Title: Mederi, Inc. v. Salem
Citation: N/A
Docket Number: SJC-13010
State: Massachusetts
Issuer: Massachusetts Supreme Court
Date: July 30, 2021

NOTICE:  All slip opinions and orders are subject to formal 
revision and are superseded by the advance sheets and bound 
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error or other formal error, please notify the Reporter of 
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SJC-13010 
 
MEDERI, INC.  vs.  CITY OF SALEM & another.1 
 
 
 
Essex.     February 3, 2021. - July 30, 2021. 
 
Present:  Budd, C.J., Gaziano, Lowy, Cypher, Kafker, Wendlandt, 
& Georges, JJ. 
 
 
Marijuana.  License.  Municipal Corporations, By-laws and 
ordinances, Contracts, Marijuana.  Contract, Municipality.  
Mandamus.  Practice, Civil, Action in nature of mandamus, 
Action in nature of certiorari, Motion to dismiss, Judgment 
on the pleadings.  Regulation. 
 
 
 
Civil action commenced in the Superior Court Department on 
December 21, 2018. 
 
A motion to dismiss was heard by Timothy Q. Feeley, J.; and 
the case was heard by Jeffrey T. Karp, J., on motions for 
judgment on the pleadings. 
 
The Supreme Judicial Court on its own initiative 
transferred the case from the Appeals Court. 
 
 
William H. Sheehan, III, for the plaintiff. 
Victoria B. Caldwell, Assistant City Solicitor, for the 
defendants. 
Christine A. Baily, Special Assistant Attorney General, for 
Cannabis Control Commission, amicus curiae, submitted a brief. 
 
 
 
1 Mayor of Salem. 
2 
 
 
 
BUDD, C.J.  Since the sale and recreational use of 
marijuana became legal in the Commonwealth in 2016 pursuant to 
St. 2016, c. 334, entities seeking to open retail marijuana 
establishments and their prospective host communities have 
grappled with that statute as subsequently amended, along with 
the accompanying regulations promulgated by the Cannabis Control 
Commission (commission).  In this case, the parties are at odds 
over (1) a municipality's role in deciding who is granted a 
license to sell marijuana; and (2) the restrictions, if any, 
that apply when a municipality is choosing between applicants 
for a retail marijuana license. 
 
Mederi, Inc. (Mederi), sued the city of Salem (city), 
contending that by rejecting Mederi as a host community 
agreement (HCA) partner, the city effectively precluded Mederi 
from being considered for a license to sell marijuana because 
securing an HCA is necessary prior to applying to the commission 
for a license.  Mederi also claims that the city's process was 
arbitrary or capricious and contrary to law.  Mederi's suit did 
not survive the combination of orders allowing the city's motion 
to dismiss and motion for judgment on the pleadings filed ad 
seriatim.  Before us is Mederi's appeal, which we transferred to 
this court on our own motion.  Although we observe that the 
interplay between the statute and the regulations may have led 
3 
 
to consequences perhaps not contemplated by the Legislature or 
the commission, we nevertheless conclude that Mederi's claims 
properly were denied, and thus affirm the decision.2 
Background.  1.  Statutory and regulatory framework.  In 
2016, Massachusetts voters approved the Regulation and Taxation 
of Marijuana Act, St. 2016, c. 334, codified at G. L. c. 94G, 
§§ 1 et seq., and amended the following year by St. 2017, c. 55, 
entitled "An Act to ensure safe access to marijuana" 
(recreational marijuana act).  Chapter 94G provides for, among 
other things, the sale of marijuana to adults for recreational 
use and empowers the commission to oversee and regulate the use 
and distribution of recreational marijuana.  See G. L. c. 94G, 
§ 4.  The Legislature tasked the commission with regulating the 
Commonwealth's new marijuana industry by, among other 
responsibilities, issuing licenses to prospective marijuana 
establishments.3  Id. 
The commission reviews licensing applications "on a rolling 
basis."  935 Code Mass. Regs. § 500.102(1)(a) (2021).  In doing 
so, it prioritizes the review of applications from licensed 
 
