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Stirring the pot: Six months of legal adult use marijuana in Maine

April 10, 2021
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BANGOR – It was six months ago, give or take, when the State of Maine, nearly four years after its citizens voted to legalize recreational marijuana through a referendum vote in November of 2016, finally gave the go-ahead for retail adult use sales in the state.

By the terms of that law, adults 21 years of age or older with a valid ID are able to purchase up to 2.5 ounces of a combination of marijuana and marijuana concentrate that includes no more than five grams of marijuana concentrate.

In the half-year since storefronts began opening their doors in early October, the industry has seen steady and impressive economic growth, though as with any relatively new endeavor, there have been some growing pains along the way. The truth is that these current circumstances are the culmination of a gradual journey.

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A Brief Legal History of Cannabis in Maine

The journey to retail legalization was a lengthy one, though it should be noted that Maine has had a relatively positive history with marijuana compared to other states.

The prohibition against the drug in Maine was enacted back in 1913, part of the wave of anti-marijuana sentiment of the time. And for more than half-a-century, the status quo was maintained. But as the country crept into the 1970s, things slowly began to change.

It was in 1975 that the state passed legislation decriminalizing the possession of small amounts of cannabis, with the laws enacted the next year. This made Maine the third state to do so, following Oregon in 1973 and Alaska, also in 1975. A handful of states quickly followed over the next few years, thanks largely to the efforts of NORML, the National Organization for the Reform of Marijuana Laws.

The next leap forward came more than 20 years later, when citizens of Maine voted to legalize marijuana usage for medicinal purposes in 1999. More than 62% of the voting population approved the change by voting yes on Question 2.

Another major step occurred in 2009, when then-Governor John Baldacci signed into law a broader decriminalization of marijuana; possession of 2.5 ounces or less of cannabis became a civil infraction rather than a criminal one.

In the years that followed, a handful of municipalities would hold votes on legalization within their city limits, though not all of these efforts would ultimately pass.

But it was in 2016 that the true sea change would begin.

Question 1: An Act to Legalize Marijuana

In November of 2016, a citizen-driven referendum question hit the statewide ballot. The proposal would legalize the recreational use of marijuana in Maine for those over the age of 21, instituting a 10% tax along the way.

Perhaps unsurprisingly, it was a polarizing vote for many people, and while the measure passed, it was by an extremely thin margin – initial results had the gap at fewer than 5,000 votes. But when a recount effort looked to confirm those initial findings, the ayes had it. As of this writing, the 50.3% to 49.7% results remain the narrowest margin of any legalization legislation in U.S. history.

The law meant that adults not participating in the state’s robust medical marijuana program would be able to legally grow and possess personal use quantities of marijuana while also licensing commercial cannabis operations, including production and retail sales. It’s worth noting, however, that localities have the authority to regulate, limit or even prohibit cannabis operations within their jurisdictions.

Initially, the intent was for retail sales to begin in early 2018, with the delay in enaction allowing for the establishment of regulatory bodies and other agencies. However, in November of 2017, then-governor Paul LePage vetoed a bill that would allow for the taxation and regulation of legal cannabis, citing the conflicts with federal law. The veto was overturned a few months later, allowing the bill to become law.

The intent was for retail sales to begin in earnest in the spring of 2020. However, the circumstances of the COVID-19 pandemic led to a delay. Finally, in October of that year, after nearly four years of obfuscation and pushback, recreational retail cannabis sales arrived.

The Early Economics of Recreational Cannabis in Maine

Unsurprisingly, it turns out that there’s some real money involved when it comes to cannabis. It’s certainly no secret in Maine, where some sources show that marijuana is the most valuable crop in the state’s agricultural sector.

That’s right. More than potatoes. More than blueberries. Marijuana.

The lion’s share of that – well over $200 million in 2020 – springs from the medical marijuana side of things. No shock there, with recreational sales only kicking off in October. That being said, the recreational sector has seen significant growth over the past six months, with little sign of slowing down anytime soon.

