Orleans reaches agreements with two cannabis retailers

Orleans has signed Host Community Agreements with two would-be recreational cannabis retailers in spite of ongoing litigation that would prevent them from moving forward,

The Select Board did so Wednesday night and finalized the agreements with Seaside Joint Ventures and Ember Gardens. The two applicants now have to go before the Cannabis Control Commission, while B/Well pursues its suit against the town contesting the decision enter negotiations with the two applicants.

The community agreements are almost identical.

Seaside Joint Ventures

Seaside Joint Ventures would operate a retail recreational marijuana shop at 14 Lots Hollow Road (next to Agway) in what used to be an insurance office that was sold for $1.3 million in April.

If and when it becomes operational -- which Seaside Joint Ventures hopes will be by next summer - it will provide a community impact fee to Orleans. That fee will amount to 3 percent of the shop’s gross revenues from all marijuana products and be paid quarterly in April, July, October and January. Under the agreement, the payments would continue for five years. After that a new fee could be negotiated provided it isn’t less than 3 percent. If the payments are late there will be a 5 percent surcharge on the amount due.

Orleans should use the impact payments to alleviate the impacts such as roadwork, traffic control, fire protection, inspections, consulting, public health, addiction and education.  

In addition Seaside will donate $20,000 a year to the town’s recreational sports programs. It also will provide 100 hours each year for community service on drug prevention, public health, senior assistance, youth programs, cleanups and or veterans assistance.

Seaside will also contribute 1 percent of its revenues to a special fund established by Orleans for grant funding of charitable works.  

The companies will also try to hire local help to the extent permissible under the law and utilize local businesses for services. To do this, jobs will be advertised for two weeks first to Orleans residents.

The shop must stay open at least four hours a day four days a week. Tthe expectation is they’ll be open much more than that.

Seaside will reimburse the town for the costs of monitoring the agreement.

Ember Gardens

The agreement with Ember Gardens, which will operate at 41 Route 6A, more or less opposite the former Lobster Claw, is identical to the one with Seaside, five years at 3 percent of revenues, with some exceptions.  Instead of donating to the Recreation Department, Ember Gardens will contribute $50,000 annually, in $10,000 increments, to the Orleans Conservation Trust, Nauset Together We Can, Orleans After School Program, the Homeless Prevention Council and an organization selected by the town. Ember Gardens did pledge to contribute 1 percent of gross revenue to a special fund set up by Orleans, as Seaside will do.

Litigation vs. B/Well

There is a hitch to all of this: Orleans is still involved in litigation with B/Well over the decision to award the right to negotiate a host agreement and pursue a license for retail marijuana sales to Seaside Joint Ventures and Ember Gardens.

B/well filed a request for an injunction against proceeding with the host agreement negotiations in June after the Select Board designated the two applicants as the top choices with Dune Wellness as an alternate if negotiations faltered.

Five hopeful retailers originally applied to  the town and paid a $10,000 fee to be considered. After submitting a questionnaire and making a presentation to the Select Board, the applicants were ranked on a 140 point scale. While one applicant -- The Strain -- finished with a score of 80 the other four all scored between 96.6 and 100.8. B/Well scored second with 99.8 (Ember Gardens was first) but was bypassed by the two lower scoring applicants when Seaside (scoring 97.2) was chosen for the HCA and Dune Wellness was designated the alternate spot.

“Certain members of the select board were apparently dissatisfied with who the winners were and the select board refused to honor the outcome of its own process,” B\well's lawyers argued in a brief on June 14. "The select board moved not one but two lower scoring applicants ahead of B/well in total disregard of its own process.”

The request for an injunction against proceeding with the host community agreements was denied, as was a second later request. However the litigation is ongoing in Barnstable Superior Court and is entering the meat of the case: whether or not the award of the right to negotiate to Seaside was  “arbitrary and capricious and thus an abuse of its discretion,” as B/Well alleges.

B/Well argued that it was  "entitled to be prequalified for an HCA or awarded the right to negotiate exclusively with the town for one of its two HCAs."   

“There are risks on the part of the applicants if an adverse legal decision is made,” Select Board member Meff Runyon said. “From the town's perspective, if there should be an adverse legal decision the contracts would become void.”

Town Administrator John Kelly added that the provisional license from the Cannabis Control Commission would also be voided.

“We’re now in the main litigation,” he said. “Town counsel will give us an update Dec. 1. They (Seaside and Ember Gardens) signed with the understanding litigation is not resolved.”

During the June meeting when the two applicants were chosen, a number of neighbors spoke against B/Well. It was the only one of the top four applicants located in a residential area – on West Road next to the Beacon restaurant. The other three were in commercial or industrial areas.  

What's next

Kelley said both would-be shops need to appear before the Cannabis Control Commission with their full application and HCA and Orleans will notify the CCC they are in compliance with local bylaws before they get their provisional license.  The two applicants must then go before the Site Plan Review Committee, Architectural Review Committee and finally the Zoning Board of Appeals for a special permit. That’s where traffic safety, lighting and other issues will be addressed.

Should they get all their approvals there, the CCC would do an inspection and issue a final license.

Tim McNamara of Seaside Joint Ventures asked to be able to pursue several tracks at once, state and local, but Kelly said they would need their provisional license from the CCC before they go before the local boards.

McNamara also asked the town to have the host agreement cover its manufacturing operations, as Seacoast Joint Ventures plans to sell its own branded products at the shop. Kelley said there was no need for an HCA for manufacturing.

 “We’re super excited to get into Orleans,” said Shane Hyde of Ember Gardens. “To echo Seaside, we’ve seen other communities give conditional approvals and then we’d present for the provisional license when the other meetings are out of the way. But we’re looking forward to coming to Orleans next year.”