SALEM — City officials say they have received a subpoena from U.S. Attorney Andrew E. Lelling's office for documents related to the city's host community agreements with marijuana retailers.
In Salem, as in numerous other cities and towns, these agreements were drafted ahead of the state's recreational marijuana laws taking effect last year. On Monday, the Boston Globe reported that a federal grand jury was investigating these negotiated deals. Officials in Eastham, Leicester, Newton, Northampton and Uxbridge all confirmed receiving subpoenas, according to the Globe.
In a statement, Dominick Pangallo, chief of staff to Salem Mayor Kim Driscoll, said Tuesday that the city, "along with several cities and towns in Massachusetts, has received a request from the United States Attorney's office for documents pertaining to the city's process for selecting medical and recreational marijuana establishments for host community agreements and letters of non-opposition."
"We are fully cooperating with this request and have been in communication with the U.S. Attorney's team to coordinate the compilation of the requested records," Pangallo wrote. "We strongly believe that we have engaged in a fair, open and professional process with respect to medical and recreational cannabis facilities in the city of Salem and are working to provide this information and respond to this request."
Host agreements have frequently been a target of scrutiny in the past year after organizations began to question a number of these deals. More specifically, criticism has focused on whether they were demanding too much of prospective retailers, something that has received heightened attention in light of the recent arrest of Fall River Mayor Jasiel Correia on charges that included conspiring to extort money from marijuana companies.
In Salem, the deals the city signed with five prospective recreational shops include not just a 3% tax on sales, but another 3% to cover community impacts and 1% for the city's "Transit Enhancement Fund," which pays for initiatives that could lead to transit improvements in the city. Each agreement also calls for donations to Salem-based nonprofits.
In a previous interview, Pangallo had said two of the deals — Atlantic Medical Partners on Highland Avenue, and Seagrass on Dodge Street — voluntarily "chose to go above and beyond" $25,000 in charitable donations, "and they also chose to specify which nonprofits they wanted to make contributions to."
At the time, Seagrass CEO Chip Tuttle confirmed his business voluntarily chose to sweeten the deal. That includes an extra tax on monthly revenue that exceeds certain thresholds, such as an extra 1.5% on all sales above $750,000 in a single month.