U.S. Attorney's Office Investigates Brookline Marijuana Contracts

BROOKLINE, MA — The U.S. Attorney's office asked Brookline, Newton and several other communities across the commonwealth to turn over documents related to agreements they signed with marijuana retailers as part of a federal grand jury inquiry. The investigation is an effort by federal prosecutors to crack down on potential corruption at the local level in the state's newly-legalized recreational marijuana industry, on the heels of a scandal in Fall River.

"I can confirm that a copy of a subpoena addressed to the 'City of Brookline' seeking documents pertaining to marijuana retailer license applicants was received on October 31. The return date is November 14," said Brookline Town Counsel Joslin Murphy in an email to Patch. Brookline, of course, is not a city.

As part of the licensing procedure at the local level, the recreational cannabis retailer must work together on and then sign a Host Community Agreement. The agreements have been controversial, as they typically require the retailer to make payments to the host community.

State law is murky on what is and is not acceptable. The state says municipalities can only collect up to 3 percent of revenue for five years, and that the money be used to offset impact related to hosting the stores. But communities have argued the law does not prevent them from collecting separate fees or requiring the retailers to make donations.

In Brookline, for example NETA agreed to pay the town 3 percent of the store’s medical and recreational marijuana revenues. Since opening for medical in February 2016, NETA has contributed approximately $1.4 million. The town is just starting to talk about distributing that. NETA said it also volunteered to make annual donations to a local charity. So far, it has donated some $875,000 to the Brookline Community Foundation, regularly has crews out picking up trash around Brookline Village and has a philanthropic branch dedicated to helping local organizations.

A spokesperson for the U.S. Attorney's office declined comment Tuesday to Patch. But the Boston Globe reported that the office is reaching out for a range of documents related to the agreements, including unsigned drafts of the agreements, emails and other communications between officials and the applicant, as well as among officials, documents about municipal employees trying to secure marijuana retailers or who have gone on to work in the industry and minutes from meetings where host agreements were discussed.

The probe is far-reaching. The newspaper said Great Barrington, Eastham, Leicester, Northampton, and Uxbridge have all received the subpoenas, and that there are likely other communities being asked to turn over the documents. Newton confirmed to Patch that they, too had received a subpoena.

In September, the U.S. Attorney's office charged Fall River Mayor Jasiel Correia with extorting marijuana vendors for more than $600,000 to secure a host agreement. Federal prosecutors said at one point he accepted $75,000 in the backseat of a car for the letter of non-opposition one retailer needed for their state license.

-Additional reporting from Dave Copeland/ Patch Staff.