Over the last decade, almost every business move medical marijuana caregiver Dave Stephenson made has been in preparation to join Maine’s adult-use cannabis market – from establishing his grow, Hazy Hill Farm, in Portland to establishing a loyal customer base through a cannabis delivery service.
He has spent the last year and a half hunting for a retail space. Reluctant landlords, exorbitant lease costs, federal mortgage prohibitions and local land-use restrictions proved difficult, but he signed on the dotted line in February to claim his spot after Portland adopted its marijuana zoning rules.
But the undisclosed retail location he has been paying for since February will be worthless if he cannot get the retail marijuana license that he needs to open a marijuana business in the city. With the city calling for a maximum of no more than 20 retail stores, that is looking less likely every day.
“The City Council gave us zoning regulations and as entrepreneurs, we went out and we signed leases and purchased real estate with no warning that we might not be able to open our businesses under these local guidelines,” Stephenson told members of two City Council committees that met on Tuesday.
“Local business owners, myself included, have invested large amounts of money and time into their retail space, and it could all be for nothing if we don’t make the cut,” the longtime Portland resident said. “So I must ask, why limit it to 20 stores? Why limit it at all?”
Stephenson was one of two dozen people who weighed in on the city’s proposed marijuana regulations at a joint meeting of the council’s economic development and health and human services committees on Tuesday. Concerns ranged from the kind of safe businesses must use to whether seating should be allowed.
But the biggest concerns raised by one speaker after the other was the city’s proposed limit on the number of retail stores allowed and the points system it would use to score retail license applications with the highest-scoring applicants being first in line to claim a retail permit.
The city initially proposed a 20-license cap in August, but under the first set of rules, it would have given out the licenses based on a first-come, first-served basis. In October, city staff proposed a change over to weighted scoring, awarding bonus points to encourage diverse, local and successful applicants.
Under the proposed system, the city would award points to women, minorities, veterans and immigrants who have come to Portland over the last decade, those who have lived in Maine for at least five years, and those willing to share 1 percent of their profits with the city, among other conditions.
Speakers complained that the scoring system favors big businesses, awarding a bonus point to those who are able to prove they have at least $150,000 in liquid assets, for example, while giving little consideration to the medical marijuana caregivers who paved the way for the adult-use market.
The proposed scoring system would award a medical marijuana retail store with an established record of compliance in a heavily regulated industry the same consideration as a local barber who had been cutting hair for five years, said Tom Mourmouras, who runs the Fire on Fore medical retail shop in Old Port.
Since opening this summer, Fire on Fore has conducted 28,000 medical cannabis sales, all compliant and tracked, contributed $100,000 in sales tax to Maine state coffers and paid 20 employees a living wage, he said. That ought to be more highly valued by the city than a barber or electrician, he said.
He also accused the city of changing its stance on grandfathering already permitted medical shops. In the fall, when the City Council adopted a moratorium on new shops while crafting its rules, Mourmouras was told Fire on Fore was safe, but now he is being told he will have to compete for one of 20 retail licenses.
“Since then, my business partner and I have invested our life savings into the business,” Mourmouras said. “The city’s current stance on grandfathering would exclude us. Why is my business punished for operating a successful store? I’m up here tonight fighting for my business, my employees and my 50 vendors.”
Andrew Pettingill, a co-owner of Evergreen Cannabis Co., complained about giving a bonus to an applicant who can prove that he has $150,000 in liquid assets, an amount that city staff said a business in this industry will need to have just to get through its first year of operations.
He said anyone in this business could meet that threshold if they were willing to sell part of the equity in their business to outside investors, but it’s not fair to demand that of small operators like Evergreen that already have spent twice that to set up the business, build a brand and fit out a quality grow.
But mostly, the Munjoy Hill businessman said he is impatient for Portland to finally adopt its regulations.
“I’ve been paying $40 a square foot on my retail space since (February) without being able to operate,” Pettingill said. “I’m patiently waiting for the council and the committee to move forward. … I’d just like to express my concerns about the time it is taking.”
Former state Rep. Diane Russell, who helped organize the 2016 state referendum that legalized adult-use cannabis, urged the city to abandon its proposed cap and to consider awarding even more points to those people of color who have been most harmed by the country’s failed drug policies.
“It is not government’s job to make a business successful,” said Russell, who now serves on the board of NORML, the National Organization for the Reform of Marijuana Laws. “It’s the job of the market and the competition. We should let the people and the competition rise up to decide.”
Chris McCabe, a city resident and attorney who practices cannabis law, warned the committees that a city that tips the scale toward one kind of applicant over another is essentially “picking winners and losers,” and opens itself up to costly lawsuits over arbitrary, capricious or wrong-headed regulations.
The city took no action on the proposal Tuesday. The two council committees will meet again to consider particularly controversial aspects of the proposal, especially the retail license cap and the scoring system, but did not set a date for the next meeting.