Marijuana buds and other products are in the display case in the now-closed Cannabis Healing Center on Dec. 13, 2018, in Hallowell. Kennebec Journal file photo by Joe Phelan

HALLOWELL — About a year after an existing medical marijuana retail shop was forced to close because Hallowell officials decided to issue only two local licenses, the city is considering increasing that number to three.

Draft changes to Hallowell’s marijuana business ordinances came to the Hallowell City Council from the Ordinance Rewrite Committee for the first of three readings Monday. The council passed two motions, one unanimously and one 5-1, with Councilor George Lapointe dissenting and Councilor Kate Dufour being absent. Ordinances become official after the third reading.

The biggest change increases the number of licenses available for marijuana retails stores in the city’s downtown to three. Last year, when the ordinance was being discussed before being put into law, it was recommended to keep the limit at three, but a change approved before the second reading decreased it to two.

And that change created turbulence last year. Three businesses applied for two licenses for downtown retail store licenses, leading to a Dec. 10, 2018, lottery. The results of the lottery gave Derek Wilson, who operated the Cannabis Healing Center at the time, and Allison Michaud, who operates the Frost Factory at 144 Water St., priority and left Catherine Lewis on the periphery.

Derek Wilson speaks Jan. 14 during a Hallowell City Council meeting about receiving a license from the city for his business, the Cannabis Healing Center. Kennebec Journal file photo by Andy Molloy

After a criminal background check on all three, city councilors asked why Wilson and Michaud had not included all criminal convictions on their applications. At a Jan. 7 City Council meeting, Michaud explained her six convictions. Wilson was not present to address councilors about his one conviction. As a result, councilors denied Wilson a license and approved Michaud, citing her “good moral character” for showing up and saying they could not judge Wilson’s character because he was not at the meeting. Minutes later, the council awarded a license to Lewis, who now operates HomeGrown of Hallowell at 109 Water St.

An executive session Jan. 11 led to a public hearing scheduled for Jan. 14 so councilors could speak with Wilson. At that meeting, councilors did not reverse their decision and the Cannabis Healing Center subsequently closed.

Wilson told the Kennebec Journal on Wednesday that the lottery and ensuing process was “a mess.” He said he has since sold all of his equipment and has not worked since the store closed.

“I don’t want to dwell on it, what happened, happened,” Wilson said.

At Monday’s meeting, Councilor Maureen Aucoin, who is on the Ordinance Rewrite Committee, said the decision to bump up the limit was made after discussing the process of converting licenses given for medical marijuana retail stores could be transitioned to adult-use marijuana retail stores.

The city’s ordinance language does not discern between the two, but requires the applicant to have a state license for selling marijuana. Currently, only medical marijuana caregiver licenses are available from the state, which prohibits applicants from applying for an adult-use license in Hallowell.

Aucoin said the city’s attorney delivered an opinion that said those licenses could not simply be switched as soon as adult-use licenses come from the state, but the city could allow that through changes to their ordinances. She also said the two existing businesses may have an unfair advantage in that scenario because they already possess the licenses and no other businesses can come downtown. Councilor Diano Circo argued that the businesses could always go to another allow district where there are no limits on that type of business.

Dufour, who is the chairwoman of the Ordinance Rewrite Committee, said Wednesday that the Ordinance Rewrite Committee voted 3-2 to recommend the language given at Monday’s city council meeting, but was split 3-3 on the language at a meeting Tuesday when another member was present. Dufour said the intent of the ordinance is to allow Michaud and Lewis to transition to adult-use marijuana if they wish without discouraging other interested parties from seeking a license downtown.

“We want to level the playing field but we don’t want to damage the two entities that have invested in our downtown,” she said.

Dufour said opponents to opening a new license on the Ordinance Rewrite Committee did not see an appetite for another business downtown because it would add another business to an already-saturated market with the two downtown businesses and Cold Brook Cannabis, which is outside of the downtown district but located on Water Street as well.

Councilor Patrick Wynne said he supported increasing the limit in the downtown district because it would discourage potential development in the rural districts of the city, where he said it could “change the … district.”

“That encourages the marijuana development to happen in a place that’s probably more appropriate for business,” he said. “Honestly, I’d be happy to vote for four business downtown.”

Councilor George Lapointe said he was uncomfortable with the changes because the ordinance was only enacted last year and he did not know what the state’s transition into adult-use marijuana would look like.

“We’re changing before we know what the playing field is like,” he said.

The draft ordinance also strikes all mention of the word “cannabis” in favor of the word “marijuana.” Aucoin said this minor change brings the city’s ordinance in line with language used by the state.

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