Fall River has countersued the cannabis retailer that accused the city of unfairly charging it $4.6 million in community impact fees, arguing in a new court filing that it is the city that is actually owed money. The countersuit, filed against Northeast Alternatives, claims the city is itself owed unpaid fees and damages, though it does not say how much.
According to The Herald News, the city filed its countersuit brief on Monday in Bristol County Superior Court. The dollar amounts the city is seeking are not specified in that filing, the paper reports, leaving the financial stakes of the city's claim unclear even as it pushes back against the cannabis shop's own multimillion-dollar demand.
Northeast Alternatives, which operates a dispensary at 999 William S. Canning Boulevard, first brought the fight to court by accusing Fall River of unfairly charging it $4.6 million in fees. Per WSAR, the company alleges the city charged those community impact fees from April 2019 through September 2022 without ever explaining what specific municipal costs they were meant to cover.
A Fee Structure Built on Gross Sales, Not Costs
Central to Northeast Alternatives' complaint is the claim that Fall River's host community agreement locked in flat, percentage-based fees calculated off the dispensary's gross sales, with no connection to any documented or anticipated expense the city actually incurred. That agreement was executed back on April 13, 2018, before the retailer opened, according to an executive summary posted by the Massachusetts Cannabis Control Commission.
Under Massachusetts law, a community impact fee could never exceed 3 percent of a marijuana establishment's gross sales, a cap set by the Massachusetts Legislature in the 2017 law legalizing recreational cannabis. Payment was structured to come due annually, starting no sooner than a business's first license renewal, under a separate section of state law.
But the rules governing those fees got a lot stricter in 2022. Municipalities now have to demonstrate an actual connection between a cannabis establishment's operations and an increased need for municipal goods or services, and they must spell out the reasoning behind every fee they charge, according to guidance from the Massachusetts Cannabis Control Commission. Commission guidance also makes clear that a host community agreement cannot waive a cannabis business's right to dispute whether a fee is reasonably related to the city's costs and properly payable in the first place, and bars municipalities from categorizing vague estimates or generalized, prorated expenses as legitimate impact fees.
Fall River Joins a Statewide Wave of Fee Fights
Fall River is far from alone in facing this kind of challenge. Massachusetts communities have collected at least $50 million in cannabis impact fees since 2018, and the former fee structure allowed charges of up to 3 percent of sales, according to The Boston Globe. After the 2022 law change, reforms changed little, and dozens of communities continued demanding fees, the Globe reported.
A state audit found that 18 of 26 host community agreements it reviewed between mid-2022 and mid-2024 violated the 2022 law, according to Axios. That audit concluded weak oversight has created conditions in which mainly large, multistate cannabis operators can thrive, and Axios reports at least a dozen Massachusetts municipalities are currently tangled up in cases challenging the Cannabis Control Commission's authority to review existing agreements.
