Lawmakers this week approved a bill that they hope will encourage more towns and cities to allow retail marijuana sales and help them recoup the costs of overseeing the adult-use program.

L.D. 1195, which was passed by the Maine House on Thursday and the Senate on Friday, calls for the state to reimburse municipalities up to $20,000 for costs associated with opting in to the state’s adult-use marijuana market.

Only about 10 percent of Maine municipalities allow adult-use sales.

According to Sen. Benjamin Chipman, D-Cumberland, many communities are not participating because of the cost of rule development, issuing licenses, inspection, enforcement and more.

The products are subject to a 10 percent excise tax, all of which goes into the state’s General Fund and none directly back to the municipalities where the products are sold. 

Because of that, Chipman told the Senate on Friday, the state still has a viable black market. Allowing a reimbursement of up to $20,000 should help persuade towns and cities that have held off because of the cost, he said.

Advertisement

According to the Maine Municipal Association, Maine is the only state that has legalized adult-use marijuana without allowing municipal governments to recover any expenses from their regulation of the industry.

The original bill, proposed by Sen. Tiffany Roberts, D-South Berwick, would have given 5 percent of gross sales and excise tax revenue to the municipalities.

“In the development of Maine’s adult-use marijuana industry, the state has asked municipalities to help balance the newly sanctioned use of this commodity, however, municipalities are not yet seeing a return on their investment,” Roberts told the committee on taxation when introducing the bill. 

Kate Dufour, legislative advocate for the municipal association, said that while the group would have preferred to have revenue-sharing approved, she’s glad to see the bill acknowledge that the state should take a role in assisting towns as they implement the state program.

“It’s essentially putting your money where your mouth is,” she said.

The state has 85 recreational retail stores spread across about 50 municipalities. Another 180 stores are in various stages of the approval process, according to state data. 

Advertisement

In 2021, the adult-use market brought in just shy of $82 million, earning over $8 million in tax revenue for the state. 

John Burke, a Scarborough attorney specializing in cannabis licensing, told the committee that the cost of opting in has caused many towns and cities to institute significant licensing fees to offset costs.

Portland, for example, has a $10,000 licensing fee, he said. In Lebanon, it’s $50,000.

“Not having revenue sharing is preventing the state from receiving the type of revenue it anticipated from the adult use program, hurting the businesses lawfully operating in the adult use program and frustrating municipalities that were supposed to be partners with the State in administering (it),” he wrote. “Those municipalities not opting in continue to obtain a financial benefit (directly or indirectly) from these businesses, as much of the revenue generated by the Adult Use program goes into the General Fund.”

Despite the rollout of the state’s adult-use market in October 2020, Portland officials didn’t approve retailers until March 2021. The implementation of business licensing and regulation has been time-consuming and costly for the city, said Jessica Hanscome, director of the city’s department of permitting and inspections, in written testimony to the committee.

She said the department had to hire three new staff members to help manage the workload brought on by the city’s rollout of the market.


Only subscribers are eligible to post comments. Please subscribe or login to participate in the conversation. Here’s why.

Use the form below to reset your password. When you've submitted your account email, we will send an email with a reset code.