 
2 We acknowledge the amicus brief submitted by the Cannabis 
Control Commission (commission). 
 
3 A "marijuana establishment" is "a marijuana cultivator, 
independent testing laboratory, marijuana product manufacturer, 
marijuana retailer or any other type of licensed marijuana-
related business."  G. L. c. 94G, § 1. 
4 
 
marijuana treatment centers that seek to convert to retail 
marijuana establishments as well as economic empowerment 
priority applicants.  935 Code Mass. Regs. §§ 500.101(4), 
500.102(2)(a) (2021).  Economic empowerment priority applicants 
are, broadly speaking, those applicants from communities that 
have been disproportionately harmed by marijuana law enforcement 
(particularly Black, Hispanic, and Latino communities).  935 
Code Mass. Regs. § 500.002 (2021).  The commission statutorily 
is required to prioritize such applicants.  See St. 2017, c. 55, 
§ 56 (a) (ii); G. L. c. 94G, § 4 (a 1/2) (iv) (commission must 
adopt "procedures and policies to promote and encourage full 
participation in the regulated marijuana industry by people from 
communities that have previously been disproportionately harmed 
by marijuana prohibition and enforcement and to positively 
impact those communities").4  Likewise, qualifying applicants or 
licensees are eligible to receive training in, among other 
things, management, industry best practices, accounting and 
sales forecasting, and tax compliance.  935 Code Mass. Regs. 
§ 500.105(17) (2021).5 
 
4 This requirement demonstrates the Legislature's intent to 
assist through retail-marijuana legislation communities 
disproportionately affected by enforcement of marijuana crimes. 
 
5 Individuals other than owners of economic empowerment 
priority applicants may qualify for these services.  To qualify, 
an individual must meet certain criteria showing, generally, 
 
5 
 
Chapter 94G gives municipalities the power to regulate the 
operation of recreational marijuana establishments within their 
borders, including the ability to adopt ordinances governing the 
total number of such establishments, as well as the time, place, 
and manner of marijuana sales (with certain exceptions) as long 
as the ordinances do not conflict with the provisions of c. 94G.  
See G. L. c. 94G, § 3 (a). 
Chapter 94G also allows municipalities to determine the 
conditions under which they are willing to "host" retail 
marijuana establishments.  G. L. c. 94G, § 3 (d).  The relevant 
section provides, in pertinent part: 
"A marijuana establishment . . . shall execute an agreement 
with the host community setting forth the conditions to 
have a marijuana establishment . . . located within the 
host community which shall include . . . all stipulations 
of responsibilities between the host community and the 
marijuana establishment . . . ." 
 
Id.  Municipalities may charge marijuana establishments a 
"community impact fee" that, among other requirements, does not 
exceed three percent of the marijuana establishment's gross 
sales.  Id. 
Although the commission's regulations are silent on the 
process of negotiating an HCA, in a nonbinding guidance 
 
that they have been disproportionately affected, reside in a 
community so affected, or have experience serving populations so 
affected by prior enforcement of the marijuana laws.  935 Code 
Mass. Regs. § 500.105(17)(b). 
6 
 
document, the commission states that it "encourages 
municipalities to carefully consider the impact of the 
particular marijuana establishment proposed for a community, as 
well as benefits it may bring in local revenue and employment, 
when negotiating [an HCA]." 
An applicant must provide the commission with proof of an 
HCA as part of its application for a license.  935 Code Mass. 
Regs. § 500.101(1)(a)(8) (2021). 
2.  The city's HCA application process.  Pursuant to G. L. 
c. 94G, § 3 (a) (2), the city passed an ordinance limiting the 
maximum number of marijuana retail establishments within the 
city to five.  The city published guidelines explaining the HCA 
application process, including the minimum requirements 
necessary to apply.  Among other things, applicants were 
required to submit business plans and to describe any prior 
experience managing a marijuana business.  They also were 
required to provide documentation of their financial solvency; 
detailed information regarding the proposed location of the 
retail establishment, including traffic and security plans; and 
a copy of a special permit issued by the city's zoning board of 
7 
 
