GREAT BARRINGTON — The owners of three pot stores filed a lawsuit Thursday against the town seeking a return of millions in fees they say were unlawfully collected.
Theory Wellness, Inc., Community Growth Partners Great Barrington Operations, LLC— which owns Rebelle— and Highminded, LLC, which owns Farnsworth Fine Cannabis, filed jointly in Middlesex Superior Court.
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The lawsuit’s four counts include breach of contract and unjust enrichment. The owners seek a return of Community Impact Fees, which combined total $5,944,679, not including interest, costs and attorneys’ fees. The businesses are also asking for the town to halt the collection of new fees in the future.
Theory is seeking a return of $5,182,769.67; Rebelle is seeking $526,380; and Farnsworth wants a return of $235,529.33.
They also want a judge to declare that the fees are illegal.
South Berkshires
Two Great Barrington pot stores threaten to sue the town if it does not return millions in ‘unlawful’ impact fees
- By Heather Bellow, The Berkshire Eagle
2 min to read
The town says it is poised to fight.
Town Manager Mark Pruhenski issued a statement Wednesday, following a threat last month by Theory and Rebelle owners to sue the town. In it he said the town would defend itself, and noted that the town's contracts with the businesses were solid, and that they chose to open shop in town by their own accord. The stores “willingly” entered into those contracts.
The lawsuit follows a threat last month by Theory and Rebelle’s owners to sue the town to recoup the money. The two retailers had stopped paying the fees in protest; as of last May, Theory was behind two quarters for fiscal 2023 and Rebelle was behind all quarters of that fiscal year.
The fees collected are a 3 percent cut of gross sales, and are included in the businesses’ Community Host Agreements with the town. These agreements are required by state law, which also says no more than 3 percent of impact fees can be collected, and not for more than five years.
The money was originally intended to offset any increase in expenses and problems potentially related to sales of legal cannabis.
But that hasn’t been the case, according to the town. Town Manager Mark Pruhenski has acknowledged in writing to each of the businesses’ owners that their operations have not resulted in any “significant costs” to the town.
The court filing accuses Great Barrington of breaking the law by collecting the fees. It also alleges “bad faith” for refusing to return the money and for not entering into new agreements until all overdue and current fees are paid.
State law, the owners point out, was amended in late 2022 to say that any so-called impact has to be demonstrated and enumerated. The amendment says that the town can’t take a slice of sales. Fees have to be “reasonably related” to any costs borne by the town.
“In recognition that it does not possess the legal right to charge these fees,” the court filing says, “the Town of Great Barrington has segregated and not utilized large portions of the fees it has received from Plaintiffs.”
It also says that the town’s creation of a committee to “manufacture, after the fact, uses for the collected funds,” is more proof that the fees are unrelated to the impact of the stores.
Town Manager Pruhenski also said in his statement Wednesday that the demand is “an ultimatum” and “one-sided view” of marijuana businesses with no legal basis.
“By most, if not all, accounts, their operations have been financially rewarding,” Pruhenski said.
And Pruhenski also said that some of the “impact” of pot sales might take more time to understand.
In a joint statement, Theory, Rebelle and Farnsworth reiterated points in the legal filing and said they did not want to sue the town, "as we are deeply invested in the community, its businesses, and the people we employ and serve here."
"However, we have tried many times over the last year to engage directly and amicably with the Town," they said, "and have been repeatedly ignored and our concerns dismissed."
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