The Truth About Retail Marijuana in Maine:
Camden Will Get NO Tax Revenue From Pot Shops.
90% of Maine Towns Don't Have Pot Shops. Why Would We?
Tax revenue: Maine will share its pot with local governments (up to $20K max for reimbursements only)
By Christian Wade / The Center Square contributor
Apr 27, 2022
(The Center Square) – Maine Democratic Gov. Janet Mills has signed a bill to divert tax revenue from cannabis sales to cities and towns to help them cover the impact on municipal services.
The measure, which was recently approved by the state Legislature, will allow local governments that host cannabis growing facilities and retail shops to request reimbursement for municipal expenses up to $20,000 a year.
Under the new law, local governments must document "qualifying expenses" for hosting cannabis operations, such as legal fees and costs associated with reviewing an application to open a retail operation and holding a town meeting or election.
The new law is a scaled down version of the original bill, which would have required 5% of the state's 15.5% combined taxes on recreational cannabis to go to local governments.
The measure's primary sponsor, Rep. Tiffany Roberts, D-South Berwick, said it would help alleviate "budgeting uncertainty" for local governments that host retail cannabis operations.
"This bill will allow municipal governments to recover expenses from the regulation of the adult use industry and encourage partnerships with local businesses," she said in recent testimony.
Maine approved recreational cannabis in 2016, allowing adults age 21 and older to possess up to 2.5 ounces of pot and it authorizes regulated cultivation and sales.
The products are subject to a 10% excise tax and the state's 5.5% sales tax. In 2021, profits from recreational pot sales in Maine topped more than $81 million, according to state data.
But local governments don't see any of that money – even if they host a cannabis business – and are forbidden from charging local pot excise fees on the businesses.
To be sure, local taxes and so-called "host fees" for cannabis businesses have proven to be controversial in other states that have legalized medical and recreational use.
Cannabis industry experts say excessive entry fees stunt the growth of the market by squeezing out smaller companies that can't afford to pay steep start-up costs.
John Burke, an attorney who represents cannabis businesses, said in the absence of revenue sharing agreements with local governments, cities and towns are charging "excessive" licensing fees for allowing pot shops to open in their communities. He said that is stunting the growth of the retail marijuana industry by creating financial barriers to enter the market.
"Not having revenue sharing is preventing the state from receiving the type of revenue it anticipated from the adult use program, hurting the businesses lawfully operating in the adult use program and frustrating municipalities that were supposed to be partners with the state in administering the program," Burke said during a hearing on the bill.
At least 18 states, the District of Columbia, and the U.S. territory of Guam have legalized recreational cannabis, according to the National Conference of State Legislatures.
Maine is also one of 37 states that have authorized medical marijuana sales, but the state doesn’t tax those products.
More Than 90% Of Maine Towns Still Don’t Allow Recreational Marijuana Sales
Maine Public | By David Marino Jr. — Bangor Daily News
Published September 20, 2021
Customers peruse products at Firestorm in Bangor on the first day of legal marijuana sales on Oct. 9, 2020. Firestorm was the first recreational marijuana retailer to open in Bangor. Nearly a year after recreational marijuana sales began in Maine, less than 10 percent of the state's towns and cities allow retail shops.
More than 90 percent of Maine towns and cities still don’t allow recreational marijuana stores, even as sales in the industry have steadily grown since they started nearly a year ago.
While Brewer and Orono are both on track to allow recreational cannabis stores sometime soon, they’ll join only three other Penobscot County communities that allow such shops — Bangor, Medway and tiny Stacyville with just 380 residents. Etna allows growing operations but not retail stores.
Across the state, only 47 of Maine’s approximately 500 towns, cities and plantations have opted in to allow recreational marijuana retailers. Fewer than a third of Maine residents, just 29 percent, live in those communities, though many more live near them, according to data from the Maine Office of Marijuana Policy and the 2020 U.S. Census.
