More Changes to Maine’s Marijuana Program Are on the Table on February 10

Earlier this week, the Veterans and Legal Affairs Committee in Maine’s legislature considered a series of bills related to Maine’s marijuana program. I discussed one of those in this blog post.

Now, there are three more bills up for a public hearing on February 10:

• An Act to Impose Further Restrictions on Where Marijuana May Be Smoked
• An Act to Improve Compliance with Department of Administrative and Financial Services, Office of Marijuana Policy Registration and Licensure Requirements
• An Act to Amend the Marijuana Legalization Act and Make Other Implementing Changes 

The latter two are both children of the Office of Marijuana Policy. Those who were present at the hearing earlier this week will recall that OMP asked the committee to hold off on any significant changes to Maine’s adult use program. Perhaps consistent with this position, nothing proposed in either OMP bill is really big or structural. But…

Of note, the committee will be considering a new category of licensee: a "marijuana establishment support entity," which seems to be a way for OMP to regulate "sample collectors" who will be working with testing facilities and, perhaps, others who touch the product but don’t fit neatly into a current category of licensee.

OMP is also proposing an exemption to Maine’s Freedom of Access Act for certain discrete categories of information, including trade secrets related to marijuana cultivation, etc., and standard operating procedures for marijuana establishments.

Big picture: we can expect the State to continue tweaking our marijuana programs for years to come. I won’t be surprised by some key changes this session, with more and bigger changes to come down the road.

Maine’s Legislature Confronts the Unintended Consequences of Required Marijuana Testing, Before Those Consequences Even Happen

The Maine Legislature’s Joint Standing Committee on Veterans and Legal Affairs will consider a host of marijuana-related bills next Monday, January 27. Check all five of them out here. The one I want to focus on is LD 1545, An Act Regarding the Testing of Adult Use Marijuana and Marijuana Products because this bill tries to address what has been a serious problem in most states launching adult use programs: a shortage of testing labs and resulting bottlenecks in those products.

For starters, LD 1545 seeks to amend language in Title 28-B, governing adult use marijuana in Maine, which currently requires ALL adult use marijuana or marijuana products to be tested by a licensed lab before sale. So what’s the problem with this? There’s serious and well-founded concerns that Maine simply won’t have enough testing labs at least for the launch of the program. This will lead to bottlenecks and significant delays in selling products to consumers. LD 1545 addresses this by permitting any product that has been held by a testing lab for five days without being tested to be sold anyway, with a disclaimer that the product hasn’t been tested.

This seems like a straightforward solution to an anticipated problem, but it seems worth looking briefly at the experience of other states with testing bottlenecks and lab shortages.

California’s lab shortages and bottlenecks circa 2018 were the stuff legends are made of. Now, if anything, California seems to have overcompensated in response and has 27 licensed labs (which isn’t that many, considering the state’s population), none of which report being at full capacity. These labs are facing business problems of their own, with many customers not paying timely or not paying at all. Some suggest that this is a symptom of the broader problem that California’s illicit marijuana market remains dominant and may even be getting stronger.

Closer to home, a shortage of testing labs has been a problem for Massachusetts. As is expected for Maine, Massachusetts started off with only two licensed testing labs. Labs were reporting demand for up to 4,000 tests per day, though, within a year of the adult use program’s launch, the state’s Cannabis Control Commission was reporting that, even with two labs, wait times were down to just a couple of days.

It’s hard to know exactly how Maine’s testing laws will affect the adult use market until that market has really taken off. Certainly, any serious impediments to selling product quickly will encourage return to the black market. I’m sure this will be part of the discussion in the VLA committee on Monday. See you there!

