On Monday, August 24, Mashpee selectmen unanimously approved a host agreement with Aspen Blue LLC, a Rhode Island company seeking to open a marijuana cultivation and manufacturing facility in town.
The agreement includes a biannual payment to the town equal to 3 percent of gross revenue from the sales generated by the facility, as well as an annual $25,000 contribution to nonprofit entities for education and drug abuse prevention programs.
Selectman Andrew R. Gottlieb questioned how the company came to the decision to include the $25,000 contribution for drug abuse prevention in the host agreement.
“What led you to propose a donation of that amount to drug abuse?” Mr. Gottlieb asked. “Were you asked to do it by the town?”
Matthew Wilkes, the company’s interim chief financial officer, said the $25,000 contribution was the company’s proposal and that the company felt no pressure from the town to include the contribution for drug abuse prevention.
Mark Boudrea, a lawyer representing the company, noted that the company is not proposing to manufacture gummy or edible products “that could be targeted toward children.”
“The proposal is not to manufacture any edibles,” Mr. Boudrea said.
The Mashpee selectmen have voiced opposition to edible products in the past. Last month, the selectmen rejected a host agreement for the company Tree Beard after the company pushed back over the issue of edible products.
“The manufacturing is going to be limited to taking the waste material from the cultivation process and processing it into oils and distillates,” said Patrick J. Casey, president of Aspen Blue. “There won’t be a kitchen on site.”
Mr. Gottlieb questioned language in Aspen Blue’s presentation that stated that the cultivation and manufacturing facility would put the company in “a tactically superior position to be approved for an adult-use store,” should the opportunity arise in Mashpee.
“If you get this license, you’re getting this license, it doesn’t mean you are first in line for another license for retail if we get one,” Mr. Gottlieb said.
Mr. Casey said the company understood. Due to regulations that limit any one company to owning no more than three retail facilities, the company’s plans to open retail stores in Attleboro, Wellfleet and Beverly would likely prevent a store in Mashpee anyway, he said.
Selectman David W. Weeden asked about the company’s plans to sell products cultivated or manufactured in Mashpee to retail facilities also owned by Aspen.
“If you are manufacturing and then selling to yourself, what sort of mechanisms do you have to sort of quantify percentages and sales?” Mr. Weeden said.
Mr. Casey interpreted Mr. Weeden’s question as asking whether Aspen would offer its own retail facilities discount rates.
“It is our intention to sell to our own stores at market rates,” Mr. Casey replied.
Mr. Gottlieb followed up on Mr. Weeden’s question.
“You say you are a vertically integrated company, which to me means, the reason people are vertically integrated is so that they can get the supply that they need for their finished product and not pay someone else’s markup,” Mr. Gottlieb said.
Mr. Casey said, “When we refer to a vertically integrated company, it has to do with supply for our retail outlets more than discounts for the retail outlets. One of the problems a lot of retail, adult-use dispensaries are running into in this state is they are running out of product or don’t have good product.”
Mr. Gottlieb noted that if the company offered itself a discount rate, the revenue taxable by the town would be less.
In order to “generate the same revenue that is taxable for purposes of the town’s interest,” Mr. Gottlieb asked the company to commit to selling its product to its own retail facilities at the same rate it would sell it to other companies’ retail facilities.