The Maine Office of Marijuana Policy issued its first round of conditional adult-use marijuana business licenses Friday, giving provisional approval to 31 businesses to open growing operations, manufacturing facilities and retail shops in 10 Maine cities and towns.
Conditional approval has been granted to one nursery, 10 growing operations, four manufacturing facilities and 16 retail stores. Approvals range from a single shop in Newry, one of Maine’s smallest towns, to seven companies that want to open 10 marijuana businesses in Portland, Maine’s biggest city.
“We have said the adult use industry will launch in spring 2020,” said Erik Gundersen, director of the Maine Office of Marijuana Policy, in a prepared statement Friday. “Today’s announcement moves us another step closer to honoring that pledge.”
But a conditional state license is just the first step in a three-stage licensing process. The applicant must obtain local authorization, which can take anywhere from two weeks to a year depending on the town or city, before the business can return to the state to obtain a final active license.
Maine won’t issue active licenses until it has a testing lab ready, with all its licenses and certifications, to run the health, safety and potency tests required under state law. Currently, four labs are thinking about entering the Maine market, Gundersen said, but only one is close to being fully licensed.
The 31 conditional state licenses were granted from among more than 200 applications submitted to the state since it made recreational license applications available in December. The office released a list Friday of the more than 300 people seeking adult-use business licenses.
With provisional license in hand, those applicants can now bring a local authorization form to their intended host municipality for approval. Host towns have 90 days, or 180 days if they seek an extension, to respond to the applicant’s request for local authorization.
Some Maine municipalities, such as South Portland, are already working with marijuana applicants.
The Office of Marijuana Policy is preparing to receive completed local authorization forms, as well as continue to review pending conditional license applications, through April, when Gundersen expects to issue its first active state licenses; and June, when retail sales are expected to begin.
The delay between issuing the first active licenses and the first sales is intended to allow cultivation, manufacturing and, most important, Maine’s first licensed testing lab to come online before the recreational market opens to consumers.
“Setting such a date will ensure stores have time to stock their shelves and allow product to build up in the system to withstand the demand for marijuana and marijuana product in the first few days of legal retail sales,” Gundersen said. “This approach has been used in other states.”
This timeline only works if one of five testing labs that have expressed interest in entering the Maine adult-use market can complete its certification and license process. Gundersen said the state is working closely with those lab applicants to help them navigate the application process.
“Testing bottlenecks have occurred in many states during implementation,” he said. “To avoid a similar situation in Maine, we will continue to work closely with our prospective testing facilities to ensure they are able to provide this new industry with adequate testing in a timely manner.”
From legalization to legal sales, Maine is inching through the slowest adult-use marijuana rollout in the U.S., with economists saying the three-year wait for stores to open will have cost Maine more than $82 million in taxes and 6,100 industry jobs.
Maine budget forecasters estimate recreational cannabis sales will bring in $84 million in fiscal year 2021, $118 million in fiscal year 2022 and $166 million in fiscal year 2023. It also is standing by its excise tax revenue projections, which stem from a 10 percent tax on the wholesale market.
Maine voted to legalize adult-use marijuana in November 2016. After legislative rewrites, gubernatorial vetoes and contractual snafus, Maine expects to record its first adult-use sales in mid-June, or 1,315 days after voters narrowly approved full-scale legalization at the polls.
The seven states that legalized recreational marijuana use and sales before or at the same time as Maine – Colorado, Washington, Alaska, Oregon, California, Massachusetts and Nevada – required an average of 497 days from legalization to recording their first sales.
Illinois launched its adult-use market on Jan. 1 after just 160 days, the fastest rollout in U.S. history.
Much of the delay rests on the shoulders of former Maine Gov. Paul LePage, an avowed legalization opponent. His successor, Janet Mills, created the Office of Marijuana Policy in February 2019, which began working toward implementation of the 2016 referendum results from scratch.
If sales begin as planned in June, the office would have completed its work in about 500 days, which is almost exactly how much time the seven states that legalized adult-use sales before or at the same time as Maine needed to do the same.