishment are free of any disqualifying criminal
convictions. (c) Minimal traffic impacts and appropriate
mitigation for impacts is offered. (d) Approval of
security plan by Chief of Police. (e) Financial records,
business plan, and other documentation demonstrates strong
capitalization or access to financing to ensure success of
business. (f) Geographic diversity of the establishment in
relation to other established or permitted marijuana retail
establishments."

A review committee was established to evaluate the applications

and provide recommendations to the mayor, who would make the

final determination whether to enter into an HCA with a

particular applicant.

3. Facts and procedural posture. We summarize the

relevant facts taken from the record, reserving certain details

for later discussion. In September 2018, Mederi applied for an

6 "Site control" may be accomplished by purchase or lease of

the property. Under section 6.10.7(3) of the city's ordinance,
an applicant for a special permit to operate a marijuana
establishment "shall submit proof of site control and right to
use the premises proposed for the marijuana establishment and
may include a deed, notarized statement from the property owner
and a copy of the lease agreement, or real estate contract
contingent upon successful licensing, or a letter of intent by
the owner of the premises indicating intent to lease the
premises to the petitioner contingent upon successful
permitting."
 8

HCA with the city to open a retail marijuana establishment on

Highland Avenue in Salem. At the time Mederi applied, there

were a total of eight applicants vying for four then-available

slots.7 In addition to meeting all of the city's stated

requirements, Mederi made extra property tax payments at the

city's request.

In December 2018, after the city informed Mederi that it

had "not been chosen to advance to the next round of

consideration," Mederi filed a two-count complaint in the

Superior Court seeking relief in the nature of mandamus, i.e.,

an order requiring the city to enter into an HCA with Mederi, as

well as certiorari review of the city's rejection of Mederi's

application.8 A Superior Court judge (first motion judge)

dismissed the mandamus claim in an order allowing the city's

motion to dismiss the complaint. Thereafter, both parties moved

7 The other applicants were Atlantic Medicinal Partners,

Inc. (Atlantic Medicinal); I.N.S.A, Inc., doing business as INSA
Salem (INSA); NS Alternatives LLC (NS Alternatives); Sanctuary
Medicinals, Inc.; CTDW, LLC, doing business as Seagrass
(Seagrass); Terpene Journey, LLC; and Witch City Gardens, LLC
(Witch City Gardens).

8 While the city's motion to dismiss was under advisement,

Mederi filed an amended complaint, which added a third count
naming the commission as a defendant and seeking an injunction
preventing the commission from issuing a license for a retail
marijuana establishment to operate in the city without
considering an application from Mederi. This additional count
subsequently was dismissed, and Mederi did not appeal from that
decision.
 9

for judgment on the pleadings on the remaining certiorari claim.

After a hearing, a different Superior Court judge (second motion

judge) allowed the city's motion. We transferred Mederi's

timely appeal to this court on our own motion.

Discussion. 1. Mederi's claims for relief. Mederi

contends that the first motion judge erred in dismissing the

first count of his complaint (mandamus) and, in the alternative,

that the second motion judge erred in allowing the city's motion

for judgment on the pleadings on his remaining certiorari claim.

We are not convinced.

a. Mandamus. Mederi argues that it was error to reject

its claim for mandamus relief. We disagree. A request for

relief in the nature of mandamus is "a call to a government

official to perform a clear cut duty" (citation omitted).

Simmons v. Clerk-Magistrate of the Boston Div. of the Hous.

Court Dep't, 448 Mass. 57, 59-60 (2006). See Johnson v.

District Attorney for the N. Dist., 342 Mass. 212, 214-215

(1961) (mandamus proper where district attorney refused to

comply with personnel board's decision to reinstate petitioner

as special messenger, because statute at issue "impose[d] a

clear duty upon the [district attorney] to comply with the

board's decision"); Strong, petitioner, 20 Pick. 484, 497-498

(1838) (mandamus proper remedy where board of examiners refused

to give petitioner –- duly elected as county commissioner –-

 10

certificate of his election, because "counting the votes, and

ascertaining the majorities and giving certificates of the

result, are mere ministerial acts"). Further, "even if the act

sought to be compelled is ministerial in nature, relief in the

nature of mandamus is extraordinary and may not be granted

except to prevent a failure of justice in instances where there

is no other adequate remedy." Lutheran Serv. Ass'n of New

England v. Metropolitan Dist. Comm'n, 397 Mass. 341, 344 (1986)

(Lutheran Serv. Ass'n). See Anzalone v. Administrative Office

of the Trial Court, 457 Mass. 647, 655 (2010) (mandamus is "an

extraordinary remedy, invoked sparingly by the court in its

discretion").

