AUGUSTA — Retail sales of marijuana may still be a year away, but cannabis-related cash is already flowing at the Maine State House as businesses jockey to influence the policies that will govern the lucrative recreational market.
Between Dec. 1 and March 31, clients paid lobbyists more than $140,000 for representation on marijuana-related issues in Augusta even though lawmakers have only taken up a handful of the roughly 50 bills connected to the drug.
In fact, two medical marijuana dispensaries and a group called Maine Professionals for Regulating Marijuana were ranked in the Top 10 in dollars spent, along with companies from other industries known for hefty spending on lobbying: banks, casinos, utilities and tobacco.
But observers say it’s no surprise that businesses and interest groups are hiring lawyers and consultants adept at navigating the State House hallways, given predictions that sales of legal marijuana could surpass $200 million within three years.
“It strikes me that we are building a regulatory structure from the ground up so people were very concerned about how it gets done,” said Rep. Erik Jorgensen, D-Portland, a frequent target of lobbying as one of 17 members of the Legislature’s Marijuana Legalization Implementation Committee. “I do think when you are starting a whole new industry, you expect to see that.”
LOBBYISTS PACK REGULATION TALKS
Last fall’s referendum to legalize marijuana for adults age 21 and over was only the first step in the process. Now lawmakers and state officials must craft the licensing, regulatory and enforcement infrastructure for retail marijuana sales to begin in Maine sometime next year. And those proceedings have generated plenty of interest.
The twice-weekly meetings of the Marijuana Legalization Implementation Committee are often filled with attorneys from many of Maine’s largest law firms as well as paid consultants and people with vested interests in the marijuana industry.
At least a dozen groups or businesses have hired lobbyists to represent them on marijuana issues in the Legislature, according to documents filed with the Maine Commission on Governmental Ethics and Election Practices. That may represent a partial listing, however, because the current reports only cover expenditures through March 31 and because of limitations in searching the ethics commission database.
They include medical marijuana dispensaries and caregivers, a cannabis intellectual-property company called Narrow Gauge Holdings, a California-based pharmaceutical firm, Greenwich Biosciences, that produces “cannabinoid therapeutics,” as well as two of the organizations behind last year’s referendum, Legalize Maine and Campaign to Regulate Marijuana Like Alcohol.
Clients spent more than $2 million lobbying the Maine Legislature between December and March 31. So the $142,141 spent on marijuana-related lobbying – out of the hundreds of issues under consideration by lawmakers – represents a substantial chunk of that total. And spending on lobbyists will only grow as the committee continues its work through next year.
It is too early to say where marijuana lobbying will rank compared with other issues, although it’s not unprecedented for single issues to rack up six-figure lobbying expenditures. During last year’s debate over a contentious solar energy bill, for instance, more than two dozen companies and organizations lobbied lawmakers. Two national solar energy companies, SunRun and Solar City, spent more than $47,000 alone on lobbying.
And in 2015, the New Brunswick company J.D. Irving and its subsidiary spent more than $100,000 lobbying for passage of a bill to revamp Maine’s mining laws.
DISPENSARIES AMONG BIG SPENDERS
Two of the biggest spenders as of March 31 – the last date for which financial disclosures have been filed – were dispensaries that grow and supply medical marijuana to patients but are hoping to carve out a piece of the recreational market as well.
Wellness Connection of Maine, which operates four of the state’s eight licensed dispensaries, had paid Dan Walker $23,250 for lobbying in the Legislature. A veteran of medical marijuana policy issues in Maine, Walker also had four lobbyist associates listed as working with him on the account. Remedy Compassion, an Auburn-based dispensary, has paid Edward Roy Dugay for representation in Augusta.
Patricia Rosi, CEO of Wellness Connection of Maine, said her organization is involved in the policymaking process because it feels “a responsibility to the thousands of people we serve every day.” But Wellness Connection is also looking ahead to the recreational market, Rosi said, because dispensaries are already well-positioned in terms of regulatory oversight, quality control and a proven track record of paying taxes on their products.
“Yes, we are here every week and lobbying is a priority because our voices must be heard,” said Rosi. “All of us dispensaries have a vested interest in participating” in the discussions.
TOP-SPENDING LOBBYIST IS . . .
The two dispensary companies are also members of another group, Maine Professionals for Regulating Marijuana, that had wracked up the largest lobbying bill – $54,338 – as of March 31. The recipient of that money, Toby McGrath, a consultant who leads the government relations and campaigns practice group at the law firm Drummond Woodsum.
Maine Professionals for Regulating Marijuana bills itself as a broad coalition of interests – including financial institutions and advisers, attorneys, real estate agents, land use planners and marijuana dispensaries – “who advocate for quality, safety and transparency in the marijuana industry in Maine.” The group has yet to release a full list of board of directors or disclose its donors, who attorney Hannah King said prefer to remain confidential because of the continuing stigma attached to marijuana.
