Marijuana Ready to sale big in Maine

Pot legalization committee in the state of Maine has approved a 10% retail tax on marijuana for recreational use. The bill was approved late February.

Buyers will receive a 10 percent tax on their marijuana purchases. On the other hand, a 21.5 excise tax will be paid by the producers for their marijuana wholesales. The same figures will appear on the retailer’s receipts. State officials are very optimistic that the new tax regulations will see revenue from marijuana sales balanced at 20 percent, this balance will see the state of Maine rival the state of Oregon in terms of customer-friendly low marijuana taxes in the United States.

The famous bill was passed by the popular vote of 16 out of the 17 members of the legislative council. The vote passed the regulatory and licensing bill which is predicted to elevate the retail sales to 85$ million in the next year. The new law requires the applicant to have had a three-year residency proof before applying for the license, it also sets a limit of fully matured plants at a home to three per a grown adult. Businesspersons can, however, hold unlimited commercial licenses if they meet the residency requirements. Towns that run marijuana outlets businesses will be exempted from marijuana taxes.

The bill, however, is not a replacement of marijuana Legalization Act of 2016 which was passed by public popular vote. The two laws might, however, clash since the 2016 Act did not levy excise tax along with the 20% retail tax, it as well gave medical marijuana licenses but not to the residents.  The 2016 Act also allowed the adults to grow up to six mature plants per adult but the 2018 Bill cut it to three plants per adult, it also gave social club permits, drive –up and house deliveries.

According to Representative Teresa Pierce, the bill honours both the immense support indicated by the committee’s vote as well as the referendum which represents a direct voice of the people. The chairman of the committee, D-Falmouth, however, claims that the government rarely gets the regulations fully implemented because of the immense conflicting interests and that focus should be on the fact that the bill narrows to protection of the society from the natural abuse of the drug while allowing the public to enjoy its privileges of using marijuana for recreational purposes.

Rep.  Patrick Corey and R-Windham who had opposed the bill in the past confidently bowed down to the new compromise by the committee showering praises to the ‘give and take’ nature of the bill. It is still very unclear whether the bill will pass through the House considering that the Republicans are still Luke warm about the whole idea of marijuana legalization as and they are known to oppose such bills.

With the new set of tax regulations, when a cultivator sells the raw marijuana from the farm to the retailer a 21.5 percent excise tax is levied on them. The retailer, on the other hand, gets a 10 percent retail tax. The state officials are concerned that the producer will hardly walk away with any profit since the 21.5 percent excise tax is equal to the 10 percent retail tax due to the differences between processed and raw marijuana.

According to the state Department of Administration and Financial Services, marijuana revenue is expected to hit 2.7$ million by the year 2020 which is when the first sales are expected. By 2021 an estimate of 16.3$ million is in foresight as this will mark the end of the first full year of sales. These facts take into the assumption that every pound of marijuana from a cultivator will generate a 335$ excise tax revenue. It is also believed that by 2021, the Maine adults would be spending a staggering 85$ million on recreational weed annually.

The state has given themselves a three-year time limit to set things running on the ground, this means that it is not until 2020 when the new laws will be implemented. The state will take nine months to put down detailed regulations, which will wait for approval from the incoming House, an approval will be followed by issuing of licenses to the qualified persons. The market could start trading any day but the regulations and laws come first and slow.

The officials hope that the excise duty will prevent the weed produce from being hijacked by cartels and black market tycoons by identifying the initial amount of weed produced hence easily traced throughout the market. The process also prevents markets collapse in case they will be an oversupply of marijuana in the future and ensures total control of price fluctuations.

David Heidrich, the financial services department spokesman insist that the tax rate is not as big as it looks at 31.5 percent due to the difference of retail and wholesale values of cannabis. The Senate’s committee on Marijuana Legalization chairman Rodger Katz, the 20 percent tax is still consumer friendly and one of the lowest across the country and also attracts even the illegals from the black market to join in and legalize their ventures.

The Bill is expected to make a comeback after failing to meets the two-thirds majority after falling short of 17 votes. It is also expected to receive less or no criticism from LePage who vetoed it out of the House last time after approval of the legislature. Lepage had highlighted that the bill violated federal laws against marijuana and with the current wave of marijuana legalization LePage is expected to take a bow.

According to Fredette, the new bill has scrapped the part of social club licenses which had greatly faced opposition due to the risk of having high drivers causing havoc. He also stresses the importance of awarding small towns tax shares which had been omitted from the first proposal favouring only big cities.

The Republicans are however still in pursuit of a slow introduction process of marijuana into the system than the rushed process which has been initiated by the committee.

The public led by marijuana activists is totally frustrated by the time the committee is taking to finalize the process even after voting a year ago. There is not much which can be done since the stipulated legal procedures cannot be overridden.

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