appeals or evidence of site control of the proposed location for 
the establishment.6 
The guidelines also listed the following favorable criteria 
that would be considered: 
"(a) Demonstrated direct experience in the cannabis 
industry or a similar industry.  (b) Managers, directors, 
officers, investors, and others related to the 
establishment are free of any disqualifying criminal 
convictions.  (c) Minimal traffic impacts and appropriate 
mitigation for impacts is offered.  (d) Approval of 
security plan by Chief of Police.  (e) Financial records, 
business plan, and other documentation demonstrates strong 
capitalization or access to financing to ensure success of 
business.  (f) Geographic diversity of the establishment in 
relation to other established or permitted marijuana retail 
establishments." 
 
A review committee was established to evaluate the applications 
and provide recommendations to the mayor, who would make the 
final determination whether to enter into an HCA with a 
particular applicant. 
3.  Facts and procedural posture.  We summarize the 
relevant facts taken from the record, reserving certain details 
for later discussion.  In September 2018, Mederi applied for an 
 
6 "Site control" may be accomplished by purchase or lease of 
the property.  Under section 6.10.7(3) of the city's ordinance, 
an applicant for a special permit to operate a marijuana 
establishment "shall submit proof of site control and right to 
use the premises proposed for the marijuana establishment and 
may include a deed, notarized statement from the property owner 
and a copy of the lease agreement, or real estate contract 
contingent upon successful licensing, or a letter of intent by 
the owner of the premises indicating intent to lease the 
premises to the petitioner contingent upon successful 
permitting." 
8 
 
HCA with the city to open a retail marijuana establishment on 
Highland Avenue in Salem.  At the time Mederi applied, there 
were a total of eight applicants vying for four then-available 
slots.7  In addition to meeting all of the city's stated 
requirements, Mederi made extra property tax payments at the 
city's request. 
In December 2018, after the city informed Mederi that it 
had "not been chosen to advance to the next round of 
consideration," Mederi filed a two-count complaint in the 
Superior Court seeking relief in the nature of mandamus, i.e., 
an order requiring the city to enter into an HCA with Mederi, as 
well as certiorari review of the city's rejection of Mederi's 
application.8  A Superior Court judge (first motion judge) 
dismissed the mandamus claim in an order allowing the city's 
motion to dismiss the complaint.  Thereafter, both parties moved 
 
7 The other applicants were Atlantic Medicinal Partners, 
Inc. (Atlantic Medicinal); I.N.S.A, Inc., doing business as INSA 
Salem (INSA); NS Alternatives LLC (NS Alternatives); Sanctuary 
Medicinals, Inc.; CTDW, LLC, doing business as Seagrass 
(Seagrass); Terpene Journey, LLC; and Witch City Gardens, LLC 
(Witch City Gardens). 
 
8 While the city's motion to dismiss was under advisement, 
Mederi filed an amended complaint, which added a third count 
naming the commission as a defendant and seeking an injunction 
preventing the commission from issuing a license for a retail 
marijuana establishment to operate in the city without 
considering an application from Mederi.  This additional count 
subsequently was dismissed, and Mederi did not appeal from that 
decision. 
9 
 