Maine’s Hemp Policies Remain Turbulent as the Legislature Reconvenes

The legislature is reconvening on hemp issues this coming Thursday, January 9. The Committee on Agriculture, Conservation and Forestry is considering a simple resolve "Directing the Department of Agriculture, Conservation and Forestry to Submit to the United States Secretary of Agriculture a Plan for Continued Implementation of the Maine Industrial Hemp Program." This resolve is self-explanatory; it will direct the Department to submit a plan to the USDA for hemp production which would finally bring Maine’s program in line with federal law. 

What this resolve doesn’t do is address a more pressing issue with Maine’s hemp policies at the moment: the continued crackdown on CBD products manufactured out-of-state. We’ve heard multiple reports of state inspectors telling retailers to sell whatever is on their shelves, but not to buy any more CBD products from outside Maine. The policy formally took effect on January 1 (though the original guidance issued by the State said December 1), and it remains to be seen how aggressive the crackdown will be, especially since a large portion of current CBD ingestible products on the shelves in Maine are from elsewhere.

Maine Legislature to Address Vaping Devices and THC

As readers may have seen, a list of the bills that the Maine Legislature may be discussing this winter has been released. I’m going to focus on the bills related to vaping for this post, since there are a lot of them. These bills are obviously a response to a string of vaping-related illnesses and deaths around the country in recent months, including several in Maine. It’s been reported that many of the victims were using vape pens, etc., loaded with THC rather than nicotine and, although it is not clear that contaminated THC rather than thickeners or other additives are causing these illnesses, the Maine Legislature has responded to these reports. These are some relevant bills offered by our legislators:

LR: 2763
Sponsor: Representative Cooper of Yarmouth
Title: An Act To Prohibit the Sale of Vaping Devices and Similar Electronic Smoking Devices 

LR: 2765
Sponsor: Senator Millett of Cumberland
Title: An Act To Enact Restrictions on Electronic Smoking Devices 

LR: 2837
Sponsor: Representative Hutchins of Penobscot
Title: An Act To Prohibit the Addition of Tetrahydrocannabinol and of Cannabidiol to Liquids Used in Vaping Devices 

LR: 2969
Sponsor: Senator Dow of Lincoln
Title: An Act To Ban Persons under 21 Years of Age from Purchasing, Possessing or Using Vaping Products 

LR: 2682
Sponsor: Representative Cooper of Yarmouth
Title: Resolve, Directing the Department of Health and Human Services To Study the Average Potency of Medical Marijuana and Illegal Marijuana, the Adverse Health Effects of Marijuana Use and the Adverse Physical Effect of Using Vaping Devices To Inhale Marijuana

VLA Committee Recommends Changes to Adult Use Rules

The adult use rules necessary to launch Maine’s new market are still winding their way through the legislature, but they’ve been voted out of committee with a number of changes, and should be sent along (in one form or another) to the Governor in the next couple days. The majority report from the Veterans and Legal Affairs Committee contains the changes to the rules and some related changes to statute. This was handed out during amendment review in the committee yesterday.

While you can peruse the majority report for all the details, a couple of things stand out:

1. The committee is amending statute to state that adult use edibles are not “considered to be adulterated” under Maine’s food code. This places adult use edibles in the same ranks as medical marijuana edibles and, though in different statute, foods containing CBD. 
2. You’ll see that in Section 8 of the majority report, the legislature does not actually “redline” the rules created by the Office of Marijuana Policy. Rather, the OMP will receive these specific directives from the legislature, and it will be up to the OMP to put the rules in a final form consistent with these directives. This leaves a few things up in the air about the rules until we see the OMP’s final version. 
3. The legislature is directing the OMP to eliminate the terms “other interested parties,” “party of control” and “true party of interest” from the adult use rules. The rules will “substitute for those deleted terms the statutory terminology in Title 28-B, subchapter 2 regarding the characterization of ownership interests.” This directive should serve to bring the rules in line with the statute in terms of residency requirements for officers and directors, as well as for owners of marijuana establishments. We have in the past written on the residency requirements generally (here, here, and here). 

Stay tuned as we expect this to move quickly through the legislature and on to the Governor.

