How to Open a Dispensary in Maine

How to Open a Dispensary in Maine in 2024

To open a cannabis dispensary in Maine, you must obtain a marijuana store license from the Office of Cannabis Policy. The OCP established a three-step process for marijuana dispensary license applications, which also involves getting local authorization from the municipality where you intend to set up the dispensary. Unlike some other states, Maine does not have a Social Equity Program for cannabis business applications.

Why Open a Dispensary in Maine?

The cannabis market in Maine is a rapidly growing sector, especially with more municipalities permitting the establishment of adult-use cannabis dispensaries within their borders. Retail cannabis sales in 2021 totaled over $81 million in 2021 as reported by the Maine Office of Cannabis Policy. In 2022, the figure climbed up to $158 million. As of August 2023, the OCP has recorded more than $140 million in cannabis sales. Per an OCP report, more than $17 million was generated by the state in sales tax, and 44% of new marijuana license applications received were for dispensaries.

There is also a rising demand for medical cannabis in the state, according to the data obtained from the Maine medical marijuana program. The number of registered dispensaries in the state increased from 13 in 2021 to 35 in 2022, a 169% increase. Also, in 2022, 106,164 medical marijuana patient certifications were printed, representing a small but significant uptick from the 2021 figure.

Types of Dispensary Licenses in Maine

The Office of Cannabis Policy (OCP) in Maine issues only one type of retail license. To open a dispensary in the state, you must apply for a marijuana store license. The marijuana store license authorizes the licensee to purchase marijuana from a marijuana cultivation facility or product manufacturing facility and sell it to consumers.

How to Get a Maine Dispensary License

Before applying for a marijuana store license in Maine, you must fulfill certain eligibility conditions, such as:

• Age: You must be 21 or older. Every director, manager, general partner, or officer of a business entity must be 21 or older
• Residency: You must be a permanent resident of Maine. If you are applying as a business entity:
• Every director, manager, general partner, and officer must be a Maine resident
• A majority of the business' shares, partnership interests, membership interests, or equity ownership internships must be held or owned by residents or business owners whose owners are Maine residents
• Incorporation and FEIN: If you are applying as a business entity, your business must be incorporated in Maine or formed or organized under the laws of the state. Therefore, you must register with the Maine Department of the Secretary of State before starting the application process. Also, the entity must have a Federal Employer Identification Number (FEIN)
• Disqualifying drug offense: You must not have been previously convicted of a disqualifying drug crime
• License revocation: You must not have had a license previously issued under Maine's legislation revoked
• State employment: You must not be employed by any state agency with regulatory authority. Also, you may not be a corrections officer or a law enforcement officer
• Court Debts: You must not have an outstanding court-ordered payment

As required by the Maine Office of Cannabis Policy, you must go through the following steps to obtain a marijuana store license in the state:

• Conditional Licensure: You must schedule an appointment with IdentoGO for a criminal history records check. Fingerprints are taken in approved locations in Farmington, Machias, Belfast, Auburn, Springvale, Presque Isle, Brewer, Augusta, South Portland, and Winslow. If you are applying as a business entity, every officer, general partner, manager, and director must undergo the criminal history records check

Also, you and every employee in the marijuana business must obtain an OCP-issued IIC (Individual Identification Card). Hence, a completed IIC application and the corresponding release of information are required. The IIC is not required to be issued before initiating your application, provided it has been applied for. Note that every officer, general partner, manager, and director requires an IIC if you are applying as a business entity.

Complete and submit the application for a condition marijuana license and pay the required fees. Forms completed via the Maine OCP online licensing portal are usually processed faster

A non-renewable conditional license valid for 12 months will be issued within 90 days of the OCP determining that all application forms, supporting documentation, and criminal history records checks submitted are complete

• Local Authorization: OCP rules require marijuana dispensary license applicants who have been issued conditional licenses to obtain authorization from their municipal governments before their licenses can become active. Municipalities are allowed 90 days (and a further 90 days in some instances) to respond to your application for municipal authorization.

The local authorization request will be approved if your municipal authority determines that you have satisfied all local regulations and licensing conditions. The municipal authority will send an approved authorization form directly to the Office of Cannabis Policy

Typically, the OCP will request supplemental information and updated information from you within 10 days of receiving an approved local authorization form

• Active Licensure: The OCP will send you an invoice for the licensing fee upon providing all the required information and documents. The licensing fee can only be paid with a money order or bank check. Once the OCP receives your payment, you will be issued an active license valid for 12 months

Information and Documents Required for a Dispensary License in Maine

The following documents are required when applying for a Maine marijuana store license

• Maine cannabis establishment Release of Information Form
• Principal Attestation Form for every officer, general partner, manager, and director listed
• Maine Revenue Services Form – Authorization to Review and Disclose Status of Tax and Filing Obligations to the Maine Office of Cannabis Policy – for every officer, general partner, manager, and director
• Business ownership documents, if applicable
• ESOP (Employee Stock Ownership Program) agreement, if applicable
• Financial Instruments, if applicable

The following will be required after obtaining a conditional license and the OCP has received the local authorization form:

• Proof of compliance with all applicable electrical inspections and permitting criteria
• Facility Plan
• Premises lease, if you do not own the premises
• Sales Tax Identification Number
• Proof of registration with tracking system
• Any modifications to the initial application

What Plans Do You Need to Open a Dispensary in Maine?