for judgment on the pleadings on the remaining certiorari claim.  
After a hearing, a different Superior Court judge (second motion 
judge) allowed the city's motion.  We transferred Mederi's 
timely appeal to this court on our own motion. 
Discussion.  1.  Mederi's claims for relief.  Mederi 
contends that the first motion judge erred in dismissing the 
first count of his complaint (mandamus) and, in the alternative, 
that the second motion judge erred in allowing the city's motion 
for judgment on the pleadings on his remaining certiorari claim.  
We are not convinced. 
a.  Mandamus.  Mederi argues that it was error to reject 
its claim for mandamus relief.  We disagree.  A request for 
relief in the nature of mandamus is "a call to a government 
official to perform a clear cut duty" (citation omitted).  
Simmons v. Clerk-Magistrate of the Boston Div. of the Hous. 
Court Dep't, 448 Mass. 57, 59-60 (2006).  See Johnson v. 
District Attorney for the N. Dist., 342 Mass. 212, 214-215 
(1961) (mandamus proper where district attorney refused to 
comply with personnel board's decision to reinstate petitioner 
as special messenger, because statute at issue "impose[d] a 
clear duty upon the [district attorney] to comply with the 
board's decision"); Strong, petitioner, 20 Pick. 484, 497-498 
(1838) (mandamus proper remedy where board of examiners refused 
to give petitioner –- duly elected as county commissioner –- 
10 
 
certificate of his election, because "counting the votes, and 
ascertaining the majorities and giving certificates of the 
result, are mere ministerial acts").  Further, "even if the act 
sought to be compelled is ministerial in nature, relief in the 
nature of mandamus is extraordinary and may not be granted 
except to prevent a failure of justice in instances where there 
is no other adequate remedy."  Lutheran Serv. Ass'n of New 
England v. Metropolitan Dist. Comm'n, 397 Mass. 341, 344 (1986) 
(Lutheran Serv. Ass'n).  See Anzalone v. Administrative Office 
of the Trial Court, 457 Mass. 647, 655 (2010) (mandamus is "an 
extraordinary remedy, invoked sparingly by the court in its 
discretion"). 
Because an HCA is a prerequisite to applying to the 
commission for a license to sell recreational marijuana, 935 
Code Mass. Regs. § 500.101(1)(a)(8), Mederi contends that a 
municipality's role in the regulatory structure is necessarily 
ministerial.  Otherwise, Mederi contends, the municipality, 
rather than the commission, has the power to decide which 
entities may be considered for a license. 
Here, Mederi claims that once it presented its application 
complete with all of the required documentation, and 
demonstrated its intention to accept the city's conditions, the 
city was required to execute an HCA with Mederi.  Mederi 
11 
 
contends that because the city failed to do so, mandamus relief 
is appropriate.  This argument fails. 
Nothing in G. L. c. 94G, § 3, imposes a duty on a city or 
town to enter into an HCA with a prospective recreational 
marijuana establishment simply because that establishment is 
able to fulfill the municipality's HCA requirements.  Indeed, 
G. L. c. 94G, § 3 (d), the provision governing HCAs, merely 
provides that a prospective marijuana establishment must enter 
into an HCA with a host community before it can operate.  That 
provision contemplates a negotiation between the host community 
and the applicant, stating that the HCA must include "all 
stipulations of responsibilities between the host community and 
the marijuana establishment."  Id. 
Further, no city ordinance requires the city to enter into 
an HCA with every applicant that meets the city's conditions for 
operating a retail marijuana business in the community.9  This 
makes sense, because an "agreement," i.e., a "manifestation of 
mutual assent by two or more [parties]," see Black's Law 
Dictionary 84 (11th ed. 2019), requires each party to opt in -- 
an inherently discretionary act. 
 
 
9 We note, however, that a city or town may not bar the 
operation of retail marijuana establishments within the 
municipality altogether.  See G. L. c. 94G, § 3 (a) (2) (i). 
12 
 
Because a municipality may use its discretion in 
determining whether to enter into an HCA with a prospective 
retail establishment, mandamus relief is not available to 
Mederi.10  See Boston Med. Ctr. Corp. v. Secretary of the Exec. 
Office of Health & Human Servs., 463 Mass. 447, 470 (2012) 
(mandamus "is not an appropriate remedy to obtain a review of 
the decision of public officers who have acted and to command 
them to act in a new and different manner" [citation omitted]).  
See also Lutheran Service Ass'n, 397 Mass. at 344 ("a court may 
not compel performance of a discretionary act"). 
b.  Certiorari.  In the alternative, Mederi argues that the 
second motion judge erred by allowing the city's motion for 
judgment on the pleadings on Mederi's certiorari claim.  See 
Mass. R. Civ. P. 12 (c), 365 Mass. 754 (1974).  We review 
 