Because an HCA is a prerequisite to applying to the

commission for a license to sell recreational marijuana, 935

Code Mass. Regs. § 500.101(1)(a)(8), Mederi contends that a

municipality's role in the regulatory structure is necessarily

ministerial. Otherwise, Mederi contends, the municipality,

rather than the commission, has the power to decide which

entities may be considered for a license.

Here, Mederi claims that once it presented its application

complete with all of the required documentation, and

demonstrated its intention to accept the city's conditions, the

city was required to execute an HCA with Mederi. Mederi

 11

contends that because the city failed to do so, mandamus relief

is appropriate. This argument fails.

Nothing in G. L. c. 94G, § 3, imposes a duty on a city or

town to enter into an HCA with a prospective recreational

marijuana establishment simply because that establishment is

able to fulfill the municipality's HCA requirements. Indeed,

G. L. c. 94G, § 3 (d), the provision governing HCAs, merely

provides that a prospective marijuana establishment must enter

into an HCA with a host community before it can operate. That

provision contemplates a negotiation between the host community

and the applicant, stating that the HCA must include "all

stipulations of responsibilities between the host community and

the marijuana establishment." Id.

Further, no city ordinance requires the city to enter into

an HCA with every applicant that meets the city's conditions for

operating a retail marijuana business in the community.9 This

makes sense, because an "agreement," i.e., a "manifestation of

mutual assent by two or more [parties]," see Black's Law

Dictionary 84 (11th ed. 2019), requires each party to opt in --

an inherently discretionary act.

9 We note, however, that a city or town may not bar the

operation of retail marijuana establishments within the
municipality altogether. See G. L. c. 94G, § 3 (a) (2) (i).
 12

Because a municipality may use its discretion in

determining whether to enter into an HCA with a prospective

retail establishment, mandamus relief is not available to

Mederi.10 See Boston Med. Ctr. Corp. v. Secretary of the Exec.

Office of Health & Human Servs., 463 Mass. 447, 470 (2012)

(mandamus "is not an appropriate remedy to obtain a review of

the decision of public officers who have acted and to command

them to act in a new and different manner" [citation omitted]).

See also Lutheran Service Ass'n, 397 Mass. at 344 ("a court may

not compel performance of a discretionary act").

b. Certiorari. In the alternative, Mederi argues that the

second motion judge erred by allowing the city's motion for

judgment on the pleadings on Mederi's certiorari claim. See

Mass. R. Civ. P. 12 (c), 365 Mass. 754 (1974). We review

10In support of its position, Mederi relies on Clear

Channel Outdoor, Inc. v. Zoning Bd. of Appeals of Salisbury, 94
Mass. App. Ct. 594 (2018) (Clear Channel). There, the Appeals
Court held that the zoning board of appeals of Salisbury
circumvented a process imposed by regulation for the approval of
billboards by granting a special permit to only one of two
applicants, improperly eliminating the power of the Department
of Transportation to select one billboard for approval. Id. at
595-596. That case, however, is inapposite. The plaintiff in
Clear Channel sought judicial review pursuant to G. L. c. 40A,
§ 17, not mandamus relief. Id. at 596. A claim for mandamus
relief would have failed (just as Mederi's claim fails here), as
the Appeals Court explicitly noted that the board's role in
granting a special permit had a discretionary component. Id. at
600. See Lutheran Serv. Ass'n, 397 Mass. at 344 ("a court may
not compel performance of a discretionary act").
 13

appeals from such orders de novo. UBS Fin. Servs., Inc. v.

Aliberti, 483 Mass. 396, 405 (2019).

A claim in the nature of certiorari pursuant to G. L.

c. 249, § 4, provides for judicial review of administrative

proceedings "where such oversight is not otherwise provided by

statute." Yerardi's Moody St. Restaurant & Lounge, Inc. v.

Selectmen of Randolph, 19 Mass. App. Ct. 296, 300 (1985). The

standard of review for a certiorari action depends on the nature

of the action for which review is sought. Revere v.

