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Dispensary Owner Change Will Require New Leominster Pot Permit

May 4, 2019

LEOMINSTER -- The city and Prime Wellness Inc. will renegotiate their special permit and host agreement because the marijuana dispenser is now owned by a national company.

Leominster’s legal counsel had originally said no renegotiation was necessary.

Acreage Holdings would be doing business as The Botanist at 1775 Lock Drive as a medical marijuana dispensary. It has not opened because the state’s Cannabis Control Commission has not issued it a final license.

“I said at the time (in October when it was learned Acreage Holdings had purchased Prime Wellness), let’s slow this down,” said At-large City Councilor Claire Freda.

Freda said during that Oct. 22 meeting she believed the special permit issued to Prime Wellness by the city was no longer in force because of the first provision of the permit that reads: “The Special Permit is not transferable either to a third party or by a transfer of the majority of the stock of the company, except as a result of the death of shareholder.”

Freda had asked the city’s solicitor, Brian Riley of the firm KP Law, for an opinion in October whether the special permit needed to start over with the changing ownership of the company.

Riley answered Freda that he had discussed the issue with one of his partners and wrote back that ’in my opinion, it would not be necessary for Acreage Holdings to start the special permit process all over again.”

However, this week, after another query from the city about the special permit issued to Prime Wellness, now owned by Acreage Holdings, Riley corrected his original opinion with an acknowledgment to Freda for raising the issue last year.

He wrote in an email, referencing the city’s zoning code, that a special permit is limited to the time the applicant (Prime Wellness) has ownership or custody of the premises.

“If so, then the (zoning code) requires that the new owner/lessee request a transfer of the original special permit,” wrote Riley.

He added: “While this would technically be a transfer rather than a new permit, it would make little difference as a practical matter since all information required of a new applicant would have to be filed before the council could consider a transfer.”

The status of the host agreement, which details what the company will provide the city in financial terms for being allowed to operate the dispensary within city limits, is also now being questioned.

Ward 4 Councilor Mark Bodanza, who is an attorney and former city solicitor and who helped draft the original host agreement with Prime Wellness, made it clear the changing ownership had changed the agreement.

“You bet I’m going to be looking at this. We’ve got to know who we’re doing business with,” said Bodanza. ”(The council) is going to have them down here to answer some questions.”

One of the provisions in the host agreement is a description of the of the relationship between the company and the city. Provision 12 reads the “agreement is binding upon both parties, their successors, assigns and legal representatives. Neither the City or Company shall assign or transfer any interest in the Agreement without the written consent of the other.”

While the City Council is responsible for issuing the special permit, Mayor Dean Mazzarella negotiates the host agreement.

On Friday afternoon, his office released a statement that he would begin the renegotiation of the host agreement and the City Council do the same with the special permit.

Acreage Holdings, according to news reports, is one of the country’s largest vertically integrated cannabis companies with over 40 dispensaries and cultivation operations in 14 states including Massachusetts. Several of the company’s board members are well-known and include former House Speaker John Boehner, former Massachusetts Gov. Bill Weld, and former Canadian Prime Minister Brian Mulroney.

Howard Schacter, a spokesman with Acreage Holdings, said on Friday that the company is “in touch with the city.”