10 In support of its position, Mederi relies on Clear 
Channel Outdoor, Inc. v. Zoning Bd. of Appeals of Salisbury, 94 
Mass. App. Ct. 594 (2018) (Clear Channel).  There, the Appeals 
Court held that the zoning board of appeals of Salisbury 
circumvented a process imposed by regulation for the approval of 
billboards by granting a special permit to only one of two 
applicants, improperly eliminating the power of the Department 
of Transportation to select one billboard for approval.  Id. at 
595-596.  That case, however, is inapposite.  The plaintiff in 
Clear Channel sought judicial review pursuant to G. L. c. 40A, 
§ 17, not mandamus relief.  Id. at 596.  A claim for mandamus 
relief would have failed (just as Mederi's claim fails here), as 
the Appeals Court explicitly noted that the board's role in 
granting a special permit had a discretionary component.  Id. at 
600.  See Lutheran Serv. Ass'n, 397 Mass. at 344 ("a court may 
not compel performance of a discretionary act"). 
13 
 
appeals from such orders de novo.  UBS Fin. Servs., Inc. v. 
Aliberti, 483 Mass. 396, 405 (2019). 
A claim in the nature of certiorari pursuant to G. L. 
c. 249, § 4, provides for judicial review of administrative 
proceedings "where such oversight is not otherwise provided by 
statute."  Yerardi's Moody St. Restaurant & Lounge, Inc. v. 
Selectmen of Randolph, 19 Mass. App. Ct. 296, 300 (1985).  The 
standard of review for a certiorari action depends on the nature 
of the action for which review is sought.  Revere v. 
Massachusetts Gaming Comm'n, 476 Mass. 591, 604 (2017), and 
cases cited.  "[W]here the action being reviewed is a decision 
made in an adjudicatory proceeding where evidence is presented 
and due process protections are afforded, a court applies the 
'substantial evidence' standard."  Id. at 604-605, quoting Figgs 
v. Boston Hous. Auth., 469 Mass. 354, 361-362 (2014).  However, 
where, as here, the decision being reviewed implicates the 
exercise of administrative discretion, the court applies the 
"arbitrary or capricious" standard, which is more deferential to 
the party defending the administrative action it took.  Revere, 
supra at 605.  See Attorney Gen. v. Sheriff of Worcester County, 
382 Mass. 57, 62 (1980).  This standard requires only that there 
be a rational basis for the decision.  Attorney Gen., supra.  
See Garrity v. Conservation Comm'n of Hingham, 462 Mass. 779, 
792 (2012) ("A decision is not arbitrary and capricious unless 
14 
 
there is no ground which 'reasonable [persons] might deem 
proper' to support it" [citation omitted]). 
In support of Mederi's claim for certiorari relief are 
arguments that fall into two broad categories.  Mederi maintains 
that (1) the city failed properly to evaluate Mederi's 
application according to the criteria set out in the published 
guidelines, and (2) the application process itself was unlawful. 
i.  Evaluation of HCA applications.  When Mederi submitted 
its application for an HCA, it was one of eight applicants vying 
for four then-available slots.11  As discussed supra, in 
evaluating applications for HCAs, the review committee 
considered criteria relating to experience in the marijuana 
industry, financial stability, geographic diversity, traffic 
impact, and the applicant's security plan.  Mederi claims that 
based upon these criteria, its application was as strong as, or 
stronger than, the applications of those entities that were 
ultimately selected.  Even assuming this to be true, the 
decision not to select Mederi cannot be characterized as either 
arbitrary or capricious. 
The review committee considered Mederi's application along 
with the applications of seven other entities:  Atlantic 
 
11 A fifth slot had already been filled by an entity 
previously licensed to distribute marijuana for medicinal 
purposes.  See 935 Code Mass. Regs. § 500.101(4). 
15 
 
