Possible Supply Chain Issues Loom for Maine’s Adult Use Market

February 6th, 2020, Adult-use, Cannabis Law, Cultivation, Manufacturing, Medical, Regulatory, Retail, State

With the rollout of Maine’s recreational market just months away, many are wondering whether there will be enough product on the shelves to satisfy customers’ demands.  The state has not yet issued any active licenses for adult use marijuana cultivation facilities, manufacturing facilities, or marijuana stores, and the law restricts the transfer of medical marijuana into the adult use market. 

Given the production timelines in the cannabis industry—11 to 16 weeks just from clone to harvest (exclusive of drying, curing, trimming, testing, and packaging)—it will take almost a full year after the state issues active licenses in order for the industry to establish predictable, consistent supply chains.

While Maine law currently allows for the transfer of plants from the medical marijuana market to the adult use marijuana market, there is no legal avenue for the transfer of flower or marijuana products. 

Furthermore, the transfer of plants can only occur between medical marijuana caregivers or dispensaries and adult use licensees with “identical ownership.”  This means that the 2,500+ registered caregivers in Maine will only able to wholesale medical marijuana plants to adult use licensees under a very limited set of circumstances. 

Because registered caregivers in Maine can only operate legally as sole proprietors, the current regulations provide that the adult use marijuana licensee receiving the medical marijuana plants would have to be solely owned by the caregiver who is transferring those plants.

This restriction prohibits the participation of caregivers that partnered with other individuals or entities to create adult use marijuana businesses, which are intended to serve a much larger marketplace.  Adult use marijuana businesses can have multiple owners, so long as the individuals who own 51% or more of the business satisfy the Maine residency requirements.  The regulations also prohibit caregivers from selling their plants in wholesale transactions to other caregivers that have adult use cultivation facilities.

There are bills before the Maine State Legislature that could help address the limitations outlined above by allowing for a broader transfer of marijuana flower and/or marijuana products from the medical market to the adult use market, albeit with a number of limitations.  Drummond Woodsum will post updates as the legislative session progresses.