Dogged by delays, Maine’s recreational cannabis market is facing a new setback: the state has pulled out of a consulting deal to write market regulations.

On Wednesday, the state Department of Administrative and Financial Services withdrew from a conditional consulting deal with BOTEC Analysis Inc. of Los Angeles. This came after one of the losing bidders, Freedman & Koski of Colorado, appealed the $200,000 award, claiming that a state review panel failed to give it the local preference points it deserved for teaming up with a Portland-based law firm.

The state’s withdrawal, and its plan to go out to bid again, is raising concerns that the rollout of Maine’s recreational cannabis industry will be delayed beyond its expected 2019 launch. But Gov. Janet Mills believes the changes will actually speed up the rollout.

“The administration’s action to rescind the (request for proposals) will allow the scope, terms and conditions to be tightened, moving the process forward in a more timely manner,” Mills spokesman Scott Ogden said.

“The contract award decision by the previous administration would not have withstood the appeal process,” Ogden said in a written statement. “Issuing a new RFP now, rather than after a completed appeal process, helps avoid additional, unnecessary delays.”

Freedman & Koski claims that it would have won the bid if it had gotten proper credit for partnering with Verrill Dana, one of the largest law firms in Maine. But the state review panel deemed Verrill Dana a subcontractor rather than a co-bidder, and opted not to give Freedman & Koski any of the 10 local economic impact points available in that category. Without them, Freedman & Koski lost the bid, scoring a 64.1 out of 100 compared with BOTEC’s 70.

“We sincerely believe the state benefits when national expertise is combined with local knowledge, and that the state erred in failing to award the points,” Andrew Freedman, a company co-founder and Colorado’s former marijuana czar, said Thursday night.

Freedman noted that his firm had asked the state to consider rescoring the bids, not to start over again. But he said he could understand the state’s decision, given the potentially lasting impact of the rulemaking process.

Following this week’s withdrawal, DAFS hopes to publish a revised request for proposals very quickly, Deputy Commissioner Dick Thompson said. The second consulting solicitation will have tight response deadlines and require the work to be done in a matter of weeks, not months.

A BOTEC executive said the company was disappointed the contract was canceled, but that the company would probably submit a new proposal in response to the state’s revised request and do its best to complete the work so the Legislature can act on the regulations before it breaks for the summer.

“We are concerned that this will likely reduce the amount of time available with which to advise the DAFS, and risks the state’s legislative guideline,” managing director Sam Hampsher said. “Neither of these are in the interests of the Maine residents eagerly awaiting (the) rules.”

But advocates fear this battle between two marijuana consulting titans – BOTEC helped Washington state launch its adult-use cannabis market, while Freedman & Koski’s principals served as the top regulators in Colorado’s adult-use marijuana market – will result in more delays in Maine’s circuitous route to legal recreational marijuana sales. Voters approved legalization at referendum in 2016, but legislative rewrites and gubernatorial resistance stalled all but home grows.

‘THE LAST THING WE NEED’

David Boyer, director of the Maine chapter of the Marijuana Policy Project, said he hoped that the DAFS decision might somehow speed up the process. He said Mills had vowed to “test, track and tax marijuana” while on the campaign trail rather than delay it as her predecessor, Paul LePage, had done. He said every other state that legalized marijuana in 2016 now has retail stores open.

“This is a product safer than alcohol and it’s time that adults had legal access to it,” Boyer said.

The state consultant was supposed to draft its proposed adult-use rules and regulations by the end of April so DAFS could get the legislative approvals needed to launch the commercial market in 2019. The regulations that detail some of the most important parts of a new retail market, such as licensing standards, penalties for unauthorized conduct and a seed-to-sale tracking system, require the approval of lawmakers.

Thompson did not respond to questions about whether DAFS’ new timeline includes a legislative vote on proposed rules and regulations before the session ends.

“Another delay is the last thing we need,” said Heather Sullivan of Hollis, who was active on the state legalization campaign and now works in the industry. “There is no way we are going to start the consultant process all over again and get those rules written in time to get a vote in both houses before they break for summer. Maine was one of the first in New England to legalize and we’ll be one of the last to get it done. That’s so sad for Maine.”

Sullivan said Maine is losing tax revenue and jobs to Massachusetts, which legalized at the same time as Maine but already has launched its recreational market. Massachusetts brought in nearly $24 million in legal recreational marijuana sales in the two months following market launch. To the north, Canada legalized both adult-use and medical marijuana on a national level. In November, the first full month of legalization, dispensaries sold more than $41 million worth of cannabis.

‘I’D RATHER BE DOING THIS HERE’

And it’s not just tax revenue that Maine is losing out on, Sullivan said. Her own career path serves as proof that people who have been waiting for Maine to launch its recreational market can only wait for so long. She left a job in the corporate world to work for a Maine medical marijuana dispensary, with plans to jump into the recreational field, but implementation delays have resulted in her taking a cannabis job in Massachusetts.

“Don’t feel sorry for me,” Sullivan said. “It’s a wonderful opportunity with a big company. But I’m a Maine girl. I’d rather be doing this here.”

She doesn’t dispute the validity of Freedman & Koski’s claim, but regrets the procedural delay and worries it could open the door to other lawsuits that would only further postpone the start of retail sales. Companies involved in the first-round bid could claim that new consultants had an edge after reading their game plans. Some newcomers might resent the shortened response deadlines that favor those involved in the first round of bids.

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

[email protected]

Twitter: PLOvertonPPH


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