Medicinal Partners, Inc. (Atlantic Medicinal); I.N.S.A., Inc., 
doing business as INSA Salem (INSA); NS Alternatives LLC (NS 
Alternatives); Sanctuary Medicinals, Inc. (Sanctuary 
Medicinals); CTDW, LLC, doing business as Seagrass (Seagrass); 
Terpene Journey, LLC (Terpene Journey); and Witch City Gardens, 
LLC (Witch City Gardens).  The committee concluded that Atlantic 
Medicinal, NS Alternatives, Seagrass, and INSA had the strongest 
proposals because they "appeared to be the strongest positioned 
to open, succeed, and provide minimal or manageable impact to 
the surrounding neighborhood."  The committee explained its 
reasoning thoroughly in a memorandum to the mayor: 
"All four offered strong evidence of capitalization, with 
detailed business plans demonstrating realistic projections 
of growth and costs.  All four also came with the strong 
endorsements for their site security plans by the Police 
Department . . . .  With the exception of INSA, the 
companies will have secured, indoor delivery areas for 
their products.  As delivery of product would be by van-
sized vehicles, Atlantic and Seagrass'[s] proposals would 
eliminate larger truck deliveries to those locations 
. . . .  Atlantic and INSA's general distance from 
residences was also advantageous.  Lastly, INSA, Seagrass, 
and NS Alternatives involve teams who have successfully 
been engaged in the cannabis industry . . . and 
demonstrated substantial familiarity with the industry." 
 
The review committee recognized that Mederi's application 
was "not without merits," as it would improve the condition of a 
"blighted commercial property" and "would serve a separate area 
of customers from other proposed companies, contributing to 
. . . geographic diversity."  However, the committee considered 
16 
 
the applications of Mederi, Terpene Journey, and Sanctuary 
Medicinals to be "not as strong as the others."12  Mederi, for 
instance, lacked "sufficient capitalization" and "direct 
experience in the industry."  It also was one of five applicants 
seeking to operate on Highland Avenue. 
The city ultimately chose to enter into HCAs with INSA, 
Witch City Gardens, Seagrass, and Atlantic Medicinal.13  Because 
the city had a rational basis for choosing these applicants, its 
decision not to enter into an HCA with Mederi was neither 
arbitrary nor capricious.  See Attorney Gen., 382 Mass. at 62.  
Based on the high number of applicants on Highland Avenue, the 
city ultimately selected two applicants that planned to locate 
on that street –- Atlantic Medicinal and INSA –- that, in its 
view, had stronger proposals than Mederi. 
Notably, and as the review committee recognized in its 
memorandum, the executives at INSA had extensive experience 
 
12 As for Witch City Gardens, the review committee concluded 
that its application was "mixed."  For example, although the 
committee found that the proposed location would create 
geographic diversity vis-à-vis other marijuana establishments, 
and would "contribut[e] to an improvement to the streetscape and 
neighborhood," the committee also noted that the Witch City 
Gardens team had no experience in the cannabis industry. 
 
13 The city also attempted to negotiate an HCA with NS 
Alternatives.  The record does not show why those negotiations 
did not result in an HCA, nor does it show why the city entered 
into an HCA with Witch City Gardens despite its "mixed 
application." 
17 
 
within the marijuana industry, whereas Mederi's chief executive 
officer had less than one year of direct experience as a 
licensed medical marijuana caregiver in Maine.  Further, the 
committee determined that Atlantic Medicinal and INSA provided 
evidence of "ample" and "very strong" capitalization and 
submitted business plans that projected "conservative and 
reasonable" revenue growth.  By contrast, the committee 
expressed concerns about Mederi's financial strength and its 
"sole capitalization" consisting of a private investor from New 
Jersey who had not yet completed "due diligence." 
Although Mederi may quibble with the city's reasoning and 
disagree with the city's ultimate course of action, there is no 
evidence that the city's decision was "either based on a legally 
untenable ground or [was] unreasonable, arbitrary, or 
capricious."  Forsyth Sch. for Dental Hygienists v. Board of 
Registration in Dentistry, 404 Mass. 211, 219 (1989).  The city 
made a rational choice to forgo Mederi's application in favor of 
other prospective retail marijuana establishments to bolster the 
geographical diversity of retail marijuana establishments 
throughout the city.14 
 
