When Your Town Says “No!”

By Jason G Litalien, Esq

Published July 1, 2021 at https://www.flipsnack.com/JibbahZine/issue-3-um8bm3co7k/full-view.html on Page 42

One of the issues I have run into while helping caregivers get their businesses up and growing is towns that think that they can control if a caregiver has a grow in that municipality. The simple answer is that they do not have the authority to stop you, so let’s get into it a little further.

Towns believe that the Maine Constitution gives them the power to reject caregiver cultivation because of something called “Home Rule.” Article 8 Part 2 of our Constitution allows municipalities to make many decisions without State interference. 30-A M.R.S.A. §3001 works with this part of the Constitution and attempts to clarify it. Zoning and local ordinances are the best examples of Home Rule, so towns can creating zoning rules and local ordinances related to many things. However, if the Legislature passes a law and the Governor signs it, then the municipality cannot rely on Home Rule to do what they want. §3001 specifically states that municipalities cannot “frustrate the purpose of any state law.”

22 M.R.S. §2429 D(1) is clear in that it gives caregivers licensed under this statute authority to “[c]ultivate up to 30 mature marijuana plants or 500 square feet of plant canopy, 60 immature marijuana plants and unlimited seedlings.” Because this is in the actual statute, local municipalities cannot prevent it. In other words, if you get your caregiver license pursuant to this statute, you are clear to grow up to what your license allows.

The statute also states that municipalities may not prohibit or limit the number of caregivers in that municipality. This is also important because some towns will say “we only allow 4 caregivers here and you are the 5th, sorry.” Actually, you can tell them sorry because they are violating the law by limiting the number of caregivers.

Some things that towns can do are prohibit retail stores, recreational marijuana grows, and require that you register with them. Some towns charge $10 a year to register with them so they know that you are a caregiver and within their jurisdiction. The law does allow towns to outright prohibit any retail marijuana stores and unless the town “opts-in” to rec weed, then you cannot grow or sell rec weed within the town.

I want to take a small detour since I mentioned rec weed. DO NOT DELIVER rec weed! I know that some people think they are cute by charging obscene delivery fees and “giving” the weed to the person they deliver to. No one believes that it costs $250 to deliver cannabis 5 miles. Look at it this way, Papa John’s charges a flat fee to deliver 1 pizza or 100 pizzas within their delivery area. No inspector or law enforcement agent believes that you are giving away birthday cake that you paid $2,000 a pound for, for free and charging $250 to deliver 2 oz and then charging the guy next door $125 to deliver 1 oz. Just stop doing it, you are not being cute, you are trafficking drugs.

OK, back to the point about towns, they cannot prohibit you from making deliveries of medical marijuana in their town. If you are a licensed caregiver, one of the things you are allowed by statute to do is deliver medicine to your patients. The silly “5 patient” rule was finally abandoned so everyone that has a card can be your patient and you can deliver to them anywhere in the State of Maine. Just like Papa John’s in South Portland can deliver to Portland without a special license in Portland, you can deliver medical marijuana to a cardholder.

18-691 Code of Maine Rules Chapter 2 Section 3(A) states that “[a] person authorized to cultivate marijuana for medical use is restricted to cultivating in an enclosed, locked facility or area on property that is owned or under the control of the qualifying patient, caregiver or registered dispensary.” No matter what, your grow must be able to be locked so that people can’t just ride up in their side-by-side and grab flower or the entire plant. Plus, that plant is worth $6000 to $8000, so you definitely want to secure it. The town may have the authority to require that you grow indoors vs outdoors, this is not as clear.

If your town is giving you a hard time, give me a call at 207-518-8181 and we can figure out what they can or cannot do.

Every situation is different, and this article is for informational purposes only. It is not providing legal advice and you should consult a qualified attorney if you have a legal question.

Rec or Medical? That is the question...

By Jason G Litalien, Esq

Published August 1, 2021 at https://www.flipsnack.com/JibbahZine/issue-4-tkszeaitk5/full-view.html on Page 37

Almost daily, I get a call from someone interested in growing cannabis in Maine and they want to know if they should go Rec or Medical. I advise everyone to stick with medical and there are several reasons. Cost and profitability are the two biggest reasons and regulations is the usually the third.

With the passage of several bills last month, it seems that the groups that set out to fight big-canna were successful at stopping a repeat of what we have seen in other states. The most important change, I believe, is changing OMP rulemaking to major substantive rules, thus creating more oversight and ensuring that the small-scale caregiver still has a voice. Hopefully this will prevent the implementation of many of the proposed rules that OMP put out in January, including requiring METRC for small-scale caregivers.

Cost and profitability go hand-in-hand. You need to keep costs down or increase revenue if you want to be profitable. I work with small-scale caregivers mostly, so I do not see people coming in with millions of dollars to throw at a retail store and then wait 5 years to make a profit. Most of my clients are just getting started and medical is a perfect place to start. The initial investment can be as little as a few thousand dollars and the rewards can be enormous. If you want to open a rec store, then do it after you have had a successful run in medical.

Could you go straight to opening a rec store, sure you can, but why would you? First, you need to find a town that allows rec stores, this is a hard enough task on its own. Portland and South Portland are saturated with retail marijuana stores and Portland charges obscene licensing fees, $10,000 a year for a rec store license and $5,000 a year for a medical store license! If you open a small-scale caregiver business and work from home, you do not have to worry about those fees.

Rec weed has to be tested, tracked with METRC, there is an excise tax on the wholesale and a sales tax on the retail, all of which make it more expensive, meaning that you need to charge much more to make the same profit. Getting a med card for under $50 a year will save your clients the $50 probably on their first order, because your product costs far less.

Then we have delivery! Rec is illegal to deliver, so if you want to run a legitimate marijuana operation, you can only deliver medical weed to clients with medical cards. This is a huge advantage, because your clients can be anywhere in the State, not just those that find your store online. If I can get a product for less money and have it delivered to my house, why would I drive to a rec store and pay more? I know price is not the only reason, but this article is focused on the business side, not the user side.

Small-scale caregivers, whether they are cultivating or reselling, serve an important role in getting medicine to Mainers. I have many clients who do not cultivate, they buy from others at wholesale prices and then resell to their clients. That is a huge advantage for medical, because you do not need $100k in product on your shelves whenever someone comes in. If you live close enough to your supply line, then you can keep a small amount on hand and buy more as you sell more. It allows you to grow your business slowly and without shelling out as much money up front to start it.

Medical is faster to get started, has less oversight, can be more profitable if run properly, allows for greater expansion, is a proven business model in Maine, and if you read last month’s article, then you also know that in most situations your town cannot stop you from operating a small-scale caregiver business unless you have violated an ordinance or law. I cannot think of a reason why I would choose rec over medical.

Every situation is different, and this article is for informational purposes only, this is not legal advice, and you should consult a qualified attorney if you have a legal question.