New Market: Maine’s tourism industry a potential boon for rec MJ businesses

This is the eighth article in a series looking at the potential cannabis market in each of the eight states that approved recreational or medical marijuana initiatives in the 2016 election. Click here for previous installments.

 

By Bart Schaneman

Buoyed by the state’s reputation as an East Coast tourist mecca with a dramatic coastline, the recreational marijuana market in Maine should generate plenty of opportunities for cannabis businesses – provided delays don’t hamper the industry’s rollout.

In a close vote last November, 50.26% of Mainers voted to legalize adult-use marijuana. A recount effort by “No” backers failed.

Still, industry watchers expect state lawmakers to exercise caution while developing legislation to govern the rec market. Lawmakers have begun voting on a bill to delay the start of retail sales by several months, until at least February 2018.

According to Marijuana Business Daily estimates, Maine’s recreational industry could bring in $250 million-$350 million in annual retail sales within a few years of the program’s launch. Sales are expected to kick off sometime in 2018, at the earliest.

The new law will give entrepreneurs plenty of latitude to participate. With the exception of growers, other MJ business sectors don’t face a license cap. And there are no residency requirements.

Maine’s location also should provide a lift.

Maine and Massachusetts are the East Coast’s only adult-use markets, positioning both to draw cannabis-minded visitors from nearby states and beyond. Overall tourism revenue in Maine amounted to $5.65 billion in 2015, with 33.9 million visitors, according to the Maine Office of Tourism.

Maine’s marijuana businesses – from growers, lawyers and greenhouse suppliers to retailers and manufacturers – should expect the tourism market to provide a “gigantic boost,” said Paul McCarrier, president of Legalize Maine, which wrote the legalization initiative.

David Boyer, head of the pro-legalization group Maine’s Campaign to Regulate Marijuana Like Alcohol, agreed.

“If tourists are coming here to be the first in New England to possess a substance safer than alcohol, then they should have a place to do it,” Boyer said. He pointed out that while the bulk of the state’s tourism occurs in the summer, Maine also has skiing in the winter and draws crowds of “leaf peepers” in the fall.

Business opportunities

“During the campaign we tried to highlight for folks that it’s not just buying and selling marijuana,” Boyer said. “There are a lot of ancillary companies that will benefit from having a regulated and taxed industry.”

Boyer cited businesses ranging from electricians and accountants to heating and air-conditioning contractors, budtenders and realtors.

He also anticipates a transportation industry will develop to deliver cannabis and MJ goods between growers, product manufacturers – such as edibles companies – and retailers.

“There’s a lot of opportunity for those who want to deal in the plant and those who don’t,” Boyer added.

With its aging workforce, Maine also is home to mill and shoe factory workers – skills and backgrounds that a cultivator may want.

“I see a lot of business opportunities for the ground-floor, rank-and-file workers,” said Legalize Maine’s McCarrier.

Also, workers with experience in edibles or who are good trimmers should have opportunities. A motivated trimmer can make $60,000 a year, McCarrier said.

Managerial talent also will be in demand.

“If you’re going to have a 5,000-square-foot facility and a retail store you’re probably going to need to have seven to nine employees. Who’s going to manage them?” McCarrier asked.

Licenses, timeline

Vertical integration will no longer be required in Maine – as it is in the medical cannabis industry. The new licensing scheme is set to include the following license categories:

  • Retail
  • Social club
  • Manufacturing
  • Cultivation
  • Testing lab

There are no license limits except for cultivators, which are capped at a total of 800,000 square feet. The law dedicates 40% of that total to operations 3,000 square feet or less, and the remaining 60% to operations 3,000 to 30,000 square feet.

No single cultivator license can exceed 30,000 square feet. The 800,000-square-feet total can be expanded, if necessary.

Entrepreneurs and business owners from both in and out of Maine can apply for licenses once the applications are made public. There are no residency requirements.

Mainers in the industry expect out-of-staters to join in the state’s market, Boyer said. After all, four of the first eight licenses in the MMJ market went to a group from California that backed Wellness Connection of Maine.

However, McCarrier said having residency in Maine will be a business owner’s best opportunity for success.

“Maine is not going to be a cakewalk if you haven’t been in Maine already,” he said. “It’s going to be very difficult if you’re trying to come in from outside Maine to just set up shop.”

Personal use and home cultivation are poised to start Jan. 30.

Last November’s ballot initiative, Question 1, gives lawmakers and regulators nine months to write the rules. The legislation moving through the statehouse would require the rulemaking to be done by the end of October; but rec sales would be delayed until at least February 2018, according to the Portland Press Herald.

Boyer doesn’t expect retail sales of marijuana until sometime in 2018, at the earliest.

Medical and recreational

Boyer and McCarrier don’t expect the MMJ market will be folded up into the rec market.

“They’ll completely be able to coexist,” McCarrier said.

Biggest challenges

The biggest unknown facing the new rec market is government regulation, McCarrier said.

Maine has a conservative governor who is pro-business but anti-marijuana, as McCarrier put it. “We’re dealing with a senate president who’s so anti-marijuana that he’d rather see his constituents be hurt than have jobs.”

Still, the rec market offers a fresh start for Maine’s cannabis industry. It could serve to diversify a market that until now has been closed to all but eight dispensaries and caregivers with a limited number of patients.

“I think it’s important for the industry to work cooperatively,” Boyer said. “We’ve seen a lot of division in Maine and I think it’s time for us to come together.”

Daily News | Cultivation | Dispensary/Retail Store Business News | Featured | Maine Medical Cannabis Business & Marijuana Legal News | Recreational Marijuana News | Special Series: New Markets

 1 Comment

  1. Jennifer Gates August 22, 2017

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