Maine, a state that legalized recreational marijuana in 2016, is finally on track start selling weed to consumers. On Thursday, Maine Governor Janet Mills signed a bill establishing rules and regulations for a regulated recreational marijuana industry. Retail marijuana sales still won’t begin until March 2020, two and a half years after voters said yes to legalization. The rules themselves, however, will take effect in September 2019, making Maine the eighth state in the U.S. to move toward regulated sales.
But after months of sharp debate and criticism about some of the proposed regulations, the bill Gov. Mills signed is more relaxed than the version state regulators had pushed for. Still, Maine will have some of the strictest residency requirements of any legal-weed state in the U.S. And those requirements will decide exactly who in Maine will be able to legally grow, sell and purchase cannabis.
Recreational Marijuana Rules Aim to Keep Cannabis Industry Profits In Maine
Getting a regulated recreational marijuana program up in running after voters approved the measure in 2016 hasn’t been easy. Gov. Mills’ Republican predecessor, Paul LePage, vehemently opposed recreational legalization and vetoed previous bills to begin retail weed sales. But since Gov. Mills took office in January 2019, Maine has moved quickly to establish a regulated industry. In her first month in office, Gov. Mills established Maine’s Office of Marijuana Policy. Working alongside well-known cannabis industry consultants based in Colorado and California, the Office produced a set of draft regulations in under three months.
That 74-page rulebook gave Maine residents and prospective business owners their first real glimpse at what the state’s regulated industry would look like. And its publication kicked off two months of public hearings and debate about the proposed rules. During those hearings, the chief criticism was that Maine’s rules would crush small, craft cannabis growers and medical marijuana caregivers—the same businesses that sustained Maine’s medical marijuana program. The rules, critics said, gave larger corporate producers a competitive advantage over smaller businesses.
As a result, the Office of Marijuana Policy worked to craft strict residency requirements. The goal being to keep Maine’s marijuana industry in Maine, benefiting Maine residents. And even though those residency requirements were watered-down in the version Gov. Mills signed into law Thursday, they’re still the strictest in the nation.
Are Maine’s Strict Residency Requirements a Mistake?
For example, only people who have been Maine residents for at least four years can apply for a cultivation or retail license. Same for anyone who wants to manufacture marijuana products like edibles or who owns a majority interest in a cannabis business.
Initially, however, Maine regulators wanted to drastically limit out-of-state ownership or control of any Maine marijuana business. But after Maine’s largest medical marijuana company, Wellness Connection of Maine, threatened to sue over the rules, state regulators backed down. Wellness Connection has significant financial ties to Acreage Holdings of New York, one of the largest U.S. cannabis companies.
Maine isn’t the first weed-legal state to implement residency requirements in an attempt to keep industry profits from flowing out of state. Washington, Colorado, Oregon, and Massachusetts all initially embraced residency requirements. But after struggling to monitor and regulate corporate investment structures and in the face of difficulties obtaining in-state investment, Oregon and Colorado repealed and relaxed their residency requirements.
Maine’s goal with its own residence requirements was to create economic incentive for in-state investment. Regulators wanted to create a market that benefitted Maine residents and businesses, not massive out-of-state corporations. The version of the recreational marijuana rules signed by Gov. Mills, however, has no language limiting out-of-state control of Maine marijuana businesses.
What Maine’s Recreational Marijuana Rules Mean for Consumers
With legal weed sales already underway in Massachusetts, it’s unclear how much marijuana tax revenue Maine has already lost to its New England neighbor. But industry analysts predict Maine’s legal weed market could grow to 107 million in 2020. It could also produce as many as 5,400 jobs when fully underway. According to analysts, about 13 percent of Maine’s population, or 173,000 people, will form the consumer base for the cannabis industry. Recent survey data suggests anywhere from 25 to 35 percent of Maine residents consumed marijuana at least once in the previous six months.
As for prices, Maine’s cannabis consumers should expect to pay illicit market prices, at least initially. As retailers pay for licenses and lab tests, prices will peak within 18 months before dropping off, say industry consultants.
