As we emerge from the disorienting period of reacting to a global pandemic, widespread business shutdowns, layoffs, and general uncertainty, we wonder if certainty was ever real to begin with. We watched storefronts close, and witnessed huge supply chain shocks. Even though grocery stores and pharmacies were considered essential businesses, we all saw the wide, empty shelves where toilet paper rolls once piled high. Even during a health crisis of pandemic proportions, we saw massive layoffs of healthcare workers.
The pandemic, and ensuing response from the state and federal governments, threw us all off-kilter. For years, we have been waiting patiently (and sometimes impatiently) for the first fully-legal sales of cannabis to adults in Maine. We’ve seen hurdles and delays before, but this was another level altogether.
But now, almost four years after Maine voters approved a path to legal, regulated cannabis for adults over 21 at the ballot box, the vision finally became a reality on Friday, October 9.
The Maine Office of Marijuana Policy (OMP) issued the first round of active licenses to adult-use cannabis businesses in early September. As of this writing, 17 active licenses have been awarded, of which six are storefronts. Over 100 conditional licensees are still in the process, either to be approved by their local jurisdiction or by the state.
Active licenses are the third step in the do-si-do of establishing a legal adult-use shop. The reason for the delay between awarding active licenses and the first day of sales is part of OMP’s strategy to ensure that enough supply will exist in the adult-use market to handle early demand. Given what we’ve seen from other adult-use cannabis markets—in Massachusetts, for example, the lines on day one ran around the block—experience shows that people will wait for hours to legally buy cannabis. Experience has also shown that people will travel for hours to get to those long lines.
The all-important question remains: Will the number of licensed stores be able to handle the volume of Maine’s adult-use market? Will the retail storefront license holders be able to stock their inventory, since adult-use cannabis and medical cannabis must be separated throughout the growing process?
Within Maine’s medical cannabis market, it is commonly understood that there is not enough supply to meet current demand. The simultaneous rush of the essential business designation, plus the drag of a pandemic-weary labor force and a contracting economy, have pushed many Maine cannabis producers to the limits of their operations. For those who are planning to flip to the recreational, or adult use side, there will likely be no respite from that stress and demand.
It stands to reason that the first weeks of Maine’s adult-use market will demand high quantities of both the sticky and the icky. Consumers will likely be coming over the border from New Hampshire and even travelling across the Northeast from legal states like Massachusetts where prices at adult-use stores average $12-14 per gram, approaching what I would call prohibition prices.
One proposal that could have helped smooth the transition to adult-use sales for Maine’s cannabis cultivators and connoisseurs was LD 1432. This bill was voted down in the Veterans and Legal Affairs committee in late February, before the legislature prematurely adjourned due to the state’s coronavirus response. Under this bill, cultivators with an active, adult-use license could have accepted transfers of cannabis plants or products from a medical facility for which they also hold a license. These transactions would carry the normal excise taxes and fees that the regulators require as well as a detailed manifesto of the goods being transferred. Despite the added costs for transactions, this change in policy could have helped to make sure Maine shelves were stocked in anticipation of first sales.
Current law only allows for a one-time transfer of plants—but not product—from a medical to an adult-use cultivator. In January, the next batch of legislators should take up a bill that allows any medical caregiver or dispensary to sell plants or products to an active adult-use licensee. With state economic forecasters predicting an almost-$1 billion shortfall over the next two-year budget, lawmakers might be eager to turn on the tap of legal cannabis tax dollars sooner rather than later.
During the early pandemic crunch, national sales of cannabis hit record highs. New Frontier Data reported that average consumer monthly spending on cannabis in April and May reached $290 and $296 respectively, while settling down to $282 in June. Second-quarter sales were up nearly one-third compared to the first quarter average of $213. From August 2019 to August 2020, monthly spending on cannabis rose 17.4%.
This phenomenon and sudden shift in our world should further emphasize the need for a full-fledged, thriving cannabis industry in Maine. The people of the Pine Tree State could make use of many now-defunct paper mills scattered across the rivers of the north and west, attracting much-needed investment to rural Maine. American manufacturing has been waiting for this comeback for decades.
Vacationland could add another allure to this unique slice of heaven we call home: explore the endless coast, take in the clean, crisp mountain air, and sample some of the world’s finest indoor and outdoor cannabis. It is truly a match that can only be made in Maine.