The Maine Office of Marijuana Policy has done great work in tracking the numbers as the industry expands.

In that first month, Maine saw just over a million dollars in total retail sales (this includes usable marijuana, infused products and concentrates). November saw an uptick of approximately $200,000, while December’s numbers jumped nearly three-quarters of a million. And the upward trend has only continued into 2021.

The first three months of this year have seen ever-increasing sales figures. The month of January saw sales of just shy of 2.5 million. February’s number was a tick higher than 2.5 million. And then came March, the last month with data available as of press time. In that span of a single month, Maine saw $3,751,384 in total retail sales, an increase of 50% over the previous highest number.

All told, the total sales figures in the six months since retail sales began are impressive at just over $13 million. It’s worth noting too that the upward trend would seem to indicate that the market is finding its footing, and as more licenses are granted and more facilities open, the number is likely to continue to climb.

Curious as to how many transactions that is? Try over 180,000, with nearly 50,000 taking place in just the month of March.

And not that you need me to do the math for you, but the state’s 10% sales tax on that revenue means that in the last six months, retail marijuana operations have put over $1.3 million into Maine’s coffers. Again – that’s just sales tax, leaving aside any other taxation and other financial contributions from the industry.

Impressive numbers all – and getting more impressive by the month.

(View the accompanying charts – courtesy of the Maine Office of Marijuana Policy – for breakdowns of sales figures by types of cannabis, number of transactions and sales tax collected.)

OMP Licensing and Other Matters

As with any nascent industry, there has been a bit of a gold rush in Maine cannabis. Individuals and businesses are looking to get in on the ground floor of what promises to be a potentially lucrative market.

According to the OMP website, the licensing process for Maine’s adult use market involves three steps:

  1.     Conditional Licensure
  2.     Local Authorization
  3.     Active Licensure

The initial step of conditional licensure requires applicants to undergo a criminal history records check. From there, all applicants and employees must obtain an OMP-issued Individual Identification Card, or IIC. After that, the application is completed and submitted; within 90 days of OMP completing evaluation of all materials, the decision will be made to either deny the license or issue a conditional license. Conditional licenses are non-renewable and valid for one year.

Next comes local authorization. In order to receive an active license, applicants must gain approval from the municipality in which they seek to operate. In most cases, the municipality has 90 days to respond to an authorization request. If said municipality finds that the potential licensee meets their requirements, they may approve authorization, sending the information directly to OMP. OMP will then request additional material from the applicant.

Lastly, we have active licensure. Once all requested supplemental material is received by OMP – material that includes things like permit compliance and tax info, as well as any changes from the original application – the office will determine whether standards have been met. If they have, the applicant will be invoiced for the licensing fee; once payment is received, OMP will issue an active license valid for one year.

As of press time, the OMP had awarded 69 active licenses, broken down thusly: 25 Cultivation, 24 Stores (including two in Bangor), 18 Manufacturing and two Testing. However, there are significantly more applicants at various spots in the process. Currently, the total number of conditional applications – including conditional, pending conditional and conditional with jurisdictional approval – sits at 206 Cultivation, 232 Stores, 70 Manufacturing and four Testing.

Obviously, if even a fraction of these conditional licenses become active, the number of operations within the state is going to expand significantly.

A Conversation with a Cannabis Retailer

Matt Hawes is one of the managers at Brothers Cannabis, a retail marijuana outlet that recently opened in Bangor. He was kind enough to answer a few questions about what the process has been in opening this new store, as well as some thoughts on the state of the industry in Maine, both currently and in the future.

TME: What was the process involved in opening a retail marijuana shop? How long did it take and what steps were there?  

MH: In most Maine municipalities, including Bangor, adult use marijuana businesses are licensed by the state and local governments. These approvals are mainly concerned with assuring that the applicants and proposed business meet regulatory criteria. The state's criteria are mainly concerned with background checks on key persons related to the business, security concerns and the ability to follow regulations and particpate in the inventory tracking process.  The local criteria are typically more related to code and zoning requirements. It took us about four months to complete the process.

