It's official- recreational use of marijuana in Maine is now legal. There are a number of caveats to be aware of though. Despite the passing of the referendum by majority vote the state has put a one year moratorium on the retail sale of marijuana until February 2018. This is allowing time for state and municipal agencies to craft and implement rules for the industry, and subsequently helping local Maine growers and entrepreneurs by allowing time to set their businesses up. Individuals may possess up to 2.5 ounces at any time and may consume (whether smoking, eating, or otherwise) it only in private. State-licensed marijuana social clubs will be able to operate starting February 2018 allowing people to congregate in a social setting.
According to a number of growers that I have spoken to during the course of them seeking insurance as they scale-up their growing operations, many are happy with the moratorium. There is a general sense that large, out-of-state, corporate entities would come in and dominate the market squeezing out the relatively small local growers since they have the financial backing and expertise currently in place in other states. This is allowing time for Maine growers and entrepreneurs to study the market in depth, learn the costs associated with large scale operations and put together business plans that allow for investment and a strong market position as the moratorium is lifted.
As we walk many new clients through the process of insurance in an industry that is new to the state, there is a lot that goes into it that home-grown medical growers did not need to worry about. As the industry scales up to retail sales there is more liability exposure that growers need to be aware of; more product is getting into more hands, there will be more people employed by growers, distributors, and retailers, more overall value in product that could suffer from disease or other loss, and large growing facilities that house more value in equipment- all on a scale that could be catastrophic to a business if they were to be uninsured.
As mentioned in a July 14th post (https://www.batchelderbros.com/blog/2016/7/13/medical-marijuana-insurance), marijuana is still illegal at a federal level making it difficult to work with financial institutions. Although most national banks and insurance companies will not loan or insure marijuana facilities there are a number of financial institutions that will work with marijuana growers and retailers. We represent an insurance company that works exclusively within the marijuana industry. So if you have any questions or concerns about insuring your marijuana growing or retails operations, regardless of how big or small, please give us a call.