A Washington State cannabis business has sunk a half-million dollars into building a new testing and processing lab in Portland.

On the outside, the Caddie Lane property looks like any other manufacturing startup, a no-frills, neat-as-a-pin building tucked away in a no-name industrial park off of a major city thoroughfare. Despite the grow operation inside, there is not a whiff of marijuana in the air. The only tipoff to what is going on inside is a sign on the door that bans cannabis smoking outside the building.

But the owners of the business, which goes under the name Xtracted New England, say they are on the verge of opening a top-notch, engineer-certified, explosion-proof operation at the location that will create 20 new jobs, the least of which will pay $15 an hour and the best of which will come with a six-figure salary. They’re just waiting on the final city permit.

“We aren’t here to cut corners,” one of Xtracted New England’s co-owners told the City Council during its meeting Monday night. “We are here to provide a high-quality product to the patients of Maine. We are providing a safe, secure and profitable atmosphere for employees, neighbors and the city of Portland. We’d love to continue to set the precedent for what extraction labs should be like.”

The man only gave his first name, Sean, while addressing the council, and city officials were not able to provide his full name Tuesday.

Xtracted’s plans could go up in smoke – or at least take a serious hit – if the City Council votes to enact a six-month moratorium on new medical marijuana cultivation facilities, retail stores, testing labs and extraction labs. The council is considering whether to apply it retroactively to all proposals submitted since state lawmakers passed a new medical marijuana law in June.

Xtracted was one of a half-dozen cannabis businesses that spoke out against the moratorium Monday, saying it was unfair to those who already had spent a lot of money on lawyers, architects, engineers, consultants and properties to develop proposals based on the city’s existing land-use and building codes, which do not single out marijuana for special review.

The council could have voted on the proposal Monday, but unanimously agreed to delay its decision until at least Oct. 1 after a few councilors complained they did not have enough time to review documents sent to them Monday afternoon about the proposed medical marijuana projects that would be affected by the moratorium, as well as ones already approved by the city.

The proposal was first aired at a council workshop this month. Since then, city officials have expanded the proposal to include a moratorium on medical marijuana cultivation facilities, including those caregivers who might join together in a single building to cut their expenses while growing their individually allotted 30 plants each.

Caregivers who grow for five patients out of their own homes would not be affected, even under the newly expanded proposal.

The city is seeking a moratorium on new medical marijuana businesses to give itself time to develop a comprehensive plan on how it is going to regulate both medical and recreational marijuana businesses within its limits, especially where each kind of cannabis business can open. New legislation gives towns and cities regulatory control over most kinds of commercial cannabis activity.

Portland officials who have been considering local cannabis regulations – three even traveled to Colorado last year to talk to regulators in the first state to legalize recreational marijuana – say that deciding which zones are best suited for marijuana businesses will be their first step toward regulating this emerging industry. A draft zoning proposal will be presented to the council next week.

Officials have said their top priority will be to keep marijuana businesses out of residential neighborhoods. Most of the business people who came out to oppose the moratorium Monday night voiced support for that goal in their public testimony, but said they didn’t think it required a retroactive ban on all new businesses to accomplish it.

The adoption of new state legislation, including laws that create a state license for marijuana extraction labs and give medical cannabis caregivers the explicit authority to open retail shops, did not prompt business owners to swamp the city with new applications, they say. City officials say a retroactive moratorium would affect four applications – one retail store and three extraction labs.

“Finding a property … is like finding a needle in the haystack,” said Thomas Mourmouras, a Portland caregiver who runs an accounting and business consulting firm that specializes in cannabis clients. “This does not happen overnight and it certainly was not a haphazard, inexpensive application thrown in to beat any moratorium deadlines.”

Mourmouras and his partners submitted an application to open a retail medical marijuana store on Fore Street three weeks ago. In his testimony, Mourmouras outlined the time and money spent on architects, lawyers and security consultants, as well as the effort that went into wooing landlords who own retail space in the same zone.

“We feel the retroactive date would place an extreme hardship on businesses that did this the right way, while rewarding the ones that will continue to operate in zones that are unsuitable for their use,” Mourmouras said. “As a lifelong Mainer and Cheverus (High School) alumni, it has always been a dream to run a business in the Old Port. … Allow us to do this the right way.”

Portland currently doesn’t have any marijuana-specific regulations, officials say. It doesn’t license any retailers, whether they sell cake, carburetors or cannabis. Zoning rules don’t single out marijuana grows, retailers or extraction labs, or define them as a kind of use that belongs in one part of the city instead of another – at least not yet.

Portland doesn’t even know how many medical marijuana businesses it is hosting. Caregivers don’t have to register with the city, and it is only recently that the state has been willing to share caregiver records with municipalities. The only ones Portland knows about are a handful that have sought a city permit of some kind or those that have upset their neighbors.

Portland has issued almost two dozen building, electrical or plumbing permits for almost $500,000 worth of work to caregiver cultivation, retail and processing facilities since 2014, city records show. These are just the ones that have needed permits – officials know many of these businesses have been flying under the city’s radar, because there have been no official local permits required.

Unofficial cannabis hubs are cropping up along the Riverside Street and Forest and Warren Avenue corridors, with entrepreneurs converting offices, warehouses and auto body shops into marijuana grow and manufacturing operations. One Warren Avenue gas station owner leased out his walk-in cooler to a caregiver who is converting it into a medical marijuana retail shop.

Penelope Overton can be contacted at 791-6463 or at:

[email protected]

Twitter: PLOvertonPPH

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