Maine and its Marijuana Market

Editor’s Note: Today’s post comes from contributing editor Dr. Stefano Tijerina, a lecturer in management and the Chris Kobrack Research Fellow in Canandian Business History at the University’s of Maine’s Business School. 

Back in November of 2016 the people of Maine voted in favor of a referendum that legalized medical and recreational marijuana.  The medical marijuana market took off quickly, but recreational marijuana regulatory structures slowed down the process for those interested in the Tetrahydrocannabinol (THC).  It is now January 2020 and finally the state started accepting applications for recreational retailers.  

Cities across the state have now become competitors in a new and potentially lucrative market that will be up for grabs, and that will ultimately change the local economies across the state.  Like Colorado, California, Nevada, and numerous others states that have legalized medical and recreational marijuana, Maine is positioning itself as a competitor in this emerging market.[1]

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Many entrepreneurs envision Maine becoming a tourist attraction for its local experience, keeping the vertical integration of the business as local as possible, from the development and harvesting of the plant to the recreational sale, and everything in between.  As indicated by marijuana entrepreneur from Belfast, Maine, Paul McCarrier, the goal is to commit to a Maine-based system, much like the microbrewery industry that has flourished across the state in the past ten years.[2]

The forecast of marijuana sales for Maine indicate that the initial market of $56 million in sales value will reach $432 million by the year 2025.[3] This means that the market is projected to grow almost 8 times its size in less than ten years.  This is a drop in the bucket, compared to the national forecasts. The national recreational and medical market is “projected to more than double from as much as $48 billion in 2019 to $106 billion in 2023.”[4]  The economic development opportunities are tremendous, particularly for states like Maine, that have struggled to recover from the impacts of globalization.  

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One thing is clear, the recreational market will outpace the medical marijuana market; that is where the money is, state legislators know it and so does the business sector.  Local governments also know it, and therefore are salivating over the tax revenues. The era of the taboo is slowly fading away and the new era of capitalist opportunism is on the horizon.  

While medical marijuana is taxed at 5.5 percent, recreational marijuana will be taxed at 20 percent.  It is true that medical marijuana is priced much higher that recreational marijuana, but the difference will be volume.  The recreational market will, in theory, be in higher demand. Of course, this is all speculation, we will have to wait and see what happens when legal consumers (at least 21 years of age) can start buying recreational marijuana in the state-regulated “cannabis clubs” and retail stores that will pop up across Maine.

I have seen the facilities in the Canadian Maritime provinces and they are not appealing; it is not Amsterdam for sure.  I wonder how the aesthetics of the industry will look like in Maine; how will it integrate to the local architecture? How appealing it will be to the tourist or the local consumer?  How will the industry preserve that local feeling? Will the industry be geared toward pedestrian-friendly designs? Will it work hand-in-hand with the local food, microbrewery, and other entertainment industries?  Will it transform the Maine experience as the Boomer generation fades away and new generations take over the market, the design of cities and towns? What kind of secondary markets will evolve from this new cannabis market?  

All is uncertain at this time, but so was the world of alcohol in the early Twentieth Century.  Who would have imagined back then that bars and pubs would take over cities? Who would have imagined that alcohol would take over airports and even supermarkets?  Who would have imagined that the industry would take over urban and rural space?  

Perhaps, not very far from now, the cannabis industry will be at the core of your Maine experience, whether you are visiting, passing by or making a living in the Pine Tree State.  It is not far-fetched to think that the cannabis industry will leave its mark in the history of the state, just like cod, the forest, and lobster industries. By legalizing the development of a medical and recreational market, a new historical and temporal spatial dimension has begun to be constructed right on front of our eyes; were are living history in the making.  Perhaps the industry will help us reimagine what “Welcome to Maine the Way Life Should Be” means.

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NOTES:

  1. A total of 33 states have either legalized medical or recreational marijuana.  Those states that have legalized both medical and recreational marijuana include Nevada, California, Oregon, Washington, Alaska, Colorado, Illinois, Michigan, Maine, Vermont, and Massachusetts.  Florida, Hawaii, Louisiana, Arkansas, Oklahoma, Missouri, New Mexico, Arizona, Utah, Montana, North Dakota, Minnesota, Ohio, West Virginia, Pennsylvania, Maryland, Delaware, New Jersey, New York, Connecticut, Rhode Island, and New Hampshire have legalized medical marijuana. (State Marijuana Laws in 2019 Map. Governing: The Future of States and Localities. June 25, 2019.  Accessed January 9, 2020. https://www.governing.com/gov-data/safety-justice/state-marijuana-laws-map-medical-recreational.html)
  2. 13WGME. “Maine is one step closer toward recreational marijuana sales.” January 6, 2020. Accessed January 9, 2020. https://wgme.com/news/marijuana-in-maine/maine-is-one-step-closer-toward-recreational-marijuana-sales
  3. Jan Conway. “Forecast of marijuana sales value in Maine from 2016 to 2025.” Statista. March 5, 2019.  Accessed January 9, 2020.  https://www.statista.com/statistics/798065/us-maine-cannabis-sales-value-forecast/
  4. Lori Valigra. “How the first year of Maine’s recreational marijuana market will likely roll out.” Bangor Daily News. June 17, 2019.  Accessed January 9, 2020.

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