Recreational marijuana is available in Maine for the very first time. Adults 21 or older can now purchase up to 2.5 ounces of marijuana or marijuana concentrate that contains no more than 5 grams of concentrate. Adults can also grow up to 6 flowering marijuana plants and 12 immature plants, with no limit on seedlings. Sales of adult-use marijuana began October 9th, but not without a few hiccups.
The Legalization of Recreational Marijuana in Maine
Recreational cannabis has been legal in Maine since November of 2016. It passed by a narrow margin, with 50.26% of the state agreeing it should be legal. Today, Maine has the 6th biggest demographic of cannabis users in the United States – researchers say about a fifth of Maine residents admit to using cannabis in the past year. Its medical marijuana market is booming. That market accounted for $111 million in sales – more than blueberries, maple syrup, and oysters combined.
The time span for when voters okay’ed adult use and when sales actually started up was a bit longer than average, compared to other states that began sales in years prior. Most states have taken a year or two to get things up and running.
After just under four years of wait time between when recreational cannabis became legal and when it hit shelves, some dispensaries still have some time before they can start selling. On opening day, there were nine dispensaries licensed to sell recreational marijuana in the state of Maine, but only six were operational. The first day of sales totaled at $94,643 from those six locations. Since recreational cannabis is taxed at 10% for the state, that means the State got an extra $9,464 in extra sales tax from opening day.
By the end of the holiday weekend, sales passed a quarter million dollars. 6,430 total transactions netted $25,841.16 in sales tax for the State of Maine by the end of the day Monday, October 12th.
The other three dispensaries of the nine licensed are waiting to open because of a shortage of cannabis that’s been legally tagged and tested. Even if a business has a license related to medical marijuana, it would need brand new licenses to operate in the realm of recreational cannabis. One of those nine dispensaries, Hi-Lo in Poland, Maine, earned its license on October 9th, the first day of sales. The Maine Office of Marijuana Policy says Hi-Lo Dispensary LLC won’t open for a few weeks.
Wellness Connection of Maine
Wellness Connection of Maine, the state’s largest provider of medical marijuana, is adjusting its business model to instead sell solely recreational cannabis. Charlie Langston, Managing Director of Wellness Connection of Maine, says the company will start selling adult-use marijuana in November.
“The medical market in Maine is fairly wide-open, with very little regulations. There’s no testing required, for example, with the medical market in Maine. We do test – we thought that was a mistake, so we adopted the Massachusetts standards, and that’s what we test all our products to. But the medical market in Maine is still a little bit of a wild west, and we think the adult-use market is prime to be a lot more business-like.”
WCM was established in 2011 and is responsible for four of the eight registered medical cannabis dispensaries in Maine. So what does that mean for their patient list of over 10,000 people?
“We hope they will remain loyal with us. I will say, it’s going to be difficult in the first few months, because of the way the licensing works in Maine. It’s likely that we’ll have our cultivation and extraction license before our kitchen is licensed. What our ultimate goal is, is to have all the same products that we have in medical be available in adult use,” said Langston.
The state of Maine has an extremely heavy tourist population. Maine residents number around 1.3 million, but each year, about 38 million people visit the state. Langston says that because tourists would only shop recreational marijuana, the market size was a factor in Wellness Connection’s decision.
Sweet Dirt, a dispensary in Maine that up until now has been entirely centered on medical marijuana and caregiving, is also beginning to venture into recreational cannabis. However, unlike Wellness Connection, Sweet Dirt is going to adjust its business model to include both recreational and medical sales.
Jim Henry, the CEO of Sweet Dirt, seems to have an extreme sense of hometown pride, which he says he hopes to exemplify with his company. He explained, Maine is known for quality products and those brand names are tied to the state itself; he hopes to create that same tie with quality cannabis.
“We want to make sure that we’re giving back to the entire state that we love so much. That’s really part of our ethos, is making sure that we’re not only continuing to be a company born of Maine, but a company that gives back to Maine as well.”
Rebecca Henry, the Vice President of Marketing for Sweet Dirt, added that the company’s marijuana flower is completely organic and certified by the Maine Organic Farmers and Gardeners Association, which she says is similar to the USDA. There are only 15 facilities certified by MOFGA as selling “clean cannabis.”
“We want to be the recognized source for clean cannabis across medical and adult use.”
Operating in both recreational and medical cannabis markets means the company will need separate licenses and separate facilities for each product. Henry says Sweet Dirt has 8 conditional licenses through the vertical integration chain. That includes licenses for a large cultivation facilities and three adult-use dispensaries; it’s also looking for a location for a fourth storefront.
“There is an infrastructure challenge that is incumbent with the program. It has certainly not been the easiest of roads to travel.”
Henry told Wikileaf Sweet Dirt that on top of working on its new recreational market, which should begin sales in November, Sweet Dirt is also opening a new medical dispensary within the next few weeks.
“We have a very, very strong relationship with our customer base. It’s very much a customer base that appreciates us. They’re local to us.”
Limited Supply and Late Licensing
Right now, the recreational supply is extremely limited.
Cultivation licenses were issued on September 8th, only a month before recreational marijuana was supposed to hit the shelves.
“If anybody knows anything about the life cycle of the plant, you can’t in one month’s time put a seed in the ground and have product to sell a month later,” explained Henry. “It’s going to take at least, I would think, four months, at the very least, to grow, to harvest, to dry, to cure, to package, to transfer, and to tax.”
Retailers are using medical plants to fill gaps in the recreational supply, which means the product is taxed twice. Langston explained the supply issue combined with the taxing mechanism is driving prices up for the time being.
“For the adult-use launch, there’s a number of storefronts but not very many active cultivation licenses that were really growing. The way that that market can be filled outside of an adult-use cultivator growing plants is a one-time transfer. A medical cultivator can sell flower to an adult-use license holder. Bringing that medical into the adult use market requires an excise tax. And then when it’s transferred from that cultivator to the retail, the regular adult-use excise tax is paid. So those initial transfers are double-taxed.”
There are also over 100 growers who are waiting on the state to issue a final review. The OMP wrote in a Facebook post that it’s recently issued 49 conditional licenses, dividing across 20 marijuana stores, 20 cultivation facilities, and 9 product manufacturing facilities.
Langston hopes that issue will diminish as time goes on, and adult-use cultivators grow their own supply.
Consumption Laws in Maine
Individual jurisdictions within Maine are “dry” areas, as you see across the country with alcohol. In Maine, each individual jurisdiction had to choose if it wanted to “opt in” and allow recreational marijuana; if the municipality didn’t go out of its way to opt in, it would automatically be opted out and remain “dry.”
It’s still illegal to smoke in public places throughout the entire state. Violation of the state’s marijuana laws count as civil infractions and can result in a fine of up to $100. Medical marijuana has been decriminalized and available in Maine since 1999.
Where other business owners might view other companies in the same field as competitors, Henry views them as brethren. He’s hoping Sweet Dirt will be able to develop enough product to help supply other stores.