14 Mederi also takes issue with the city not requiring 
certain applicants to submit criminal offender record 
information (CORI) forms with their initial applications.  
However, it appears that the city did not run any CORI checks 
until after it selected the leading applicants.  Thus, the city 
 
18 
 
ii.  Unlawful process.  Mederi contends that the city's 
application process was contrary to law, and therefore the 
results should be nullified.  Pointing out that each of the 
successful applicants had promised to provide the city with 
additional benefits, financial and otherwise, if granted an HCA, 
Mederi argues that because it offered less financial and 
charitable incentives than did other applicants, it was not 
chosen.15  That is, Mederi alleges that the city's selections were 
predicated on an unlawful "pay-to-play" scheme. 
The record does not support Mederi's claim, as another of the 
applicants not selected, Terpene Journey, offered to provide 
significant additional financial benefits if it were granted an 
HCA.  Terpene Journey offered to donate up to ten percent of its 
annual profits to a fund to address local issues such as traffic 
and homelessness, at least $10,000 per year to youth prevention 
initiatives, and $50,000 to the North Shore Alliance of GLBTQ 
 
treated all applicants equally with respect to their criminal 
record information. 
 
 
15 Atlantic Medicinal offered to pay $60,000 to the city's 
general fund, among other donations; Seagrass agreed to pay the 
city an additional amount of from one and one-half to two percent 
of gross sales, among other donations; INSA offered to provide 
various charitable services, including participating in community 
safety, employment, and environmental initiatives, as well as drug 
awareness education; and Witch City Gardens offered to host 
conferences, seminars and drug awareness programs in the city.  In 
contrast, Mederi offered to improve the appearance of its property 
and to purchase and improve the adjacent property as well. 
19 
 
Youth.  In contrast, Witch City Gardens and INSA, with whom the 
city entered into HCAs, did not offer any additional direct 
pecuniary benefit.  See note 15, supra.  Mederi presents no 
credible evidence that the city based its decisions on the 
additional benefits that the applicants offered if selected.16 
Mederi also claims that the city used the HCA application 
process improperly to persuade Mederi to make additional 
payments to cover certain property taxes.  Specifically, Mederi 
alleges that the city, expressing concern over the delinquent 
real estate taxes owed by the owner of 250 Highland Avenue and 
the adjacent property at 260 Highland Avenue, suggested that 
Mederi gain site control over both properties.  Mederi 
purportedly made payments to the owner of both 250 and 260 
Highland Avenue, allowing the owner to pay off the overdue taxes 
on one of the properties.  There is no reason to believe that 
these events had an impact on the city's decision not to execute 
an HCA with Mederi.  We therefore discern no unlawful, 
 
 
16 As there is no evidence that the city made its selections 
based on anything other than its own guidelines, we need not 
consider further Mederi's allegation that the city engaged in a 
"pay-to-play" scheme.  However, we note that the regulations do not 
prohibit a municipality from choosing HCA partners based on the 
unsolicited benefits they agree to provide to the community. 
 
20 
 
arbitrary, or capricious action in the city's recommendation 
that Mederi obtain site control of 260 Highland Avenue.17 
 
Mederi further challenges the city's HCA fee terms, arguing 
that the city improperly charged HCA recipients in excess of the 
community impact fee allowed by law.  Although this is an issue of 
concern, as discussed infra, Mederi does not have standing to 
contest the city's HCA fees because it never executed an HCA with 
the city.  "A party has standing when it can allege an injury 
within the area of concern of the statute or regulatory scheme 
under which the injurious action has occurred" (citation omitted).  
Revere, 476 Mass. at 607.  Mederi has not been required to pay 
these additional fees because it has not executed an HCA with the 
city; it therefore has suffered no cognizable injury. 
 