Preparing a solid business plan is crucial in a competitive industry such as the cannabis sector in Maine. A well-written business plan increases your chances of securing funds for your business and shows that you know the cannabis landscape in Maine. Your business plan must include sections such as an executive summary, business description, market analysis, operational plan, management strategy, financial analysis, and marketing plan.

The Office of Cannabis Policy in Maine also requires marijuana store license applicants to submit a dispensary facility plan. A facility plan must show a layout of the licensed premises, including fences, limited access areas, display areas, waste disposal areas, points of entry, windows, and doors, alarm control sensors and panels, surveillance measures, and legal ingress onto the property from the closest maintained public way. Some municipalities, such as Auburn, may also require an operational plan. The OCP provides a template on its website for license applicants to prepare their facility plans.

Are There Municipal Requirements for Opening a Cannabis Dispensary in Maine?

Maine laws allow municipalities to opt out of permitting dispensaries from locating within their borders. Therefore, you must research the local laws where you plan to set up a marijuana dispensary before commencing an application process.

Also, additional licensing requirements are often required in municipalities where dispensaries are allowed to be established. Usually, you will be required to obtain a local business license or permit before setting up a dispensary. You may also need to obtain a building permit, electrical permit, plumbing permit, and sign permit. If your dispensary intends to sell cannabis edibles, the municipal authority may require a food service establishment license.

How Long Does It Take to Get a Maine Dispensary License?

The entire process from conditional to active licensure may take several months, especially as you must obtain local authorization. However, once the Maine Office of Cannabis Policy receives payment for the licensing fee, your active marijuana store license will typically be issued within 2 weeks.

Where Can You Locate a Cannabis Dispensary in Maine?

Maine municipalities have specific rules for where a marijuana store may be located within their jurisdiction. They have varying requirements for dispensaries in relation to their operation hours, zoning districts, and distance buffers from schools, religious places, and other public locations. While the state stipulates that a dispensary may not be located within 500 feet of the property line of a preexisting school, it allows municipalities to impose distance buffers to specific locations. You should contact local authorities in the area where you plan to set up a cannabis store for specific location requirements before applying for a dispensary license.

Here is a list of cannabis dispensaries in Maine.

Can Licensees Have More Than One Dispensary Location in Maine?

Yes. Provided a separate marijuana store license is obtained from the Maine Office of Cannabis Policy, you can operate more than one dispensary location in Maine.

How Much Does It Cost to Open a Marijuana Dispensary in Maine?

The following are the costs associated with setting up a dispensary in Maine:

• Application fee: $500
• License Fee: $5,000
• Startup Costs: $1,000 - $40,000
• Taxes: 10% sales tax

Do You Need an Insurance Policy for a Cannabis Dispensary in Maine?

Although there are no specific insurance policies required for cannabis dispensaries in Maine, it is recommended that you have insurance policies in place to keep your business afloat in adverse situations. Per Maine commercial business laws, some of the recommended insurance policies for dispensaries are:

• General Liability Insurance: This policy covers property damage and bodily injuries accidentally caused to others (excluding your employees). It covers your legal defense, judgments, and settlements if you are sued due to an accident
• Product Liability Insurance: This provides legal cover and pays settlement awards up to the policy limits for persons with genuine claims of sustained damages due to the use of a product purchased from your store
• Worker's Compensation Insurance: Workers compensation insurance covers payment for your employees' lost wages, disability benefits, medical bills, and other expenses if they become ill or injured while performing work-related duties

How to Get a Grant to Open a Dispensary in Maine

Cannabis dispensaries in Maine face challenges in obtaining loans from traditional banks. This is because cannabis is still classified as a Schedule I controlled substance under federal law, even though it is fully legal in Maine. As a result, banks and credit card businesses are reluctant to work with cannabis businesses, including dispensaries, fearing federal prosecution.

This can be a significant obstacle for cannabis entrepreneurs, who often need access to capital to start and grow their businesses. However, there are a number of alternative financing options available to cannabis businesses, such as:

• Self-funding: This involves using your own money to finance your business. However, it may be difficult to raise enough money on your own
• Equity funding: This involves selling shares of your business to investors in exchange for money
• Applying for a loan from a credit union: This involves borrowing money from a lender, such as a credit union, and agreeing to repay it with interest. This may be a good option if you have good credit and a solid business plan
• Crowdfunding: This involves raising money from many people, typically through an online platform. This may be a good option if you have a strong support network and a compelling business idea
• Borrowing money from family and friends: This can be a good option for dispensaries that have owners with a strong support network who are comfortable asking for financial assistance from their loved ones
• Working with a cannabis-specific broker or lender: Cannabis-specific brokers and lenders have experience working with cannabis businesses and can help dispensaries find the best financing option for their needs

Does Maine Have a Social Equity Program for Cannabis Dispensaries?

No, Maine does not have a social equity program for cannabis dispensaries.

Does Maine Tax Marijuana Dispensaries?

Adult-use cannabis dispensaries are required to charge 10% sales tax on sales made to buyers. Medical marijuana purchases attract a 5.5% tax, while purchases of medical marijuana edibles include an 8% sales tax instead of 5%. Municipalities are also permitted to establish local taxes. For example, the City of Portland established a 3% tax on adult-use cannabis sales. Revenue from the local sales tax is allocated to public safety investments, drug and alcohol treatments, and support for neighborhood small businesses. All taxes are collected from the customer at the point of sale. The Maine Revenue Service - a bureau of the Maine Department of Administrative and Financial Services (DAFS), collects state sales taxes on cannabis sales in Maine.