The Maine Senate on Wednesday passed the bill to launch the state’s adult-use marijuana market, putting the legislation on the brink of heading to Gov. Paul LePage’s desk with veto-proof margins from both chambers of the Legislature.
The bill passed by a 24-10 margin one day after being approved 112-34 in the House, which killed a more liberal version of the bill last year by sustaining LePage’s veto. The bill is likely to head to LePage after more legislative action Thursday.
The votes, and their veto-proof margins, came as good news to groups that represent cannabis business interests, such as Maine Professionals for Regulating Marijuana, which lobbied Maine’s lawmakers to pass a business-friendly bill. Last year, the group’s board members said that a long delay from legalization to licensing would send potential investors packing.
“Investors and entrepreneurs want legislative certainty to evaluate risk and ensure (that) investments in equipment, construction, et cetera, will comport with state law,” said Portland attorney Ted Kelleher. “We think that some investors left and will not be back, but also feel that if (the bill) becomes law, it will provide enough certainty to attract new investment.”
Business consultant Tom Mourmouras, who runs Fiscal Therapy Financial in Portland, said most of his cannabis clients are local and participate in the state’s medical marijuana program, including a number who plan to transition into adult-use when the market is open.
Those clients have used the 16 months since legalization to hone their business plans, work with their host cities and towns, and prepare for legal compliance, he said. They are watching the pending medical marijuana reform bill as closely as the recreational bill, he said.
RENEWING OUT-OF-STATE INVESTOR INTEREST
But not everyone decided to bide their time in the medical program during the delay, he said.
“A handful of clients have also used this delay to pursue licensing in Massachusetts with the intent of coming back to Maine when the market is ready,” said Mourmouras, who is himself pursuing a new medical marijuana storefront operation in South Portland.
Getting adult-use “back on track” will likely renew out-of-state interest in Maine, Mourmouras said.
He said that many of his clients who plan to stay in the medical marijuana industry will be happy if the adult-use bill is adopted because it will mean an end to the practice of cannabis gift deliveries, which many caregivers and even dispensaries blame for a drop-off in patients and sales.
Companies that have popped up across Maine are advertising free marijuana to customers willing to pay a fee equivalent to the value of the marijuana in exchange for delivery, a T-shirt, a painting or even a hug. Police have taken a hands-off approach to what some describe as a legal loophole.
The legislative committee tasked with overhauling the legalization law passed by voters in a November 2016 referendum had struggled to strike a balance between providing economic opportunities for Maine residents and the out-of-state investors who want to underwrite the first startups. Lawmakers eliminated the cap on grow licenses, which helps big businesses, but will give out the first licenses to Mainers who have filed a tax return here for at least four years.
Sen. Roger Katz, the Augusta Republican who co-chaired the committee that wrote the bill, said the drafting the measure involved a process of compromise among a group that ranged from those who hate cannabis but realize it is legal, to those who want to treat it like any other plant.
“We listened and we listened and we listened,” said Katz, who voted against legalization of adult-use marijuana in the 2016 referendum. “We talked to all the stakeholders, we looked at other states and what they’ve done. … We tried to thread the needle and be right in the middle of the pack.”
Katz ticked off what he thinks makes the compromise bill better than the current law of the land, the Marijuana Legalization Act approved by voters. The personal possession and home grow freedoms of that law are allowed, but sales are delayed until Maine issues licenses.
The compromise bill cuts the personal plant count down from six to three; eliminates deliveries, internet sales, drive-thru windows and social clubs; increases the tax rate from a 10 percent sales tax to an effective 20 percent tax; and funnels 6 percent of pot taxes to law enforcement.
“If for some reason this bill fails, the cheers that you will hear are from those who profit from the current illicit gray market,” Katz said.
Analysts say the adult-use market will generate about $23 million a year in tax revenues once it gets up and running, Katz said.
OPPOSITION TO COMPROMISE BILL REMAINS
The bill met with vocal opposition from those who still oppose marijuana legalization, including Sen. Scott Cyrway, R-Kennebec, a former DARE officer who said the bill would normalize the use of a drug that federal authorities compare to heroin and cocaine.
Sen. Eric Brakey, R-Auburn, a marijuana proponent, opposed the compromise bill because he thinks it went too far in the other direction to achieve political acceptance, eroding the rights of residents to do what they want on their own land and pushing marijuana taxes too high.
If the bill continues on its current path, Mainers can expect to see the first recreational business licenses issued in the spring of 2019. It would allow recreational retailers to buy marijuana from former medical growers, a provision that would help retailers stock their shelves and potentially get Maine’s recreational market up and running quickly.
After a final review by both legislative chambers Thursday, the adult-use bill will head to LePage, who has 10 days to decide whether to sign it, veto it or allow the bill to become law without his signature.
The cannabis legislation:
- Prohibits use in social clubs.
- Eliminates deliveries, internet sales, drive-thru windows.
- Reduces the number of plants adults can grow at home from six to three.
- Reserves preferences for retail licenses to Mainers with at least four years residency.
- Sets the likely availability of retail licenses as spring of 2019.
- Gives municipalities the authority to regulate local cannabis businesses.
- Imposes a 20 percent sales tax.
- Distributes 6 percent of tax money to law enforcement.
Penelope Overton can be contacted at 791-6463 or at: