Ever since voters in Maine approved a ballot measure to legalize recreational marijuana in 2016, the state had never formulated rules to regulate the commercialization of adult-use cannabis even if residents were allowed to grow a limited number of cannabis plants soon after the midterm vote that paved the way for recreational marijuana. Two years later, the state has released its draft rules indicating how the recreational market will be regulated.
The draft rules indicate that applicants will first have to obtain a conditional license from the state before getting the approval of the town or city where the applicants wish to operate their recreational marijuana businesses. Once the local authority approves, then the state will give the applicant a license that is valid for 12 months.
According to the draft rules, the state will take approximately 90 days before giving applicants the conditional license (the first step of the licensing process). During that time, the state will look into the criminal background of the applicant as well as any other needed checks before the applicant is given the conditional license.
However, the biggest hurdle that applicants may have to navigate is the different conditions that local authorities (towns and cities) will impose before one obtains their approval. Some local jurisdictions have already formulated their own recreational cannabis rules while others are holding out until the state releases their final rules. The local authorities will then analyze those state rules and decide whether recreational marijuana will be allowed within their jurisdictions or not.
The draft rules released by the state indicate that any local authority that doesn’t pass its own recreational marijuana rules will remain cannabis-free since their non-action will be deemed as a lack of interest in having recreational marijuana businesses within their jurisdiction.
It is also worth noting that the draft rules restrict the ownership of recreational cannabis businesses within Maine to residents of the state. Corporate veils to sidestep this requirement are strictly prohibited.
In fact, the rules state that from June 2021, only residents who have filed their tax returns in Maine for at least 4 years will be eligible for marijuana business licenses. The ballot measure that legalized recreational marijuana had stated that medical cannabis businesses would be given first priority when issuing recreational cannabis licenses.
However, that provision was changed legislatively so that the emphasis could be placed on being a resident of the state. This change was intended to ensure that Mainers benefited from this industry.
The draft rules go deeper into the specific conditions that one must fulfill in order to obtain a cultivation, product manufacturing and retail license. Rules governing product testing will be released later, and they will not need legislative approval.
The current draft rules are now open to public comment and the state hopes to start receiving applications later this year if the legislators can approve the draft rules before the summer break of the legislature commences.
Sugarmade, Inc. (OTCQB: SGMD) and Supreme Cannabis Company Inc. (TSX.V: FIRE) (OTCQX: SPRWF) hope that the long-awaited draft rules will be processed quickly so that Maine can enjoy the benefits of commercializing recreational cannabis.
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