Thus, on this record Mederi has failed to sustain its heavy 
burden to demonstrate that the city acted arbitrarily or 
capriciously in its decision-making process.  See Attorney Gen., 
382 Mass. at 62. 
 
2.  Observations regarding the statutory and regulatory 
framework.  For the reasons explained supra, we affirm the Superior 
Court's dismissal of Mederi's suit.  However, the issues raised 
reveal potential inconsistencies in the interplay between G. L. 
 
17 Although Mederi apparently believes that it was misled, 
it does not argue that the city promised Mederi a slot in 
exchange for the tax payments. 
21 
 
c. 94G and the regulations promulgated to implement at least one of 
its implied goals, i.e., making the Commonwealth's marijuana 
industry equitable. 
The statutory scheme requires the commission to prioritize 
applicants that will benefit communities disproportionately 
affected by the enforcement of prior laws prohibiting marijuana 
sales and distribution.  Pursuant to c. 94G, the commission must 
adopt "procedures and policies to promote and encourage full 
participation in the regulated marijuana industry by people from 
communities that have previously been disproportionately harmed by 
marijuana prohibition and enforcement and to positively impact 
those communities."  G. L. c. 94G, § 4 (a 1/2) (iv).  To this end, 
the recreational marijuana act requires "prioritiz[ing] review and 
licensing decisions for applicants . . . who . . . demonstrate 
experience in or business practices that promote economic 
empowerment in communities disproportionately impacted by high 
rates of arrest and incarceration for offenses under [the 
Commonwealth's controlled substances act, G. L. c. 94C]."  St. 
2017, c. 55, § 56 (a) (ii).  See 935 Code Mass. Regs. 
§ 500.102(2)(a). 
We observe, however, that in practice the commission's 
regulations may fall short of accomplishing this goal.  The 
regulations call for economic empowerment priority applicants to 
receive "[p]riority application review" by the commission.  935 
22 
 
Code Mass. Regs. § 500.102(2)(a).  However, because municipalities, 
as the de facto gatekeepers to such priority application review, 
are not required to consider whether any entity seeking to enter 
into an HCA is an economic empowerment priority applicant, such 
applicants may receive no commission review at all.18 
Further, although we conclude that Mederi does not have 
standing to contest the payments the city requires of its HCA 
partners in excess of the community impact fee, see G. L. c. 94G, 
§ 3 (d), we acknowledge the concern raised.  The applicable 
statutory provisions and regulations are silent with respect to 
whether municipalities may mandate such payments; viable arguments 
may be made on both sides of the issue.19  Regardless, the practice 
of requiring HCA partners to make payments in addition to the 
 
18 We also note that because the commission considers 
applications on a rolling basis, 935 Code Mass. Regs. 
§ 500.102(1)(a), it may be unable to give priority review to 
economic empowerment priority applicants if such applicants do not 
win (or at least place) in the race to present a completed 
application to the commission. 
 
19 We note, however, that it is the commission's position 
that, under the current statutory scheme, its role is limited to 
reviewing license applications after an HCA has been executed.  See 
G. L. c. 94G, §§ 3 (d), 5 (b) (1); 935 Code Mass. Regs. 
§ 500.101(1)(a)(8).  In 2019, the commission voted to ask the 
Legislature for authority to review the details of HCAs.  In 
2020, the House of Representatives passed a legislative proposal 
that would have given the commission authority to review HCAs 
and additionally would have clarified that municipalities may 
not impose or consider fees other than the community impact fee.  
2020 House Doc. No. 4398.  The Senate did not pass the 
legislative proposal. 
23 
 
community impact fee has the potential to create an unfair 
advantage for municipalities and better-funded applicants.  
Importantly, it also may create a barrier to entry for prospective 
economic empowerment priority applicants. 
Implementing the framework governing the new recreational 
marijuana industry has revealed gaps that the Legislature and 
commission likely did not anticipate.  Closing those gaps would 
provide much-needed clarity. 
 
 
 
 
 
 
 
Judgment affirmed.