In November 2016, Maine voters passed Question 1 to legalize, regulate and tax marijuana like alcohol, but industry professionals are unsure when the state’s recreational program will be rolled out and when retail sales will begin. The bill allowed for possession of two and a half ounces of marijuana, home cultivation and five different license types: retailer, cultivator, product manufacturer, laboratory and social club.
David Boyer, Maine Political Director for Marijuana Policy Project, said the anticipated delay in the rollout of the recreational program and retail sales is not any more of a delay than MPP originally anticipated when the legislature implemented the moratorium on rulemaking until February.
In an interview with Cannabis Business Times, Boyer said that MPP, which was the primary sponsor of the bill, had local initiatives in Portland, and they organized a signature drive in 2015 where they collected the 100,000 signatures needed to get the legalization issue on the ballot.
In January, Maine’s legislature passed LD 88, an emergency bill that set the age limit for adult use at 21 and older, set a personal possession limit of 5 grams and delayed the rulemaking deadline to February 2018. The legislature then established a Joint Select Committee on Marijuana Implementation to create the regulations of Maine’s adult-use program.
The next bill passed by Maine’s legislature, LD 243, transferred the authority to oversee the recreational marijuana program from the Department of Agriculture, Conservation and Forestry to the Bureau of Alcoholic Beverages and Lottery Operations within the state’s Department of Administrative and Financial Services (DAFS). The bill is currently sitting on the Appropriations table, waiting to go to the governor for approval, per MPP.
Diane Czarkowski, founding partner of the Colorado-based consulting firm CannaAdvisors, said voters might not have expected the committee to change elements that were outlined in the original bill. She also pointed out that every time a change is made, the legislature is required to have a period for public comment and a vote on the changes, which delays the program rollout.
Delays for Potential Cannabis Business Owners
Maine has medical marijuana caregivers and dispensary owners who are thinking about entering the new recreational market, as well as new businesses hoping to get recreational licenses, but they are at a standstill until regulations are finalized, Boyer said.
“And that’s the thing about this industry. Your business model has to be dynamic and able to change when a new policy comes out that maybe you didn’t expect.” – David Boyer, Maine Political Director, MPP
“Everyone’s kind of in a holding pattern, waiting for the rules to be finalized so they can make the correct business plans and decisions,” he said. “And that’s the thing about this industry. Your business model has to be dynamic and able to change when a new policy comes out that maybe you didn’t expect.”
Czarkowski also believes those looking to get cultivation licenses in Maine should wait for the regulations to be finalized before laying out official plans.
“Even if you had a perfectly suited building, and you thought that it would be within new regulations, zoned properly and all that, it would be a really big risk to move forward even on construction of these properties,” Czarkowski said. “All of these things take time, and it’s a bummer.”
According to Czarkowski, the delay will not only affect start-ups entering the industry in the new recreational market, but also the businesses currently operating as medical marijuana cultivators and dispensaries.
“They can’t start selling to anyone who’s 21 and over [without a medical card]; they have to wait until the new rules come out for recreational use,” she said.
Boyer said MPP is satisfied overall with the way the program is looking, but there are still elements that they plan to fight against when the omnibus bill is released in a few weeks. He said the organization is glad the legislature removed the cultivation cap that was in the original initiative, which will hopefully expand the marketplace and allow more businesses of all sizes to get involved.
“It’s created a lot of opportunity,” he said.
MPP is not as pleased with the proposed ban on social clubs and on-site consumption, Boyer said, and the organization plans to push back on these proposals at a public hearing on the omnibus bill that will be held at the end of September. Boyer said that the committee has not yet decided whether to prohibit sales to out-of-state individuals, and he noted that if they are going to sell to tourists, it is important that they have a legal place to use marijuana.
“We already have thousands of social clubs in Maine…They’re called bars and they serve alcohol, a far more dangerous substance than marijuana, so we’re not sure about the fear from the committee on that,” Boyer said.
As far as a realistic timeline for recreational sales to begin, Boyer said that once the omnibus bill is released in September, the legislature will be back for a special session in October to move the legislation forward, or they may wait to adjourn until the next session in January, which would be the latest that the new rules could be approved.
Adult-Use Licensing
“At that point, once it does officially pass, they work on the rules,” Boyer said. “And the good thing is this committee has done a lot of the rulemaking already through statute, through the proposed omnibus bill, so that will save some time hopefully from research that needs to be done about big policy questions.”
Boyer said that a testing bill has been passed which will allow laboratories to get licensed, and he hopes the committee will then issue the cultivation licenses first so that when dispensaries are licensed, retailers do not have empty shelves.
Boyer hopes that if the committee continues working diligently and if there are no more delays, recreational dispensaries will be operational by summer 2018, but said there is a chance the retailers may only just be licensed by then. He said the application process will most likely open next spring, once all regulations are in place, and licensing will follow.
Czarkowski also agrees that the program will not be rolled out by the February 2018 deadline.
Czarkowski believes that the only way recreational sales could start by the February deadline would be if regulations allow the existing medical operators to make a one-time shift to the recreational market, where they could sell their inventory in the adult-use program until recreational businesses are up and running.
“I don’t see it happening until maybe mid-next year, and that’s if there aren’t any more setbacks,” she said.
Czarkowski did point out that Maine was one of the first to legalize medical marijuana in the East, which may make lawmakers and residents more comfortable with recreational legislation.
Medical marijuana has been legal in Maine since November 1999, when voters passed Ballot Question 2, the state’s medical marijuana law, which has since been improved by a 2009 ballot initiative, Question 5, allowing for the eight currently operational medical marijuana dispensaries and adding qualifying conditions.
“I think Maine definitely has the most functional medical marijuana program and probably the most industry-movement-friendly initiative,” Boyer said. “The law that’s coming out is pretty good and will probably be pretty good to small- and medium-sized farmers, which is, I know, a concern for some in the industry about making sure everyone has a place.”
“It’s really important that they get this in place as quickly as possible,” Czarkowski said. “Because one thing that we’ve also found by going through a similar thing in Colorado is that many, many medical patients wait for these adult-use programs to get implemented because they don’t want to go through the process of being on a registry.”
She also pointed out that many people have conditions that could be helped by cannabis use, but those conditions are not on the list of qualifying conditions, so they must wait for the state’s adult-use program to roll out.
“And certainly the longer they take to roll out this program, the longer people will rely on the black market, which isn’t controlled by any kind of regulation, and that’s the biggest concern…the quality that people are getting,” Czarkowski said. “We want to make sure it’s safe.”
credit:cannabisbusinesstimes.com