The small number of towns allowing sales presents one hurdle to further growth for the industry, which has only been able to sell recreational weed since last October and posted its highest sales figure yet, $10.2 million, in August. A cannabis industry group acknowledged the slow growth in towns signing onto allow retail shops.
Some of the resistance to allowing marijuana shops comes from many Mainers’ association of marijuana with harder drugs that have ravaged their communities, including opioids and methamphetamine. That association became clear over the summer when Glenburn’s planning board considered a greenhouse that would grow medical marijuana, an operation municipalities cannot deny under state law.
Rather than opt into recreational sales, several communities have passed ordinances banning the development of retail marijuana stores, including Bradford, Corinna, Corinth, Dixmont, Glenburn and Millinocket.
Many of these bans came in the years after Maine voters legalized the drug for recreational purposes, including Carmel’s prohibition that took effect in 2017. That town’s ban came after Penobscot County Sheriff Troy Morton recommended it to the town’s select board in December 2016, saying that there would be “unforeseen circumstances” arising from the legalization of marijuana, according to town minutes.
While the referendum legalizing marijuana narrowly passed across Maine in 2016, it was with no help from Penobscot County: 54 percent of the county’s residents voted no. Only Bangor, Lakeville, Maxfield, Old Town, Orono and Webster Plantation favored the measure.
Also voting no in that referendum was Dover-Foxcroft in neighboring Piscataquis County.
Five years later, the question of bringing recreational shops to town will be put to voters in November, select board member Stephen Grammont said. The question came up as a town committee looked at reworking its zoning and land use ordinances, he said.
“The measure on the ballot is to see if people want the activity at all,” Grammont said.
While the referendum won’t be officially binding, the town’s select board will be “obligated” to follow its conclusions, Grammont said.
Dover-Foxcroft is the largest town in Maine’s most conservative county. Yet, he said, it was unclear how residents felt about marijuana.
“The weird thing about Maine is that it’s conservative but also libertarian,” said Grammont, who noted that a wide range of political movements had flourished in Maine, from the temperance movement to gun rights.
For many communities, it has taken a proposal for a retail store to persuade them to opt in. Medway, which legalized recreational stores by town vote in March 2020, has one recreational marijuana shop and is bound to have another if residents vote to permit medical shops later this month, Town Clerk Katherine Lee said.
More towns could opt in over time if they get similar requests as long as such requests are “economically feasible,” she said.
As Maine’s marijuana industry looks to expand, getting more towns to opt in is essential, said Joel Pepin, president of the Maine Cannabis Industry Association. While he noted that Brewer had recently taken the necessary steps to opt in, movement had been fairly slow across the state, he said.
A fear of the unknown is a significant reason, Pepin said. In addition, he said, some municipalities might not see much in it for them. Excise and sales taxes from retail stores go entirely to the state rather than to the communities where they’re located.
Though he wants to see more towns, cities and plantations sign on, he was optimistic about how the recreational industry had done since sales began in October. He noted that prices, once an issue for the new industry, had come down.
“It takes time for stigma to change, and it takes time for operators to jump in and participate in the market,” Pepin said. “But I mean, the market’s been launched now for a year and it seems to have already made a tremendous amount of progress.”
Stacyville approved its present marijuana policies during town meetings in March and August 2019.
Select board member Alvin Theriault said there was no opposition whatsoever. Residents were attracted to the economic prospects: A large-scale grower had considered doing business in Stacyville, but later decided not to due to state regulations, Theriault said.
“We don’t have any industry here. We don’t have anything,” Theriault said. “So why not?”
One shop has since opened in Stacyville — The Green Moose Smoke Shop — though it only sells products to those enrolled in Maine’s medical marijuana program.
Theriault, who used to encounter marijuana when it was illegal during his decades as a game warden, said people would smoke marijuana whether communities allowed its sale or not.
“It’s out there,” Theriault said. “You might as well collect taxes on it.”
This story appears through a partnership with the Bangor Daily News.