Maine has announced its first round of fully licensed recreational marijuana businesses, including two retail stores – in South Portland and Northport – that can start selling adult-use cannabis to the public next month.
The retailers, Theory Wellness of Maine in South Portland and Sweet Relief Shop in Northport, are cleared to open on Oct. 9, the opening day for adult-use sales in Maine. In addition, the Office of Marijuana Policy approved Nelson Analytics in Kennebunk as Maine’s first testing lab and grows for Room 5 in Detroit, Gele in South Portland and Grass Roots Marijuana in Auburn.
Those are unlikely to be the only businesses licensed by opening day – the state plans to continue licensing adult-use applications on a rolling basis up to and after Oct. 9, including those seeking to manufacture cannabis products, like the infused marijuana edibles popular among modern consumers. No manufacturing licenses were announced Tuesday, but some are likely to be issued in the next month.
All grows and labs licensed Tuesday will be off limits to anyone but state-licensed employees, regulators and vendors. Away from public scrutiny, these license holders will begin to grow and test the marijuana that will stock the shelves of retail stores. But the state warned Tuesday that market launch and product availability may be limited during a pandemic-era market launch.
“Maine will have the unique distinction of being the only state to launch its adult-use marijuana program during a pandemic,” Erik Gundersen, the head of the state’s marijuana policy office, said on Tuesday. “The initial market will likely be limited in both accessibility and product availability, but the industry will evolve responsibly and provide safe, convenient access.”
Theory Wellness of Maine, a business run by two Colby College graduates who are already selling medical and adult-use cannabis in Massachusetts, plans to grow and eventually manufacture cannabis products in a former machine shop in Waterville and sell it out of a former Dress Barn location near The Maine Mall in South Portland, and one day soon, near their alma mater.
“There is a lot of excitement within the company, as we have been working on this project for almost two years now,” Theory spokesman Thomas Winstanley said. “Cannabis can be a ‘hurry-up-and-wait’ situation, so we’re really excited to be moving forward with certainty.”
Both founders, Massachusetts residents Brandon Pollock and Nick Friedman, spent a couple years after graduation consulting in the West Coast cannabis industry, but decided to join forces in 2015 and return to the East Coast after Friedman’s father was unable to access legal cannabis as a form of treatment after breaking his spine in a ski accident.
The former college roommates say they fell in love with the state while at Colby, where they launched their first business together, a water filtration company, and lived in Portland for two years upon graduation. They said they had always hoped they would be able to return to Maine to be a part of its long marijuana tradition.
They will employ at least a dozen people in South Portland at the launch, and hope to hire another 20 people in Waterville. Those jobs will start at $15 to $17 an hour, with managerial positions earning more, and unlike many cannabis companies, the positions will all include health insurance and paid time off.
The other retail license went to Sweet Relief Shop in Northport, owned and operated by John Lorenz. He is one of about two dozen business owners who have been growing and selling medical marijuana out of shops along Maine’s 500-mile stretch of Route 1. Lorenz said he will keep his medical business going even as he expands into adult-use sales, operating them out of two separate buildings on his land.
Lorenz is not a native, but has lived in Maine since he was 8 years old. He decided to get into the marijuana industry in 2014, two years before the legalization referendum, and became a caregiver in 2016. So far, the medical business is made up of just him and his wife, but he hopes he can expand enough to hire employees once his adult-use business is up and running.
“I have wanted to be a farmer since I was a small child,” Lorenz said. “Now, with state licensing, the opportunity has become a reality. … I have been told that this is the only application for a marijuana store that is a sole proprietorship, and that also did not use a corporate lawyer to do all of the paperwork. I did all of it myself.”
It hasn’t been easy, Lorenz said. He left his job as a special education teacher in 2016 to devote himself to the business full time. He and his wife do it all, from farming to sales, with everything in between. They have poured their life savings into the business and have gotten by on less than $20,000 a year since he gave up his teaching gig.
“We are a mom-and-pop shop,” Lorenz said Tuesday after learning Sweet Relief was one of only two retail stops licensed. “With perseverance and dedication to put this marijuana business first, I dream of making a living and being gainfully self-employed. This is a true Cinderella story, and hard work has been my magic stagecoach.”
Though Maine state law requires marijuana stores to be owned by four-year Maine residents, the Office of Marijuana Policy agreed not to enforce the residency requirement after the preferential treatment was challenged in the courts as unconstitutional. Still, the issue of who owns and profits from Maine’s cannabis industry remains a hot-button issue.
The industry has been eagerly awaiting the state’s announcement of first-wave licenses, but most consumers just want to know how far they will have to drive to buy legal recreational marijuana on opening day. Tuesday’s announcement means Mainers who live on the state’s northern border will have to drive about four hours to the nearest legal recreational marijuana store.
Neither Theory Wellness nor Sweet Relief is licensed to grow or manufacture marijuana products at this time, although both have multiple applications pending before the state to do so. If their grow licenses are not approved by opening day, however, state law will allow them to buy wholesale marijuana flower grown or purchased by any fully licensed adult-use growers.
With only one month between the state’s final licensure of the three-adult use grows and the first sales, it is likely that most of the marijuana sold on opening day of adult-use sales will actually come from medical marijuana grows. To stock adult-use shelves at launch, state law allows the one-time sale of medical plants to licensed adult-use growers for harvest and sale to licensed retailers.
Consumers will have to show a government-issued ID to prove they are 21 years old to even enter a shop, much less buy cannabis. Daily purchases are limited to no more than 2 ½ ounces of dry-leaf marijuana, or 5 ounces of concentrate. Edibles can’t exceed 100 total milligrams of THC, the chemical that gets a user high; single edible servings are capped at 10 milligrams each.
State law allows retail shops to operate from 7 a.m. to 10 p.m., but host towns can opt to adopt more restrictive operating limits.
Maine legalized adult-use marijuana via referendum in November 2016, along with California, Massachusetts and Nevada. The other states have long since opened their markets, while Maine will have spent 1,431 days rewriting the citizen referendum law, crafting regulations, dodging political delays and outwaiting a pandemic, assuming the Oct. 9 launch goes as planned.
Of those states that allow adult-use marijuana sales, the average wait between approval and market opening was 435 days.
That has left a lot of money on the table for Maine, both in sales and tax dollars. State officials predict $168 million in adult-use sales in the first full year of the market, which would generate at least $33 million in state tax revenue at an effective 20 percent tax rate, but private research firms say that number will be higher, and create an estimated 6,100 new industry jobs, too.
It’s unclear how much of that money, or how many of the jobs, will be coming from losses suffered by Maine’s medical cannabis industry, which last year generated an estimated $111 million in sales, making it one of Maine’s biggest industries, according to state tax records. In other states, recreational markets have hurt medical cannabis sales.
To open a recreational marijuana business in Maine, an applicant must have completed three licensing phases: an initial state conditional license, where an applicant’s finances and experience is reviewed; authorization from a host community; and final active state licensing, where an applicant’s operational and security plans are approved.
For many, local permitting is the most challenging phase, requiring a community to opt into the marijuana industry as well as sign off on the usual zoning approvals. Unlike in Massachusetts, for example, communities that host a marijuana business do not receive any direct stipends from the business, nor a cut of any sales taxes generated by the business.
Fifty-two of Maine’s 430 towns and 23 cities have opted to allow some kind of adult-use business to open within their borders, from as far north as Grand Isle to as far south as Eliot. Each town could decide what kind of recreational business was welcome. Camden will only allow grows, and Kennebunk only labs. Fryeburg won’t allow retail, while Newry said no to all but retail.