TME: What prompted you to want to get involved in this industry?  

MH: I have worked in legal cannabis for over 20 years, while my brother Greg has spent his entire career working in retail and food service. We viewed this as an opportunity to start a business together in the area where we grew up. 

TME: What kind of obstacles did you face in trying to get your business up and running?  

MH: One of the hardest steps is finding property. Due to federal banking and local zoning regulations, there are very few properties available that meet all requirements.

TME: How have you seen the business grow in the few months since retail shops began opening?  

MH: We feel very lucky to have experienced a steady, modest growth since we opened. Now we are hopeful that we can deliver an experience that makes our customers want to come back and tell their friends.

TME: In what ways do you expect the industry to grow in the future?  

MH: We think the most exciting growth development in the industry will be the advancements of new brands and products. The consumer experience will continue to mature, with specialty brands and products bringing options to match all of the unique ways in which individual consumers wish to incorporate cannabis into their lives.

TME: What advice would you give to someone looking to find a place within the industry?  

MH: Just like with any other career or business venture, know what you are uniquely good at and stick to that.

More than anything I would like to give a big show of thanks to our team. Our people are what make Brothers what it is. We try to put interesting, quality products in our inventory, and from their our staff takes it from there.  They make our guests feel comfortable and put great effort into connecting people with the best products for the experience they are looking for.  

An Old Head Perspective

I’m not a “good old days” kind of guy as a rule. I’m not ruled by nostalgia for a bygone time that probably wasn’t nearly as great as I’m beginning to remember it being. I don’t shout children off my lawn or shake my fist at the clouds. That said, we can’t control the things we wind up seeing through rose-colored glasses.

The ongoing decriminalization of marijuana is a big deal, pushing toward the eventual end of a generations-long prohibition that was largely unnecessary in the first place, despite what eminently mockable ’30s exploitation thrillers and poorly-conceived ‘80s PR campaigns would have you believe. The legalization of medical marijuana was a huge step, of course, but the move to adult-use retail sales is the great leap forward as far as this stuff goes.

Through regulation and taxation, pot can become a vital part of a state’s well-being. We’ve already seen a boom of sorts with regard to the cultivation, processing and sale of marijuana – the legalization of medical marijuana back in the late 1990s showed that even before the current situation – and that boom looks likely to continue as more and more people and business entities embrace the retail side of the industry.

Before long, the notion of knocking on the door of your friend’s shady cousin in an effort to get a baggie of weed whose quality and price you have no control over will be as antiquated as the idea of a speakeasy. No more will these people be left with little choice but to sit in a darkened living room, tapestries tacked over all the windows, and wait for Shady Cousin (who may or may not be wearing a shirt) to say his piece before completing your transaction, all while he proudly shows you his snake tank and/or sword collection.

I kid, of course, feeding into the stereotypes that in some ways led us to the place we are now. However, it is worth noting that the accessibility that comes with retail sales isn’t as big a selling point for those who have long since developed their own means for procuring marijuana. For many people who have been engaged with cannabis for any length of time, their current situation is perfectly fine, thank you very much.

These are people who remain content to buy on the black market, citing a number of reasons. Some people don’t care for the price differences. Others prefer a first-hand knowledge of the provenance of the product. Still others have been growing their own – or buying from someone who does – for years and have no desire to stop now. The reality is that a decades-deep black-market economy isn’t going to instantly go up in smoke simply because a prohibition is in the process of being legislated away. While retail options are welcomed by many – and seen as long overdue – that doesn’t mean that those options will meet everyone’s wants and needs immediately.

And that’s OK. This is a still-nascent industry, one that for years operated outside the law. Making a transition such as this one is never easy. It remains to be seen what the future holds for the recreational cannabis business, whether it’s six months from now or six years. But as things stand, it seems clear that the numbers – licensees, customers and most of all tax dollars – are going to climb higher. Possibly much higher.

And considering the business in question, that makes a lot of sense.

Last modified on Wednesday, 14 April 2021 16:08

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