Massachusetts Gaming Comm'n, 476 Mass. 591, 604 (2017), and

cases cited. "[W]here the action being reviewed is a decision

made in an adjudicatory proceeding where evidence is presented

and due process protections are afforded, a court applies the

'substantial evidence' standard." Id. at 604-605, quoting Figgs

v. Boston Hous. Auth., 469 Mass. 354, 361-362 (2014). However,

where, as here, the decision being reviewed implicates the

exercise of administrative discretion, the court applies the

"arbitrary or capricious" standard, which is more deferential to

the party defending the administrative action it took. Revere,

supra at 605. See Attorney Gen. v. Sheriff of Worcester County,

382 Mass. 57, 62 (1980). This standard requires only that there

be a rational basis for the decision. Attorney Gen., supra.

See Garrity v. Conservation Comm'n of Hingham, 462 Mass. 779,

792 (2012) ("A decision is not arbitrary and capricious unless

 14

there is no ground which 'reasonable [persons] might deem

proper' to support it" [citation omitted]).

In support of Mederi's claim for certiorari relief are

arguments that fall into two broad categories. Mederi maintains

that (1) the city failed properly to evaluate Mederi's

application according to the criteria set out in the published

guidelines, and (2) the application process itself was unlawful.

i. Evaluation of HCA applications. When Mederi submitted

its application for an HCA, it was one of eight applicants vying

for four then-available slots.11 As discussed supra, in

evaluating applications for HCAs, the review committee

considered criteria relating to experience in the marijuana

industry, financial stability, geographic diversity, traffic

impact, and the applicant's security plan. Mederi claims that

based upon these criteria, its application was as strong as, or

stronger than, the applications of those entities that were

ultimately selected. Even assuming this to be true, the

decision not to select Mederi cannot be characterized as either

arbitrary or capricious.

The review committee considered Mederi's application along

with the applications of seven other entities: Atlantic

11A fifth slot had already been filled by an entity

previously licensed to distribute marijuana for medicinal
purposes. See 935 Code Mass. Regs. § 500.101(4).
 15

Medicinal Partners, Inc. (Atlantic Medicinal); I.N.S.A., Inc.,

doing business as INSA Salem (INSA); NS Alternatives LLC (NS

Alternatives); Sanctuary Medicinals, Inc. (Sanctuary

Medicinals); CTDW, LLC, doing business as Seagrass (Seagrass);

Terpene Journey, LLC (Terpene Journey); and Witch City Gardens,

LLC (Witch City Gardens). The committee concluded that Atlantic

Medicinal, NS Alternatives, Seagrass, and INSA had the strongest

proposals because they "appeared to be the strongest positioned

to open, succeed, and provide minimal or manageable impact to

the surrounding neighborhood." The committee explained its

reasoning thoroughly in a memorandum to the mayor:

"All four offered strong evidence of capitalization, with

detailed business plans demonstrating realistic projections
of growth and costs. All four also came with the strong
endorsements for their site security plans by the Police
Department . . . . With the exception of INSA, the
companies will have secured, indoor delivery areas for
their products. As delivery of product would be by van-
sized vehicles, Atlantic and Seagrass'[s] proposals would
eliminate larger truck deliveries to those locations
. . . . Atlantic and INSA's general distance from
residences was also advantageous. Lastly, INSA, Seagrass,
and NS Alternatives involve teams who have successfully
been engaged in the cannabis industry . . . and
demonstrated substantial familiarity with the industry."

The review committee recognized that Mederi's application

was "not without merits," as it would improve the condition of a

"blighted commercial property" and "would serve a separate area

of customers from other proposed companies, contributing to

. . . geographic diversity." However, the committee considered

 16

the applications of Mederi, Terpene Journey, and Sanctuary

Medicinals to be "not as strong as the others."12 Mederi, for

instance, lacked "sufficient capitalization" and "direct

experience in the industry." It also was one of five applicants

seeking to operate on Highland Avenue.

The city ultimately chose to enter into HCAs with INSA,

Witch City Gardens, Seagrass, and Atlantic Medicinal.13 Because

the city had a rational basis for choosing these applicants, its

decision not to enter into an HCA with Mederi was neither

arbitrary nor capricious. See Attorney Gen., 382 Mass. at 62.

Based on the high number of applicants on Highland Avenue, the

city ultimately selected two applicants that planned to locate

on that street –- Atlantic Medicinal and INSA –- that, in its

view, had stronger proposals than Mederi.

