Last November, Maine was 1 of 4 states that voted to legalize recreational marijuana. Since then, officials have been discussing the best ways to proceed with the industry, including deciding on taxes and where the revenue will ultimately go. Legislation has undergone several meetings on the subject as well as run a variety of ad hoc votes on several aspects of the program. As they press forward, a better idea of the industry is surfacing. This clarity can’t come quickly enough since they only have until September this year to make their decisions.
Approaching an End on Tax Disputes
The issue of taxes are close to being resolved. Voters agreed to a 10 percent tax on cannabis sales. However, officials are currently talking about bringing this number up to 20 percent with 5 percent going to towns that are hosting growers and retailers. This is the same tax rate being put forward by Massachusetts. Eventually, the idea with the 20 percent sales tax is that the industry could start bringing in $29 million a year once the industry is in full swing. “A 20 percent tax rate is low enough to compete with the illicit market and it keeps us competitive with Massachusetts,” said David Boyer of Maine Marijuana Policy Project. “Municipalities should get a share of the tax revenue that comes with regulating legal marijuana businesses.”
The Reasoning Behind a Higher Cannabis Tax
Maine officials are aiming to get a tax rate high enough to make a significant contribution to the Maine economy but not so high that it pushes buyers back into the black market. A 20 percent tax on recreational cannabis is estimated to generate a minimum of $21 million in the first year alone, plus an extra $1.5 million from medical marijuana sales. Officials are still deciding on where the money generated from the recreational cannabis industry should go. As of now the main focus is on putting that revenue into public health.
Details of Maine Cannabis Legalization
In order to be a grower or retailer, residents need to have been living in Maine for at least 6 months. This law is there to prevent out of town companies from coming in and monopolizing the industry. Another interesting law that is a win for Maine cultivators, is that the cap on growing has been removed. Once the industry is open for business, adults over the age of 21 will be allowed to possess up to 2.5 ounces of marijuana for personal use. For employees, the news is also good. No employer is allowed to fire someone on the basis of their marijuana use unless the employee is behaving in an impaired way and it is affecting work performance. This means that those who use the plant in their own time are protected from drug tests and general discrimination.
Maine was joined by Massachusetts, California and Nevada last November in choosing to legalize recreational marijuana. 8 states and Washington D.C. have now ended prohibition with many more in talks of joining. The states with a newly legalized market are expected to have their industries up and running by 2018.