Local Approval Becomes Next Obstacle in the Rollout of Maine’s Adult-Use Cannabis Market

Maine voters approved a ballot initiative in 2016 that legalized adult-use cannabis, and now, four years later, the industry is still waiting to launch after a series of legislative and regulatory hurdles, the COVID-19 pandemic, and now, a new obstacle: local approval from the state’s municipalities.

Maine’s Office of Marijuana Policy (OMP) issued its first round of conditional adult-use cannabis licenses for cultivation, manufacturing and retail operations in March, and conditional licensees must now obtain local authorization before they can receive a final active license from the state.

OMP Director Erik Gundersen told Bangor Daily News that this authorization from the state’s municipalities may be delayed, as many communities remain shut down in response to the coronavirus. Many local governments have not yet opted in or out of hosting cannabis businesses, let alone drafted their local ordinances to outline how they will regulate the industry within their borders.

“With the local authorization piece, the second stop in the licensing process, towns and cities across the state are really closed,” Gundersen told Bangor Daily News. “Even though 87 conditional licenses are out there, the local authorization forms aren’t coming back at a volume where we can actually start the program.”

The OMP already decided last month that the launch of Maine’s adult-use market would be pushed back due to social distancing concerns stemming from the COVID-19 pandemic. While the market was originally expected to open in June, it has been delayed indefinitely as the state continues to deal with the coronavirus outbreak.

Each community must opt in to hosting adult-use cannabis businesses and must then adopt an ordinance, and while more than 40 have done so, according to Bangor Daily News, Gunderson wants to ensure that there will be enough adult-use dispensaries to meet consumer demand before the market launches.

Portland, Maine’s largest city, has not yet approved its local ordinance, although city council voted last month to issue temporary cannabis testing lab licenses before the city’s ordinance is finalized to ensure a quick launch of the market after the COVID-19 pandemic.

Testing is one of the biggest potential bottlenecks for the market, Joel Pepin, co-founder of vertically integrated cannabis operator JAR Cannabis Co., told Cannabis Business Times. JAR has operated in Maine’s medical cannabis market since 2012 and has received five conditional adult-use licenses from the state.

“You could license all the stores and cultivators you want, but if you’re not testing the supply, you’re not going to have much of a market,” Pepin said.

Kennebunk, for example, planned to vote on opting in for testing labs on April 6, but the vote has been pushed back to July due to the pandemic, Pepin said.

“There have been some recent, positive developments in some of the towns we’re associated with,” he added. “The towns have been moving the work on marijuana forward. A lot of these town have [spent] one [to] two years or more [on] crafting their ordinance. It’s a process, so for all the work that’s gone into it, it’s not something that’s just tossed to the wayside.”

Portland City Council is expected to vote on its ordinance as soon as next week, and is proposing to cap the total number of medical and adult-use dispensaries at 20, using a point system to award the limited number of retail licenses, Bangor Daily News reported.

Windham, where JAR has operations, plans to vote on its ordinance by the end of May, Pepin added.

“I think towns also recognize the fact that OMP is still working at full steam, and … the state, still … intends to launch the market as quickly as they can within [reason] with everything that’s going on right now,” he said. “Again, anything can happen to push that back. It’s been pushed back so many times, so we all understand that’s a possibility, but that’s what it seems like right now.”

Pepin has been largely pleased with the OMP’s work since the office launched a little over a year ago, he added.

“They’ve been able to basically hit every single timeline they’ve set out for themselves,” he said. “I believed we were right on track to have a June or July launch, which was what was on the table before COVID. That gives me confidence that [the adult-use market will launch] as soon as social distancing guidelines are understood, and everyone feels comfortable about having these stores open.”

In addition, Pepin is hopeful that more municipalities will open up to the idea of hosting adult-use cannabis businesses within their borders following the COVID-19 pandemic, when Maine’s medical cannabis operators were deemed essential under the state’s stay-at-home order.

“A few years ago, this was completely under the radar and illegal, and now it’s essential—what a moment in history for cannabis companies,” he said. “I think there are people looking at … the marijuana industry in Maine in a different way now, through all of this.”