Notably, and as the review committee recognized in its

memorandum, the executives at INSA had extensive experience

12As for Witch City Gardens, the review committee concluded

that its application was "mixed." For example, although the
committee found that the proposed location would create
geographic diversity vis-à-vis other marijuana establishments,
and would "contribut[e] to an improvement to the streetscape and
neighborhood," the committee also noted that the Witch City
Gardens team had no experience in the cannabis industry.

13The city also attempted to negotiate an HCA with NS

Alternatives. The record does not show why those negotiations
did not result in an HCA, nor does it show why the city entered
into an HCA with Witch City Gardens despite its "mixed
application."
 17

within the marijuana industry, whereas Mederi's chief executive

officer had less than one year of direct experience as a

licensed medical marijuana caregiver in Maine. Further, the

committee determined that Atlantic Medicinal and INSA provided

evidence of "ample" and "very strong" capitalization and

submitted business plans that projected "conservative and

reasonable" revenue growth. By contrast, the committee

expressed concerns about Mederi's financial strength and its

"sole capitalization" consisting of a private investor from New

Jersey who had not yet completed "due diligence."

Although Mederi may quibble with the city's reasoning and

disagree with the city's ultimate course of action, there is no

evidence that the city's decision was "either based on a legally

untenable ground or [was] unreasonable, arbitrary, or

capricious." Forsyth Sch. for Dental Hygienists v. Board of

Registration in Dentistry, 404 Mass. 211, 219 (1989). The city

made a rational choice to forgo Mederi's application in favor of

other prospective retail marijuana establishments to bolster the

geographical diversity of retail marijuana establishments

throughout the city.14

14Mederi also takes issue with the city not requiring

certain applicants to submit criminal offender record
information (CORI) forms with their initial applications.
However, it appears that the city did not run any CORI checks
until after it selected the leading applicants. Thus, the city
 18

ii. Unlawful process. Mederi contends that the city's

application process was contrary to law, and therefore the

results should be nullified. Pointing out that each of the

successful applicants had promised to provide the city with

additional benefits, financial and otherwise, if granted an HCA,

Mederi argues that because it offered less financial and

charitable incentives than did other applicants, it was not

chosen.15 That is, Mederi alleges that the city's selections were

predicated on an unlawful "pay-to-play" scheme.

The record does not support Mederi's claim, as another of the

applicants not selected, Terpene Journey, offered to provide

significant additional financial benefits if it were granted an

HCA. Terpene Journey offered to donate up to ten percent of its

annual profits to a fund to address local issues such as traffic

and homelessness, at least $10,000 per year to youth prevention

initiatives, and $50,000 to the North Shore Alliance of GLBTQ

treated all applicants equally with respect to their criminal

record information.

Atlantic Medicinal offered to pay $60,000 to the city's

15

general fund, among other donations; Seagrass agreed to pay the

city an additional amount of from one and one-half to two percent
of gross sales, among other donations; INSA offered to provide
various charitable services, including participating in community
safety, employment, and environmental initiatives, as well as drug
awareness education; and Witch City Gardens offered to host
conferences, seminars and drug awareness programs in the city. In
contrast, Mederi offered to improve the appearance of its property
and to purchase and improve the adjacent property as well.
 19

Youth. In contrast, Witch City Gardens and INSA, with whom the

city entered into HCAs, did not offer any additional direct

pecuniary benefit. See note 15, supra. Mederi presents no

credible evidence that the city based its decisions on the

additional benefits that the applicants offered if selected.16

Mederi also claims that the city used the HCA application

process improperly to persuade Mederi to make additional

payments to cover certain property taxes. Specifically, Mederi

alleges that the city, expressing concern over the delinquent

real estate taxes owed by the owner of 250 Highland Avenue and

the adjacent property at 260 Highland Avenue, suggested that

Mederi gain site control over both properties. Mederi

purportedly made payments to the owner of both 250 and 260

Highland Avenue, allowing the owner to pay off the overdue taxes

on one of the properties. There is no reason to believe that

these events had an impact on the city's decision not to execute

an HCA with Mederi. We therefore discern no unlawful,

16 As there is no evidence that the city made its selections

based on anything other than its own guidelines, we need not
consider further Mederi's allegation that the city engaged in a
"pay-to-play" scheme. However, we note that the regulations do not
prohibit a municipality from choosing HCA partners based on the
unsolicited benefits they agree to provide to the community.
 20

arbitrary, or capricious action in the city's recommendation

that Mederi obtain site control of 260 Highland Avenue.17

Mederi further challenges the city's HCA fee terms, arguing

that the city improperly charged HCA recipients in excess of the

community impact fee allowed by law. Although this is an issue of

concern, as discussed infra, Mederi does not have standing to

contest the city's HCA fees because it never executed an HCA with

the city. "A party has standing when it can allege an injury

within the area of concern of the statute or regulatory scheme

under which the injurious action has occurred" (citation omitted).

