Local marijuana regulatory options

By Lynne Williams

Last month, all of the Mount Desert Island towns voted in favor of Measure One, the legalization of adult use of cannabis, as did Trenton and all of the Hancock County offshore islands. Clearly there is significant support in our neck of the woods.

As general counsel for Legalize Maine, and one of the drafters of the initiative, I am familiar with its details and am writing to clarify some issues and dispel some misperceptions.

The initiative sets up five business license categories: cultivation, retail, social club, product producer and testing facility. There are two tiers of cultivation licenses, but the largest cultivation size is 30,000 square feet. The total square footage to be cultivated in the entire state is 800,000 square feet. That fact limits the number of cultivator licenses that will be issued, and many applicants will qualify only for smaller cultivation licenses due to limited space, limited funding or other factors.

There is no state cap on the number of other licenses that can be issued.

A town can regulate retail facilities and social clubs and can impose local licensing requirements and zoning restrictions on such. When an applicant applies to the state for a retail or social club license, the town will be notified of the application.

For some rural towns, many of which don’t have land use ordinances, that notification will be pro forma. Those towns with land use ordinances will have 14 days to notify the state of the approval or denial of the application. However, it will make sense for applicants to be in touch with the town about their state application long before the town is notified of it by the state.

If an application is denied by the municipality, the licensee has 90 days to locate and obtain legal interest in another property in a municipality that approves of the retail establishment or social club before the state license is revoked.

Many Maine towns and cities, including Bar Harbor, have passed or are trying to pass a moratorium on cannabis businesses. A moratorium is not a ban but rather a time-out, designed to allow a town or city to decide how they want to treat cannabis businesses.

A moratorium is only for a six month period, although it can be extended for an additional six months if the town demonstrates that it is making progress on developing the ordinance amendments that are the basis for the moratorium. If Bar Harbor develops and passes ordinance amendments prior to the state issuing regulations on cannabis businesses, likely at least nine months in the future, and such amendments are at odds with state law as it develops, the town will need to revise or repeal such amendments, since local ordinances cannot conflict with state law.

A few additional clarifications are in order. There is significant concern, for example, about folks smoking cannabis outdoors, not surprising given that Maine is one of the earliest and most smoke-free states in the country. The initiative, however, is clear that public outdoor smoking of cannabis is prohibited. With respect to indoor smoking other than in private homes, the license for a “social club” encompasses a business within which a customer can consume cannabis but cannot take it off site.

Consumption includes, for example, the ingestion of edibles, smoking, vaping or using body products such as creams and salves. The business ideas that have come across my desk from clients throughout the state include a supper club, a spa, a cafe and a schooner offering a cannabis sailing hour. These are business ideas that fit well into a tourist town such as ours.

One way to regulate cannabis businesses would be to treat them the same as noncannabis businesses with the same underlying use. Retail stores would be limited to retail zones, social clubs serving food containing cannabis would be limited to zones that permit restaurants that serve liquor, and spas using cannabis body products would be limited to zones that permit spas.

While the initiative permits towns and cities to limit the number of cannabis retail stores and/or social clubs, or even to ban them outright, once they do allow cannabis businesses, even a limited number, the town will need to demonstrate a basis for treating them differently than businesses similarly situated.

The folks that I work with who want to open a cannabis business are small business people. They pay their taxes, know how to implement a business plan and understand customer service. Cannabis businesses are offering a new economic sector to Maine, along with jobs that will pay significantly higher than minimum wage, as other states that have legalized have demonstrated. While regulation is a given and well designed regulation is a goal, putting unnecessary roadblocks in the way of these budding businesses will just send them to other towns that are more welcoming. And there are many such towns in rural Maine.

It makes far more sense to treat these businesses as we treat other businesses, by determining appropriate locations and imposing fair licensing rules. Given the level of support that Bar Harbor and MDI have shown for these potential businesses, that is only fair.

Lynne Williams of Bar Harbor is a land use and small business attorney and served as chair of Bar Harbor’s Planning Board for three years.

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