The Public Hearing on Proposed Adult Use Cannabis Rules Is Over, But the Public Comment Period Continues

The public hearing on the proposed adult use cannabis rules took place this morning at the Holiday Inn in Portland. The room was packed with a pretty diverse group of industry folks – banks, towns, and marijuana establishments large and small were all well-represented today. Comments were limited to three minutes per person, and the hearing took barely more than two hours total. Some of the reoccurring issues throughout the morning included: 

• Concerns that testing labs will be a serious bottleneck and drag on the adult use industry
• A number of smaller operators are worried that the rules are too comprehensive and "onerous" and will drive the industry underground
• Concerns that the rules will limit out-of-state investment and make it difficult to work with experts and consultants from other states
• Questions about confidentiality provisions in the rules and the degree that applicant info will be publicly available

The panel of regulators from Department of Administrative and Financial Services (DAFS) and the Office of Marijuana Policy (OMP) seemed to be diligently taking notes this morning, and we’ll have to wait and see how amenable they are to changing the rules as a result of this process. It’s a safe bet that written comments (due June 2) will be more impactful than today’s three-minute spiels, but how impactful, we don’t know. The OMP says that they plan to provisionally adopt final rules and send those rules to the legislature for approval in June. If approved by the legislature, then the rules would likely be scheduled to take effect 90 days later.

What Is Going on in the World of Hemp?

Anyone involved in the hemp and CBD industry in Maine has been on a roller coaster ride this year. On December 20, 2018, hemp became (kind of) legal federally. But then the U.S. Food and Drug Administration said that non-approved food products containing CBD remained illegal. Then Maine regulators started telling retailers that they weren’t allowed to sell food products containing CBD, only to walk that position back. In response, the State Legislature passed LD 630, which legalizes the sale of food products containing CBD. Meanwhile, at the federal level, the FDA appears to be taking the position that virtually any CBD product meant for human consumption is illegal. 

Where does this leave us? Folks in Maine appear to be safe from enforcement for the time being, with the notable exception of those who make explicit claims that CBD has therapeutic benefits. If you’re growing, processing, or selling hemp and CBD, though, it’s unlikely that the feds are going to knock down your door tomorrow, and LD 630 is keeping the State at bay for now. But watch out, because rulemaking is coming, and we’re sure to see rules that aim to limit the import (and perhaps the export?) of CBD products, create strict labeling and testing standards, and limit the use of CBD in animal food. There will be more details on a lot of the specifics here in future posts, but the situation is certainly fluid. 

Bottom line: Legalities aside, it seems to be full speed ahead in Maine, with a few notable restrictions. Avoid making public claims of therapeutic benefits (like "CBD cures cancer"). Make sure that your product is clean, free of mold and pesticides, etc. and has a THC content below 0.3 percent. Do what you can to ensure your product is accurately labeled. (Check out this study, which concludes that 70 percent of CBD products are inaccurately labeled in terms of CBD content.) And be aware of quickly changing laws and rules at the state and federal level that could impact your business.

Adult-use Rulemaking Is Underway in Maine – This Is Your Chance to Comment

After releasing pre-draft proposed rules for unofficial comment to gauge the initial reaction of the public, Maine's Office of Marijuana Policy (OMP) has now released the official no-longer-in-draft-form proposed rules for real comment. In other words, rulemaking has begun. With a public hearing scheduled for May 23 in Portland, and all public comment due by 5:00 pm on Sunday, June 2, perhaps we can expect rulemaking to be complete and these major substantive rules to be back in front of the Maine Legislature for approval sometime in June, during this session?

The OMP has conveniently posted all of the unofficial comments received in response to the draft rules, and their responses, online here. This provides some interesting insights, and some very predictable ones, into what the different stakeholders care about, and how the State plans to deal with these concerns. Also, kudos to the OMP for using Google Docs – very practical and mainstream for government!