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Friday State Spotlight: Maine
We talked on Wednesday about Oklahoma voters rejecting legalization, thanks in part to their thriving medical market. The gold standard of medical markets in the United States is Maine. Let’s explore The Pine Tree State in this week’s State Spotlight.
A key factor in Maine’s thriving medical market is, of course, regulation. Specifically, Maine is unique among US states in the way it treats ‘caregivers’ and allows them to access the market. From a great piece by Dan Adams in the Boston Globe:
At stake in the fight is one of the country’s most unusual legal marijuana markets, which is dominated not by investor-backed dispensary firms but so-called caregivers: small, informal growing and manufacturing operations that were originally intended to provide medical cannabis to just a handful of nearby patients.
While caregivers in Massachusetts and most other states are not permitted to make a profit and typically work with a few seriously ill patients they know personally, many of Maine’s 2,800-plus caregivers have evolved over the course of several statutory changes into pseudo-dispensaries that stand alongside a much smaller number of more traditionally-regulated retailers selling both medical and recreational marijuana.
State law allows caregivers to accept out-of-state medical marijuana cards, and the storefronts they were permitted to open beginning in 2018 quickly became beloved by patients around New England for their grassroots vibe, dirt-cheap prices, and wide variety of craft products. As a result, business has boomed, with marijuana surpassing potatoes and blueberries as Maine’s most valuable crop.
Activists in Maine have thus far been able to fend off regulators who want to strip caregivers of their rights in the marketplace. In November, the Attorney General stated he would not prosecute caregivers for selling pre-rolls, after The Maine Office of Cannabis Policy banned medical marijuana caregivers without a storefront from providing pre-rolled products. Also, from the same Boston Globe article:
Maine marijuana officials and law enforcement leaders have repeatedly pressed to impose tighter rules on the freewheeling sector, saying its lack of testing, tracking, and labeling requirements leave patients vulnerable to contaminated cannabis and make it easy for producers to divert inventory out the back door.
The state’s thousands of tiny, locally owned medical operators and their legislative allies, however, have so far blocked all attempts to act on those concerns, most recently pushing through a law requiring Maine’s Office of Cannabis Policy to run any regulatory changes by the State House.
Now, frustrated regulators at the agency are going back to the drawing board for the third time in two years, announcing this week that they will launch a statewide “listening tour” to gather input before embarking on yet another attempt to write new medical marijuana rules.
“When we tell regulators in other states that we have testing for [recreational] but not medical, you get an odd look,” said Erik Gundersen, Maine’s pot czar. “It’s a weird, gray space to be in. But we understand the fear and trepidation out there about change, and we also want a thriving medical program that allows operators to continue doing what they’re doing.”
That’s certainly an odd policy mismatch — but it’s an undeniable win for the medical industry. Testing and safety are concerns across the board in the cannabis industry, but it’s not clear that imposing stricter requirements would push consumers to a more ‘regulated’ industry rather than the underground. Speaking of…
Unlike Oklahoma, Maine actually does have an adult-use market running alongside the medical market. And it’s going OK! From Hannah LaClaire at The Portland Press Herald:
The state’s licensed adult-use retailers reported nearly 2.5 million sale transactions, totaling $158.9 million, according to data released last week by the Maine Office of Cannabis Policy. The 2021 total was $82 million.
Last year’s sales also earned the state roughly $16 million in tax revenue.
John Hudak, director of the office, said the numbers show the legal cannabis industry can work and thrive in states that regulate the market.
But there’s more to it than just increased revenue, he said.
“(The growth) reflects the significant economic impact that legal cannabis continues to have in the communities that have opted into the system,” he said. “The system is creating jobs, helping revitalize communities, and having a positive economic impact on businesses that help the industry function.”
For more on the economic impact of Maine’s legalized market, the Colby Laboratory for Economic Studies put out a very cool, interactive report breaking down the supply chain, taxes, and economic contributions from the fledgling industry.
But while the numbers sound promising, there is cause for concern. Maine took an incredibly long time to get their recreational market stood up — voters legalized in 2016, and the first sales did not take place until October 2020. Once they were open, dispensaries found themselves with no banking options, according to a report last year from the Sun Journal. And the expert on Maine notes in this chart that sales have fallen far short of projections:
What to watch
The medical and recreational cannabis markets in Maine are must-watch for industry trackers and policymakers. Grassroots activism has thus far managed to stave off heavy-handed regulation, but corporate interests and changing consumer preferences may yet buoy the fledgling adult-use market.
Regardless of your position, I think we can all agree that summer and a joint in Maine just hits different. Have a nice weekend.