SALEM — Medical pot sales are paving streets in Salem.
The city has received $330,750 from Alternative Therapies Group, the city's only and state's first medical marijuana dispensary, since the facility opened for the fiscal 2015-16 year. That includes $82,856.01 for its first year of operation ending in June 2016, and a $247,893.88 check from the nonprofit delivered just a few weeks ago for fiscal 2017.
Now, the city is putting that cash to use. The first year's payment has gone toward the first phase of an engineering study on a gargantuan roadway project on Boston Street — a gateway into the city just around the corner from ATG, according to Salem Mayor Kim Driscoll.
"What we were hoping to do was to use it in the area for things like traffic mitigation measures, public infrastructure," Driscoll said. "We already have spent some of it to do some of the design work for Boston Street."
Boston Street is often seen by city leaders as the last gateway corridor into Salem that hasn't benefited from steps toward an overhaul. North Street was rebuilt 12 years ago, Driscoll said, and Bridge Street followed it a few years later. Canal Street is under way now, and Highland Avenue has improvement ideas being tossed around at the state level.
In the end, the design work on Boston Street will encompass a massive project that will go curb to curb, head to toe on the busy road.
"If Canal Street is a $10 million project, you're probably talking $15 to $20 million (on Boston Street) by the time you get to it," Driscoll said. "The corridor has never been upgraded like this."
There's less known about what the most recent year of cash will cover, though the city has ideas, according to Driscoll.
"What we've laid out in the host agreement (with the dispensary) would be public infrastructure, traffic mitigation and community wellness programs," Driscoll said. "I think public infrastructure will be a high priority, given the sidewalk and roadway needs we have in the city."
The money coming in is based on a percentage of the dispensary's sales. For both years, 1.25 percent of money from sales went back to the city. For 2016-17, an extra $100,000 was added to the 1.25 percent return. The reimbursement rate jumps to 2.5 percent beginning this fiscal year, which started July 1.
Specific details on the origin of the payment weren't available from City Hall this week. Based on the checks cut and some quick math, ATG sold about $11.8 million in product last year, and about $6.2 million the year before.
The reimbursement to the city is based on actual sales, not profits made, according to City Solicitor Beth Rennard.
Chris Edwards, ATG's executive director, declined to go into detail on the company's financials or confirm the numbers outlined above. But business, he said, has been strong.
"It's a challenging business," he said, "but we're doing just fine."
The business first opened in late June 2015, just a few days ahead of the fiscal year's end. Since then, the non-profit hasn't run into any problems with security or crime, according to Edwards.
That comes after many in the city feared what a medical marijuana dispensary would bring to Salem in terms of crime — fears that Edwards said weren't supported by data.
"We thought those fears were unfounded. That assertion was supported by data from other states that had medical programs and recreational programs," Edwards said. "We'd proud to report that those statistics have held true in this state as well."
It also comes as another dispensary — Boston-based Mayflower Medicinals — eyes opening up a space at 151 Canal St. There have been no developments in those conversations since news broke on it in May, according to Driscoll.
The news also comes as concerns swirl around the city about the recently passed recreational marijuana law, which city officials are reviewing the implementation of. Concerns have focused on whether existing or coming dispensaries like ATG would flip their license to a retail store format, something that Edwards declined to discuss publicly.
"It's really up to the city to determine how they want to move forward," Edwards said.
For Driscoll, the focus is in part on spending the cash already in place.
"We'll be going down (to Boston Street), setting up stakeholder meetings with Boston Street-area residents and the Mack Park Neighborhood Association to review areas of concern and opportunities to upgrade the entrance corridor," she said. "We'd be looking at sidewalks, trees, lighting, the roadway configuration pattern — much like Canal Street."