Revere, 476 Mass. at 607. Mederi has not been required to pay

these additional fees because it has not executed an HCA with the

city; it therefore has suffered no cognizable injury.

Thus, on this record Mederi has failed to sustain its heavy

burden to demonstrate that the city acted arbitrarily or

capriciously in its decision-making process. See Attorney Gen.,

382 Mass. at 62.

2. Observations regarding the statutory and regulatory

framework. For the reasons explained supra, we affirm the Superior

Court's dismissal of Mederi's suit. However, the issues raised

reveal potential inconsistencies in the interplay between G. L.

17Although Mederi apparently believes that it was misled,

it does not argue that the city promised Mederi a slot in
exchange for the tax payments.
 21

c. 94G and the regulations promulgated to implement at least one of

its implied goals, i.e., making the Commonwealth's marijuana

industry equitable.

The statutory scheme requires the commission to prioritize

applicants that will benefit communities disproportionately

affected by the enforcement of prior laws prohibiting marijuana

sales and distribution. Pursuant to c. 94G, the commission must

adopt "procedures and policies to promote and encourage full

participation in the regulated marijuana industry by people from

communities that have previously been disproportionately harmed by

marijuana prohibition and enforcement and to positively impact

those communities." G. L. c. 94G, § 4 (a 1/2) (iv). To this end,

the recreational marijuana act requires "prioritiz[ing] review and

licensing decisions for applicants . . . who . . . demonstrate

experience in or business practices that promote economic

empowerment in communities disproportionately impacted by high

rates of arrest and incarceration for offenses under [the

Commonwealth's controlled substances act, G. L. c. 94C]." St.

2017, c. 55, § 56 (a) (ii). See 935 Code Mass. Regs.

§ 500.102(2)(a).

We observe, however, that in practice the commission's

regulations may fall short of accomplishing this goal. The

regulations call for economic empowerment priority applicants to

receive "[p]riority application review" by the commission. 935

 22

Code Mass. Regs. § 500.102(2)(a). However, because municipalities,

as the de facto gatekeepers to such priority application review,

are not required to consider whether any entity seeking to enter

into an HCA is an economic empowerment priority applicant, such

applicants may receive no commission review at all.18

Further, although we conclude that Mederi does not have

standing to contest the payments the city requires of its HCA

partners in excess of the community impact fee, see G. L. c. 94G,

§ 3 (d), we acknowledge the concern raised. The applicable

statutory provisions and regulations are silent with respect to

whether municipalities may mandate such payments; viable arguments

may be made on both sides of the issue.19 Regardless, the practice

of requiring HCA partners to make payments in addition to the

18 We also note that because the commission considers

applications on a rolling basis, 935 Code Mass. Regs.
§ 500.102(1)(a), it may be unable to give priority review to
economic empowerment priority applicants if such applicants do not
win (or at least place) in the race to present a completed
application to the commission.

19 We note, however, that it is the commission's position

that, under the current statutory scheme, its role is limited to
reviewing license applications after an HCA has been executed. See
G. L. c. 94G, §§ 3 (d), 5 (b) (1); 935 Code Mass. Regs.
§ 500.101(1)(a)(8). In 2019, the commission voted to ask the
Legislature for authority to review the details of HCAs. In
2020, the House of Representatives passed a legislative proposal
that would have given the commission authority to review HCAs
and additionally would have clarified that municipalities may
not impose or consider fees other than the community impact fee.
2020 House Doc. No. 4398. The Senate did not pass the
legislative proposal.
 23

community impact fee has the potential to create an unfair

advantage for municipalities and better-funded applicants.

Importantly, it also may create a barrier to entry for prospective

economic empowerment priority applicants.

Implementing the framework governing the new recreational

marijuana industry has revealed gaps that the Legislature and

commission likely did not anticipate. Closing those gaps would

provide much-needed clarity.

Judgment affirmed.