Maine’s got a marijuana crisis, as in too much of it. The price has collapsed. Combined with the rising cost of electricity, growers can’t afford to operate. The result is a mass exodus of “individuals registered with the state to supply medical-use marijuana for patients.”
Rather than just letting folks find the weed they need, weed needs some guardrails; at least, that’s what some folks are saying.
“This survey makes clear that the biggest issue facing the medical program is oversupply,” said John Hudak, director of the Office of Cannabis Policy, in a statement. “That oversupply has led to massive drops in wholesale price, making it difficult for registrants to endure mounting energy costs and other market conditions.” …
The report also identifies high utility and business costs, competition with the adult-use market, and banking regulations and fees as drivers of the drop-off. Banking is difficult for many cannabis businesses because the drug is still illegal at the federal level.
But it’s not just the Feds.
“Every single year we deal with some existential threat to our ability to operate from our own state government,” he said, adding that people are “discouraged and disenchanted.”
The Office of Cannabis Policy (OCP) blames the legislature. Some growers/Caregivers oppose some the OCP says is needs doing to correct a supply problem that is also infecting the adult cannabis market. Between competition and supply, the price has gotten so low that growers can’t afford to grow (or so some say).
But it seems to me that deregulation is the fix to everyone’s problem. Less interference, not more. Marijuana entrepreneurs will find ways to profit in a legal market without any state interference, but here comes Maine to do some interfering.
The Legislature is considering two bills that could prevent more small businesses from leaving the market. One would give the state the authority to temporarily stop issuing new adult-use cultivation licenses or allowing expansions if the average price falls 20% below the previous year’s average, or if the volume grown over three months is three times greater than the previous year’s. The second piece of legislation would effectively reduce the maximum size of a newly licensed medical- or adult-use grow operation to 7,000 square feet.
More regulations will likely lead to lobbyists protecting a government-managed cartel. Small business caregivers or growers will get wiped out. Private growing will be prohibited, or if it’s not legal, never get there from here. Instead of cheap heaps of inventory, you’ll get supply chain controls to keep prices high and, for some who may genuinely need it, out of reach.
But Maine has no incentive to support low prices. It collects a 5.5% tax on medical marijuana, a 10% tax on recreational (adult use), while,
Cultivators will pay a $335 per pound excise tax on flowers and mature plants and a $94 per pound tax on trim. Immature plants and seedlings will also be taxed at the rate of $1.50. Seeds will incur a 30 cent per seed excise tax. All must be paid monthly.
The State takes in a respectable haul. $12M – $14M per year in medical and recreational marijuana tax revenue. And while 12% of all Maine Marijuana tax revenue goes to the “Adult Use Marijuana Public Health and Safety Fund,” the other 88% goes to the General Fund.
I love that. We’ll permit you to do something you might do better without our consent, we’ll call it legal at the state level, regulate it, tax it, and then use a percentage of that to tell you about the health and safety risks of the thing we’re taxing.
How about an educational program regarding the health and safety risks of government meddling and taxation? Anyone?
And we’ve arrived at my primary objection to state regulation and taxation. The state has a financial interest, as do the large growers who will hire lobbyists to help manage everyone else out of business and then build a cartel with the state. This will drive up prices but also drive away competition with increasingly burdensome licensing and other rules that add costs.
Marijuana has issues we should not ignore that I have address elsewher, but the progressive state’s addiction to revenue can’t be ignored, and Maine is getting bluer by the minute.
