The Constitution of the United States contains something that is referred to as “The Supremacy Clause”. This clause was put in the Constitution to clear up any ambiguity or conflicts that could arise when laws of the State differed from the laws of the Federal Government. In short, any activity that involves marijuana currently is in violation of Federal Law, so why have states, including Maine, continued to publish new rules or to allow new businesses to emerge?
The short answer is opportunity. There are many theories as to why marijuana was made illegal; my personal favorite being that the founding fathers all grew tobacco and didn’t want the competition. With the passing of the Farm Bill and new proposed banking initiatives working their way through the House and Senate, it is logical to see a path to legality. While not official, the Federal Government has been content to leave local marijuana businesses alone if they comply with all local laws (and pay Federal taxes!).
The new draft rules lay out what businesses need to be doing to prepare for application day. While the rules still need to be submitted for comment and approved by the legislator, the time to begin working on your business plan is now.
Compliance is going to control the industry. Given the anticipated demand for licenses, one slip by you or a business partner could find you sitting on the sidelines. Does your ownership group have the right makeup? Are there any “disqualifying drug offenses”? Are all your officers “Residents” as defined by the rules?
There are many issues to consider when starting a marijuana business. If you, or someone you know, want to learn more about the process, please reach out to Ainsworth, Thelin & Raftice and set up an appointment with Michael Vaillancourt, Chris Piasecki or Jake Bowie.
With the new recreational marijuana laws comes new business opportunity. Like any regulated business, entrepreneurs will face many regulatory hurdles. These issues include criminal background checks, licensing, police oversight, advertising and much more. Here, at Ainsworth, Thelin and Raftice, we can help with all aspects of business formation, compliance, and analysis of the laws, but that is just step one.
What is the first thing that comes to mind when you think of iconic brands? Coke, Amazon and Microsoft are all examples of companies that have built a successful brand. There is a short window of opportunity to get out ahead of the pack in Maine. So, while our office can help with all the legal logistics, including regulatory compliance, we will not create a logo, develop operating procedures or help run QuickBooks.
While I can tell entrepreneurs that they cannot use “people, animals or fruits” (not a joke) on their labels, my graphic design skills leave something to be desired. This is where Nucleus-One comes in.
I was fortunate to be able to meet with the owner of Nucleus-One, Jacques Santucci, and Nucleus-One’s Director, Connor Yost. Nucleus-One has assisted to launch marijuana businesses all over the United States. They help with strategy, branding, accounting and much more. Getting into the marijuana field is a capital-intensive endeavor, and this requires that you make your brand standout. Whether you wish to open a retail store, grow and distribute, or are still unsure which direction to go, Nucleus-One can provide your business the direction it needs.
Many Mainer’s are already speaking with lawyers, like Chris Piasecki, to set up companies and to position themselves for application day. Not as many, however, are focusing on issues that will become important factors for future success.
On January 15th attorney general nominee William Barr shared his opinion on the current state of the marijuana laws. His comments sent publicly traded Marijuana Companies spiraling down before mounting a comeback later on in the trading session.
William Barr said that the current system around marijuana laws is “untenable” and that he personally supports prohibiting marijuana all throughout the United States. Barr went on to say that although he feels this way personally, he would not go after cannabis businesses that comply with state regulations.
Marijuana remains a Schedule A drug under Federal Law, so comments of this nature could certainly spook individuals or businesses looking to establish themelves under Medical or new Adult Use Marijuana laws throughout Maine.
The question is, what does this mean? Sadly, in my opinion, this does not offer any more clarity than we already had. William Barr seems to be echoing the sentiments and following guidelines that are already in place. Compliance will be the single most important factor in the early days of this new industry. For the moment, the Federal government seems content to let States like Maine establish and enforce their own rules. As long as your business adheres to all of the rules and regulations of the State enforcement agencies, the status quo looks like it will remain the same.
I would urge anyone looking to get into the Marijuana field to bring a corporate attorney on very early in the process. It is much easier to comply with the rules from the outset rather than facing stiff fines, criminal liability, or loss of license down the road.
Businesses are already positioning themselves by applying for “Conditional Use” licenses or compiling all the necessary paperwork to be ready to submit their application the day Maine begins accepting them.
As always in this industry, all of this could change on a moment’s notice. I will be sure to update this article if this occurs.
Every individual or entity will have different factors that will impact your application process. If you want to schedule an initial consultation please reach out to us by clicking below.
First it was Medical Marijuana, now Adult Use is arriving at our doorstep. No matter your personal position on the matter, it is clear that Marijuana storefronts, both Medical and Recretational Use, will soon start popping up across the state. In fact, the first Medical storefront has already opened in Portland. While the State is not currently accepting applications for Adult Use Licenses, smart business owners are actively positioning themselves for when that day arrives.
It is important to note that while Recreational Marijuana is now legal in Maine, it remains illegal Federally. Please address this with any corporate counsel you decide to hire. In addition, everything published here is subject to possible change as the laws and application remain in constant fluidity.
What We Do Know:
- Maine passed the Marijuana Legalization Act (Click Here to Read Title 28-B)
- The State recently hired the same consultant that wrote the rules for Colorado’s recreational rules and expects a draft in April 2019.
- The State application process will be governed by the Department of Administrative and Financial Services (DAFS), this is the same authority that currently grants or denys licenses for Maine Medical Marijuana.
- There will be 4 types of licenses and DAFS will not restrict the amount of licenses they issue at the State level:
- Cultivation Facility;
- Testing Facility;
- Products Manufacturing Facility;
- Marijuana Store
- Every town in Maine that wants to allow Adult Use Facilities must OPT IN to the new law. In short, every town has the right to say no.
What We Do Not Know:
- The actual rules on how Title 28-B will be administered or enforced. We are expecting those in April 2019.
- What towns will OPT IN?
- What will the application look like? We have a general idea and the initial screening criteria can be found here.
- The actual timeline for when the State and Towns will begin accepting applications. The draft rules will be submitted for comment in April, but they will still need to accept feedback and finalize them.
This is a high level overview of the current state of affairs and each indiviual and company present a different legal situation. If you are considering trying to become a part of this new industry, please contact Chris Piasecki, Michael Vaillancourt, or Jacob Bowie of our Corporate Team to set up an appointment.