Politics

Maine to Open Recreational Pot Market, as Region Stalls

avatar Hilary Corrigan / Aug 14, 2020

Maine REC sales are set to begin in October, four years after voters’ approval.

A Friday press release from the Maine Department of Administrative and Financial Services’ Office of Marijuana Policy (OMP) announced retail sales will start Oct. 9. The office plans to issue the first licenses on Sept. 8.

Maine joins Massachusetts in the New England REC market. Industry insiders expect the rest of the region to shift over the next couple of years, as ongoing legislative efforts in nearby states gather support—spurred partly by the need for additional tax revenue.

Maine has had legal MED for about a decade. Voters approved REC in 2016. But then-Gov. Paul LePage (R) vetoed related legislation twice. Legislators overrode the second veto, allowing for a regulatory structure to develop with a law that took effect in 2018.

Gov. Janet Mills (D), inaugurated in 2019, signed legislation that year that, in part, authorized OMP to set final REC rules. OMP did the rulemaking work through that year, while also scaling up the office and developing applications, forms and other systems.

This year, COVID-19 delayed progress. OMP postponed a planned April rollout because of the pandemic. In Friday’s press release, OMP Director Erik Gundersen cited the emerging public health pandemic and the absence of a testing facility.

But with the public health community, municipalities and the industry, “We have used the last few months to ensure this new industry is introduced to Maine consumers in a manner that is as responsible as possible,” Gundersen stated.

Maine’s process to get an active license includes conditional licensing and local authorization. OMP started issuing conditional licenses in March for cultivation, manufacturing, testing and retail sale. So far, 194 establishments have gotten conditional REC licenses. Another 166 applications are pending.

OMP plans to release the number of active licenses issued and the identities of licensees on Sept. 8. It expects REC licensees to spend the following month getting ready to open. That includes harvesting and processing cannabis, ensuring products meet mandatory testing requirements, stocking store shelves and putting social distancing and other guidance into place.

Friday’s press release notes this is “a time when public interest may attract a significant consumer presence to their retail locations.”

Is the Green Mountain State next?

Karen O’Keefe, Marijuana Policy Project’s Director of State Policies, expects a big shift in New England within the next couple of years.

“I’m cautiously optimistic” that all or most of the region will have REC within a few years, O’Keefe said.

Like Maine, Massachusetts legalized REC in 2016. But it started REC sales in late 2018, generating nearly $394M within a year. Vermont has legalized, allowing possession and cultivation, but has not approved sales or set up a regulatory structure.

Both Vermont’s senate and house have approved legislation setting up a regulatory system for commercial cultivation and sales, O’Keefe said. A conference committee formed to work out differences in March. COVID delayed that work. But the legislature will reconvene later this month and could resume the effort.

O’Keefe said MPP is cautiously optimistic that “they’ll finish the job and legalize sales.”

A report earlier this month from cannabis law firm Vicente Sederberg LLP projects the Green Mountain State could see a total of $175M in cannabis sales tax revenue through 2025. It projects sales totaling close to $1B over that stretch.

“To achieve these sales and taxes, Vermont legislators would need to expedite licensing to start adult-use sales in 2021,” the report states.

It notes that Vermont has a small population, but one of the higher pre-legalization cannabis consumption rates and high per capita demand. The state would get a lot of its revenue from tourists and visiting cannabis consumers from non-REC states’ counties bordering it.

The report expects “border consumers” to “contribute significantly” to Vermont’s sales, before their own states have dispensaries. But if New York or New Hampshire open stores first, they would eat into that demand.

“Although Vermont is small in both size and population, tourism—along with border consumers from New York and New Hampshire—would allow the Green Mountain State to generate significant tax revenue and economic activity from legal cannabis,” the report states.

What about the rest of New England?

COVID has slowed efforts in other states too.

MPP is hopeful about Connecticut’s chances next year. A REC bill from Gov. Ned Lamont (D) had support from leaders of both the state’s House and Senate. But it stayed in a joint committee due to COVID.

“It was very, very, very disappointing,” O’Keefe said. But “the work’s been done” for a new bill next year, and “there’s a good structure to start from.”

Legislative efforts in New York, which borders three of New England’s six states, also failed to progress. That’s partly because of COVID and partly because the legislature and Gov. Andrew Cuomo (D) have differed over control of the revenue, O’Keefe said.

Rhode Island’s legislature has adjourned. But Gov. Gina Raimondo (D) supports legalization and has included REC in a budget bill. However, it has sparked concerns over provisions for state-run stores. MPP has warned of shaky legal ground with that, as long as cannabis remains illegal at the federal level.

“Not a good idea,” O’Keefe said.

New Hampshire’s House of Representatives has passed a bill allowing cultivation and possession, but not sales, O’Keefe said. The Senate and Gov. Chris Sununu (R) do not support it. O’Keefe expects a new bill next year and possibly a more supportive Senate after the election. She calls the state a very real possibility for REC next year.

“We’re optimistic,” she said. MPP has also called for advocates to focus on candidate elections in the state’s September primary and in the November election.

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