That secrecy has fueled rumors, however, that Maine Professionals for Regulating Marijuana is a front group for the dispensaries. But King said the dispensaries are “only part of the organization” made up of a broader group of professionals.
“Everyone has the same goal of a professional industry that is well-regulated … and safety, quality and transparency in the industry,” King said.
GETTING IN ON THE ‘EARLY SALES’
Dispensary operators are lobbying heavily for the exclusive right to sell recreational marijuana and cannabis products later this year before licensing of retail stores begins in February, providing adults an alternative to the black market. Such an “early sales” program – similar to limited-licensing periods rolled out in other legalization states – would give dispensaries a lucrative toehold into a newly legal economy that the cannabis research firm ArcView Market Research estimated would be worth $220 million in Maine by 2020.
But the dispensaries’ political gambit and their heavy lobbying presence are escalating longstanding tensions among the companies and the other smaller but much more numerous players in the medical marijuana industry: the caregivers. While the “early sales” legislation would allow caregivers to sell marijuana to dispensaries, caregivers could not sell directly to recreational users.
“It’s interesting that people who had no interest in our campaign and, in some cases, didn’t support legalization are now so interested in getting some of these licenses,” said Paul McCarrier, a lobbyist with Legalize Maine, one of the organizations behind Question 1 on last November’s ballot.
McCarrier, a registered lobbyist who has been paid $15,000 by Legalize Maine through March, accuses dispensaries of trying to set the regulatory bar so high that it would “stifle the competition and keep the little guy out.” In turn, that would undercut the small-business job-creation potential of Maine’s new legal cannabis industry.
“When you have one business employing 100 people, there’s no competition,” McCarrier said. “When you have three businesses employing 33 people each, you have a lot more competition.”
BIG MONEY, SOPHISTICATED EFFORTS
Maine is by no means unusual in seeing a still-small but professional and well-funded cannabis lobbying niche. In Colorado, groups on both sides of the cannabis debate spent more than $330,000 lobbying the state legislature in 2013, the year after voters there legalized marijuana, according to the Denver Post.
The Marijuana Policy Project, a national organization that has worked on legalization campaigns in Maine and across the country, has spent more than $1.1 million on federal lobbying since 2004, according to the Center for Responsive Politics, a campaign finance watchdog group.
Gone are the days – if they ever existed – when a cannabis “entrepreneur” resembled the stereotypical, long-haired hippie often portrayed by Hollywood.
Today, the entire legal cannabis industry – both medical and recreational – is estimated by ArcView Market Research to be worth $7 billion and has the potential to triple in the next several years, even though marijuana remains illegal under federal law.
PRESSURING FEDERAL GOVERNMENT
Later this month, 300 people involved in the marijuana industry are expected to gather in Washington, D.C., for “Cannabis Industry Lobby Days,” a two-day event of intensive lobbying of members of Congress and federal officials. The event is organized by the National Cannabis Industry Association, a group whose membership has quadrupled to 1,200 members in the span of three years.
Taylor West, deputy director of the National Cannabis Industry Association, said legal marijuana is a “highly, highly regulated industry” at the state and local level, so it makes sense for businesses to be involved in those policy discussions.
“The amount of money needed to enter the industry, open a business, has grown substantially,” said West, who is based in Colorado. “It is an industry that now requires a huge amount of work, a huge amount of business smarts and, in many cases, a substantial financial foundation to get started.”
The Maine Legislature’s Marijuana Legalization Implementation Committee is expected to meet throughout the summer and into the fall or winter, reviewing the experiences of other legalization states and poring through nearly 50 cannabis-related bills. The committee plans to present next year’s Legislature with a lengthy list of recommendations on regulations, licensing and law enforcement before the opening of retail stores.
ASSESSING THE ARGUMENTS
Asked about the lobbying on cannabis, a committee member, Rep. Patrick Corey, R-Windham, said it wasn’t markedly different from the professional lobbying he sees as a member of the Criminal Justice and Public Safety Committee.
But standing outside the marijuana committee, he added: “There is a lot of money in that room.”
Jorgensen, the Portland lawmaker who also serves on the committee, said he wouldn’t say the marijuana lobby “is a good thing or a bad thing,” it’s just the reality surrounding a new industry. But as a part-time, citizen Legislature, lawmakers depend on professionals and subject-matter experts to help educate them about the issues.
“You have to figure out where people are coming from and try to see if a grain of salt is needed,” Jorgensen said. “And if you do that, you can benefit from the information that is provided.”
Kevin Miller can be contacted at 791-6312 or at:
Twitter: KevinMillerPPH
Correction: This story was updated at 11:03 a.m., May 8, 2017, to reflect that Toby McGrath is a consultant who leads the government relations and campaigns practice group at the law firm Drummond Woodsum. He is not an attorney.
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