Lawmakers decide how to divvy up 20% tax on retail marijuana

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A legislative committee completed a sweeping rewrite of Maine’s recreational marijuana law Thursday that would double the tax rate, provide a cut to host towns and give Maine residents a two-year head start in the market.

But committee leaders are worried that the LePage administration will scuttle the bill, either through an outright veto or delayed implementation, even if the legislation is passed during a special legislative session next month.

Republican Sen. Roger Katz of Augusta, co-chair of the Marijuana Legalization Implementation Committee, said the panel has gotten almost no help from state agencies when it sought counsel, even on key issues such as taxation.

“The message to our colleagues is going to be, ‘You have the choice. You can vote for a reasonable bill, or you can vote for chaos,’ ” Katz said. “And that is going to be the same thing with respect to implementation.”

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The joint committee adopted the bill on a 13-2 vote, with two members absent. The committee started its work on the now-70-page bill seven months ago, four months after voters legalized adult-use cannabis at the polls. Highlights of the bill include:

• A 10 percent sales tax and a 10 percent excise tax based on weight. The citizen-passed law called only for a 10 percent sales tax.

• A town that hosts a retail store or grow operation would get 5 percent of state taxes collected from those facilities.

• A town that hosts any adult-use business would get 1 percent of all state marijuana taxes collected throughout Maine.

• Applicants for any recreational marijuana license would be required to have lived in Maine and paid taxes here for at least two years.

• Property owners couldn’t have more than 12 adult-use plants growing on their property regardless of the number of residents living there, but towns could vote to expand that limit to 18 plants.

• Adult-use marijuana facilities could not be located within 1,000 feet of a school. But the state would give a town the authority to reduce the buffer to 500 feet, if it so chooses.

Also, anyone who holds both a medical marijuana and an adult-use license would be allowed to grow and process both kinds of cannabis in the same building, but not the same area at the same time.

Retail stores could sell both kinds of marijuana in the same building if they hold both kinds of licenses, but only if they have separate entrances and separate counters, much like what is required in Colorado.

Law enforcement would receive 6 percent of state marijuana taxes that remain after local shares are handed out, and 6 percent would go to public awareness campaigns and youth prevention. The rest would go to the state’s General Fund.

Provisions to allow internet and drive-up sales, to let medical marijuana dispensaries convert from taxpaying nonprofits to for-profits, and to permit a one-time transfer of medical plants into the adult-use market were killed.

Katz said the bill regulates and oversees a new industry in a way that discourages an underground market, while enacting protections and benefits for Mainers.

“It gives an honest advantage to Maine citizens by giving them the first opportunity to participate in every facet of this industry,” Katz said. “It taxes in a fair and appropriate way. It does everything we can do to protect our youth and to allocate resources to public safety. It does so in a way that I think is generally simple and understandable to Maine people.”

But committee members worried the bill might never become a reality, even if it gets support in the Legislature next month. Leaders repeatedly asked for state help to draw up the new rules, but were usually ignored.

Committee co-chair Rep. Teresa Pierce, a Democrat from Falmouth, said she hopes Gov. Paul LePage will follow in the footsteps of other state governors who opposed legalization but still implemented the will of the people.

“I find it – I’ll say it – appalling that we have heard this might not be acted upon,” Pierce said. “It is wildly frustrating to have worked nine months on something and know that that might be the outcome.”

She said she hoped the public would put pressure on LePage to act.

“It is a good bill,” Pierce said. “It should rightfully be implemented.”

Rep. Lydia Blume, D-York, served on the committee and agreed.

“This very important citizens referendum was passed by the citizens of Maine and should be respected,” Blume said. “We have worked here as a team to respect it and to make it better. To not have the cooperation of the executive, to have him playing games with us, I find it appalling.”

Katz said he had not talked with LePage about the bill directly, but had been told second- and third-hand that the governor wasn’t interested in implementing the bill even if it becomes law. He held out hope that LePage would come around.

“To me, there’s only two groups of people who ought to be wanting to make sure this regulatory system gets put in place – people who want legalization of marijuana and people who don’t want legalization,” Katz said.

Rep. Patrick Corey, R-Windham, chided colleagues for repeating hearsay. But Rep. Kimberly Monaghan, D-Cape Elizabeth, said LePage’s actions speak louder than words.

“I think it’s wildly inappropriate that we haven’t had any type of assistance from agencies when we needed it most,” Monaghan said. “It’s obvious. It’s not like we are imagining things.”

Committee members looked for ways to force LePage’s hand by writing deadlines for action or default measures into the bill, such as allowing caregivers to sell adult-use cannabis if licenses aren’t issued.

But analysts told the committee that there was no way to force licensing to occur because the state agencies must go through the rulemaking process before they can even begin accepting license applications.

Advocates celebrated the committee vote even as they looked ahead to the coming special session, although they believe they will need to secure a two-thirds majority to override LePage’s expected veto.

LePage has not said whether he would veto a legalization bill, but he has spoken out against legalization in the past. Advocates hope he will stand behind a re-election campaign pledge to support the will of voters on legalization.

“I think this is going to be a successful implementation of what the citizens voted on. It’s not the exact language that the citizens voted on, but it involved a lot of stakeholders and it went through a robust review process,” said Paul McCarrier, president of Legalize Maine. “So now we are going to continue to make sure that the citizens’ will gets implemented correctly and that Maine citizens come first in this new, burgeoning industry.”

David Boyer, director of the Maine chapter of the Marijuana Policy Project, said he expects LePage will veto the bill, but he is still optimistic it will become law.

“I think we can put together a strong coalition of Republicans and Democrats to get to two-thirds,” he said. “Not getting two-thirds puts us a year behind (opening retail centers) and even further behind states like Massachusetts, Nevada and California, and only encourages the illicit market.”

Corey and Rep. Craig Hickman, D-Winthrop, were the two dissenting votes. Corey objected to the way cultivated marijuana would be measured, and Hickman opposed limits on personal grows for big rural parcels.

A final written draft of the bill won’t be complete until Oct. 10.

Much of the committee’s heavy lifting occurred this week in work sessions held after a five-hour public hearing Tuesday that drew hundreds of people to the State House to share their concerns and personal stories.

Penelope Overton can be contacted at 791-6463 or at: poverton@pressherald.com or Twitter: PLOvertonPPH

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