Newton must repay $2.4 million to three cannabis dispensaries after a Middlesex County Superior Court judge ruled the city illegally collected community impact fees that funded school counselors, substance-abuse programs and a community resource dog named Officer Leo.
The city plans to fight the ruling in appellate court.
Justice Asha White issued the Aug. 4 decision granting summary judgment to Ascend, Redi and Garden Remedies, finding that none of Newton's spending from the fees was connected to actual costs the dispensaries imposed on the city. The dispensaries, located on Washington Street and Elliot Street, sued in February 2025.
White found that all seven categories of city spending funded by the fees addressed broad community needs rather than specific impacts caused by the three cannabis businesses, as reported by Fig City News.
Garden Remedies, at 697 Washington St., paid $1,704,175. Ascend, at 1089 Washington St., paid $492,855. Redi's parent company, Cypress Tree Management, which operates at 24 Elliot St., paid $200,937.
What the money paid for
Newton deposited the fees into its general fund and spent them on seven categories:
- $1.1 million for substance-use prevention curriculum in Newton Public Schools
- $600,000 for part-time school psychologists serving as substance-abuse counselors
- $500,000 for Washington Street redevelopment design
- $220,000 for counseling services through a nonprofit
- $71,734 for Officer Leo, a community resource dog
- $63,750 for substance-abuse services through a nonprofit
- $26,820 for a prescription drug drop-off kiosk
- $1,789 for Narcan kits distributed free to residents
The dispensaries signed host community agreements with Newton in 2018 and 2019, each requiring a fee equal to 3 percent of gross sales. A city task force called Newton PATH developed the spending priorities, with no indication any item was tied to a specific dispensary's actual impact.
City Solicitor Alissa O. Giuliani announced Aug. 11 that Newton would appeal, citing broad legal and financial implications for Newton taxpayers and other Massachusetts communities.
Mayor Marc Laredo told the Boston Globe editorial board on Aug. 17 that the agreements were entered into freely and in good faith, consistent with public policy at the time.
Newton stopped collecting community impact fees after state law changed in 2022 to require municipalities to document actual costs before charging dispensaries.
The ruling is described by Massachusetts Lawyers Weekly as the first court decision to examine whether a municipality's claimed costs can appropriately be assessed against a cannabis licensee.
"This decision correctly confirms that Massachusetts municipalities cannot use community impact fees as a vehicle to raise revenue to support broader community initiatives, no matter how redeeming those initiatives may be," David H. Rich, the Boston attorney who represented the three dispensaries, told Massachusetts Lawyers Weekly.
Greg Reibman of the Charles River Regional Chamber called the appeal disappointing, telling Fig City News on Aug. 12 that the dispensaries "are lawful, well-run businesses that were being charged to address problems they didn't create."
Other municipalities have faced similar challenges. Great Barrington, Uxbridge and Pittsfield have settled lawsuits over cannabis impact fees, and suits remain pending in Taunton and Hanover.
No timeline for the appellate proceedings has been announced. How Newton would fund the $2.4 million repayment if the appeal fails has not been disclosed.
