GARDINER — Alex McMahan and his partners made it a point to complete and submit their license application last week for an adult-use marijuana business in Gardiner.

Their company, The Healing Community MEDCo, operates two medical marijuana stores in Lewiston.

As the launch date for the state’s adult-use cannabis market draws closer, they are working to expand their business beyond Lewiston and beyond the medical marijuana and related products they currently sell. The company has plans to open a third location at 189 Water St. in Gardiner.

While city officials have established regulations on marijuana-related businesses ahead of the launch of Maine’s adult-use marijuana market, expected later this year, neither they nor anybody in the industry know exactly how that market will shake out.

The Healing Community MEDCo is one of three retailers that has filed an application for a marijuana establishment business license for a store in and around Gardiner’s downtown. The city also has six medical marijuana grow operations and a medical retail store.

Two medical marijuana retail shops on Water Street have either closed or moved out of the city.

At Wednesday’s City Council meeting, city officials approved a business license for Herbal Pathways at 35 Bridge St. The Planning Board is expected to take up two more applications at its meeting this week, and eventually the application for McMahan’s company.

The demand for marijuana retail space that is developing in Gardiner has caught residents, business owners and city officials by surprise. Now, the Gardiner City Council is considering whether it, in addition to the regulations and fees already put in place, wants to impose an additional limit on the number of retail spaces the city will allow in its downtown neighborhood.

“You don’t often see this kind of stuff happening in real time,” said David Findlay, a professor of economics at Colby College in Waterville.

With the 2016 statewide vote to legalize marijuana, it was clear a majority of Maine voters wanted it, Findlay said, but the actual demand for legal cannabis products remains to be seen, and it is demand that will shape the market.

“Legal use of marijuana doesn’t exist right now,” Findlay said. “The interesting question for potential entrants into the market is they don’t know what demand is going to be. You’re going to have individuals wanting to open up establishments because they view this as a worthwhile activity, as an opportunity to make profits like any other firm in any other industry would.”

One of the limiting factors is the number of cities and towns that will allow it. In Maine, municipalities must opt in to allowing cannabis-related businesses. While Gardiner and other communities — including Richmond, Hallowell and Manchester — have, others — notably, Augusta — have not. And others, such as Chelsea, are expected to put the question to voters in an upcoming election.

Another limiting factor in Gardiner is the regulations already in place. In the city’s downtown neighborhood, marijuana retail shops can be no closer to one another than 200 feet.

A third factor is public opinion. Community groups, such as the Gardiner Area Thrives Coalition, are pressing for more restrictions because they want to limit children’s exposure to marijuana.

Enough concern had been registered by Gardiner residents and organizations to put the matter back before the City Council last week.

In bringing the topic to the Gardiner City Council, Mayor Patricia Hart recapped the steps city officials took after Maine voters narrowly approved legalizing marijuana in a statewide 2016 referendum vote: Appointing a task force to make recommendations on whether and how to allow marijuana businesses in the city, setting up the regulatory framework in the city’s Land Use Ordinance and setting a schedule of fees for licenses.

“One thing we didn’t anticipate was a pandemic,” Hart said. “And we certainly didn’t anticipate us having as many open store fronts (on Water Street) all at once that we have had this spring.”

“We would specifically like to ask the council to consider limiting retail density in Gardiner,” Patricial Buck-Welton, a substance use prevention coordinator for youth at Healthy Communities of the Capital Area, said at that meeting.

Buck-Welton is a member of the Gardiner Area Thrives coalition, made up of people from across the four communities in the Gardiner-area school district. Several of them spoke of their concerns, including accessibility of marijuana to students in the district.

“Right now, we have 640 students in Gardiner Area High School, and 25% have self-reported they are using marijuana,” she said. “That’s 192 students. One of the ways to get youth so they have limited access is to limit the retail availability here in Gardiner.”

District 1 City Councilor Terry Berry said marijuana now is like alcohol when he was growing up: Those who wanted it knew where to get it.

“If we’re going to limit one legal enterprise, should we go back and limit another legal enterprise?” Berry said. “I’m a free-enterprise person. If you are going to start limiting business, I can’t tell you how many comments I’ve heard over the last 12 to 18 months: ‘We have too many hair salons on Water Street. Are we going to limit the number of hair salons?’ You have to allow the market to work itself out.”

At the meeting, McMahan said if a limit were to be imposed, companies that have submitted license applications should be allowed to continue.

“We had our eyes on Gardiner,” McMahan said last week. “Gardiner stood out initially because if its proximity to Augusta. We’re up in Augusta a lot of times doing work in the State House. Out of all the towns that are surrounding Augusta, we always felt that Gardiner has a lot of culture and personality to it.”

But, he said, he did not think Gardiner would become a marijuana destination because of the limit on the number of retail shops in downtown.

“While there may not seem to be a lot of cannabis in Gardiner, there has been for a long time. It’s just been in the hands of the black market,” he said. “We’re pretty far into the process of legalization, and part of that is coming out of the shadows and into the light.”

McMahan said the clear or legal market, with its controls and regulations, has the best chance to limit access to marijuana. And in states where an adult market exists, he said, there has not been an increase in use by minors.

He said communities that have opted in are fielding many telephone calls these days cannabis businesses.

“The market is excited right now,” he said. “We’ll see a lot of places opening up, and in the next couple of years, we’ll see that level out to a reasonable amount of businesses in each municipality.”

In Lewiston, which has several medical marijuana stores now, residents are choosing to buy from shops rather than on the black market, according to McMahan.

“That is a huge win,” he said. “We’re checking IDs. We have to check IDs. We want to. We’re responsible business owners who are highly regulated. We’re selling a regulated product to the people the state says we’re allowed to sell it it.”

The City Council agreed to refer the matter to the city’s Ordinance Review Committee, which will take a look at what other communities are doing — among other things — before sending a recommendation back to the City Council.

 

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