Maine lawmakers want to offer the first recreational marijuana business licenses to residents who have lived here for at least four years.
A legislative committee voted Tuesday to boost the minimum residency requirement to get a state license to grow, manufacture or sell recreational marijuana from three to four years during its final review of the bill that would launch adult-use cannabis sales in Maine.
The committee tried to overhaul the 2016 citizen initiative that legalized recreational cannabis last year, but Gov. Paul LePage vetoed it. The new version of the bill is more conservative, eliminating cannabis social clubs and cutting an individual’s home grow from six to three plants.
“The last few months, we listened carefully and made strategic changes we think improved the bill” Sen. Roger Katz, R-Augusta, the committee’s Senate chairman, said after the Tuesday workshop. “We are proud of our work.”
Katz hopes this bill will have LePage’s support, but committee members are confident that they have the votes to override a veto if necessary. Last November, supporters fell 17 votes shy of being able to adopt the legislation without LePage’s signature.
On Tuesday, lawmakers hoped to pick up a few extra votes by boosting the residency requirement, which would give those who lived here before voters approved legalization at the polls a head start in the market before deep-pocketed investors could set up shop.
At the urging of Sen. Bruce Bickford, R-Auburn, the committee decided to add the extra year to its initial licensing preference to ensure that “ordinary Maine citizens (are) able to have first chance to succeed in the new industry,” Katz said.
The committee also voted to allow medical marijuana dispensaries and caregivers who make the jump into adult-use marijuana to buy or transfer an unlimited number of marijuana plants from their own grow or that of other caregivers or dispensaries during the first year of operation.
In its earlier version, the committee had permitted only a one-time transfer from one medical grow.
Some marijuana advocates, however, have concerns about the committee bill.
“We are seriously concerned that the (committee bill) will lead to a rampant illicit market with unlimited commercial cultivation,” said Paul McCarrier, the president of Legalize Maine, which wrote the legalization ballot question. “Cutting adults’ personal grow in half is a slap in the face to Joe Six Plant, and Joe is voting in November.”
McCarrier has advocated for the Legislature to leave the citizen referendum law as it was approved.
This bill would replace the Marijuana Legalization Act approved by voters in a 2016 referendum. That law, which is in effect now even though the state is not issuing any commercial licenses, set a 10 percent retail sales tax but did not levy an excise tax, gave medical marijuana caregivers a licensing preference but not residents, allowed adults to grow up to six plants on their property or someone else’s with permission, and allowed social clubs, drive-up windows and home delivery.
The bill will now be printed in its final form, the fiscal note will be updated and it should be ready to head to the floor of the House “fairly soon,” Katz said. The initial fiscal note was very complicated, making it difficult for committee members to sell it to their colleagues, he said.
Last year, LePage worried that the 20 percent sales tax in the committee’s bill might not raise enough revenue to pay to implement and run the new program. But this new version, with its10 percent sales tax and excise taxes for different parts of the plant, will pay for itself, state analyst Daniel Tartakoff said.
Upon full implementation of the bill, state fiscal analysts predict, the state should realize $19 million to $20 million in sales and excise tax revenues a year. The state might see some decline in the sales taxes levied on medical marijuana sales, but analysts say those losses would be minimal.
The bill would set a 10 percent tax on marijuana at the point of sale, which is what consumers would see on their sales receipt, in addition to a 21.5 percent excise tax on wholesale marijuana that would be paid by processors and retailers. State officials say that would result in an effective tax rate of 20 percent, which would put Maine right alongside Oregon in having the lowest recreational marijuana tax rates in the nation.
Penelope Overton can be contacted at 791-6463 or at:
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