Voters in Maine legalized adult-use cannabis on November 8, 2016, with the passage of the Marijuana Legalization Act, which would have regulated adult-use cannabis like alcohol. When it came time for state lawmakers to draft regulations for the program, however, significant setbacks began, chiefly due to the intervention of the state’s former Governor, Paul LePage. In November of 2017, almost exactly one year after voter approval, LePage vetoed a more conservative draft of the bill that would have regulated and taxed recreational cannabis in the state. Again, in 2018, he vetoed another version of the bill, more restrictive than the last. The legislature overturned LePage’s second veto, however, with the enactment of LD 1719, which became law on May 2, 2018. In January of 2019, LePage’s second term ended and pro-cannabis democratic governor, Janet Mills replaced him, ushering in a promising era for the state’s recreational legalization efforts. One month later, Mills created the Office of Marijuana Policy and, on June 27, 2019, signed newly proposed rules to govern Maine’s adult-use program (LD 719—An Act To Amend the Adult Use Marijuana Law). The new rules went into effect in September, with Maine’s Department of Administrative and Financial Services’ newly formed Office of Marijuana Policy finally publishing adult-use marijuana establishment applications in a staggered roll-out from Nov 4 to Dec 5, 2019.
Nearly three years after West Virginia passed the Medical Cannabis Act, bill SB 386, business license applications are finally available for the state’s medical cannabis program. The bill, which allows qualified patients to use medical cannabis upon approval from a doctor, and registering with the state health department, passed on April 19, 2017, making it the 29th state to legalize medical cannabis. However, concerns with securing banking sources for the program and its businesses, principally due to constant anti-legalization efforts led by U.S. Attorney Mike Stuart, hindered the program’s launch. It wasn’t until the legislature passed HB 2538 in March of 2019, allowing credit unions to enter the fold and providing some protections to financial institutions, that West Virginia’s medical cannabis program started to build momentum.
The Illinois adult-use cannabis market opened for business on January 1, 2020. In the first five days alone, Illinois sold more than$10.8 millionworth of adult-use flower, edibles, vape cartridges, and other cannabis products. However, dwindling adult-use supply has caused widespread shortages forcing dispensaries to close their doors to recreational consumers.The only shops currently supplying the adult-use market are previously licensed medical dispensaries that are required by law to prioritize their patients. Adult-use supply became an issue only one week into legal sales, a problem that cannabis industry experts and operators predicted months ago, especially since the number of Illinois medical patients doubled over the last year.
Illinois is poised for a robust adult-use market with a state population of 12.7 million and tourism spending at $16 billion in 2018. As sales climb to a projected$2 billion annuallywithin a few years of the program’s launch, potential business owners have much to do to meet upcoming deadlines and quickly get their businesses operational for early 2020 sales. In California, we have witnessed how even the most robust forecasts can prove unreliable if programs cannot compete with the lower pricing of the black market. This could also be a challenge for Illinois with the state planning totax purchases of cannabis products by 10% to 25% depending on the product type and THC potency. Additionally, municipalities and counties will be able to levy added local sales taxes. The law also imposes a 7% gross receipts tax on the sale of marijuana from cultivators to dispensaries, which will most likely be an expense passed onto consumers.