In November, voters could make Maine the next state to legalize the recreational use of marijuana. Already, four states and the District of Columbia allow residents to buy and use marijuana. At least eight other states — plus Maine — could join them after the election.
What does this mean for municipalities across the state? Under the referendum, municipalities are free to regulate the industry as they see fit. That includes banning marijuana sales and limiting the number of marijuana businesses within their boundaries.
This is a conversation that has started in Bangor, where the City Council is weighing restrictions on the sale and use of the drug. Among the policies the city could adopt are an outright ban of marijuana sales, allowing businesses to open only in industrial zones and an ordinance to regulate “objectionable odors” from marijuana.
A win at the ballot box for the marijuana referendum won’t end the debate over the status of the drug in Maine as local government consider such restrictions.
Bangor isn’t without models for local marijuana regulations. In Colorado, where marijuana sales have been legal since 2014, most municipalities have exercised authority to regulate in different ways how the industry operates at the local level.
There are key differences, though, between the Centennial State’s and Pine Tree State’s experiences. Not all municipalities have opened their doors to the marijuana industry, but those that have were motivated to give it room to grow because taxes on marijuana sales are a lucrative revenue stream. Maine municipalities, however, are barred from levying local option sales taxes, so those greenbacks from marijuana sales won’t directly benefit those that welcome the industry.
A majority of municipalities in Colorado have said no to retail marijuana. In 2012, 55 percent of Colorado voters approved the passage of Amendment 64, creating a constitutional right to use and grow marijuana. The next year, voters also overwhelmingly supported another amendment to set statewide 10 percent sale and 15 percent excise taxes on marijuana.
Despite approval at the ballot box, municipalities across Colorado were less eager to embrace legal marijuana. Amendment 64 left it up to individual municipalities to decide whether to let the marijuana industry take root.
This has created pockets of marijuana-friendly communities surrounding by others that have remained completely marijuana-free. Of the 271 municipalities in Colorado, 168 have outright prohibited the sale and cultivation of retail marijuana, with another eight that have moratoriums in place, according to the Colorado Municipal League.
Kevin Brommer, deputy director of the Colorado Municipal League, said officials at the local level passed measures to prohibit retail marijuana sales as a response to anxiety that it could increase in drug use among school-age children as well as fuel crime in areas adjacent to marijuana shops.
After two years, the most dire predictions about legalization haven’t come to pass. One in five Colorado teens reportedly used marijuana in the last 30 days, according to a report issued by the state Department of Health, which is virtually unchanged since the first buds of legal marijuana were sold in January 2014.
Meanwhile, preliminary data show crime hasn’t increased significantly since legalization, according to an analysis from the Colorado Department of Public Safety. Legalization hasn’t crashed the black market for marijuana, with traffickers now shipping marijuana from Colorado to other states, according to the Rocky Mountain High Intensity Drug Trafficking Area.
What’s certain is that marijuana is a booming business in Colorado. Marijuana sales nearly topped $1 billion last year, generating $135 million in state taxes and fees. Colorado allows local governments to assess their own taxes on the sale of marijuana products.
Manitou Springs, a small town to the west of Colorado Springs, is the only town within El Paso County to permit marijuana businesses. Business has been good for the town’s two marijuana shops, with local sales tax revenue climbing from $2.3 million in 2014 to about $3.8 million in 2015, growth that city officials attributed to “the strong performance of the recreational marijuana sector.”
“Other municipalities and businesses enjoy the benefits of someone else’s decision to opt out,” Brommer said.
That potential revenue has been incentive enough for municipalities to reverse course on banning marijuana sales. Just last month, the city of Thornton opened its doors to the marijuana industry after seeing that residents were going to nearby Northglenn to buy pot when it could keep that spending local, according to Tyler Henson, president of the Colorado Cannabis Chamber of Commerce.
The city estimates it will annually collect between $1.5 million and $2.5 million in revenue from a 5 percent local sales tax. The marijuana industry has seen doors open in a handful of other communities across the state, including Federal Heights, Crestone and Parachute.
“As cities and towns become comfortable with it and they see the sky hasn’t fallen in, more are opening up to,” Henson said. “They’re seeing that it works.”
Even where marijuana shops are allowed, city officials have set caps on the number of businesses that can set up shop. Right now, Colorado has licensed 450 retail marijuana shops, not including cultivation sites, manufacturing facilities and testing locations. Nearly 200 of these shops are located within Denver.
With most cities prohibiting marijuana shops, this has led to a saturation in certain markets, particularly Denver. Amid concerns about marijuana shops being opened largely in the city’s poorer neighborhoods, the Denver City Council approved new caps on marijuana shops in the most saturated neighbors, along with a new licensing system to disperse the businesses more evenly across the city.
Elsewhere, city officials have taken a more proactive stance to limit the number of marijuana shops that pop up. The city of Aurora, a Denver neighbor, adopted a brief moratorium on retail shops in 2014 to give it time to create a regulatory scheme, Julie Patterson, a spokeswoman for the city, said.
The city capped the number of marijuana shops at 24, with them spread out evenly among the city’s six wards. There is no limit to the number of cultivation, manufacturing and testing facilities. So far, 23 licenses have been awarded, though only 18 of those shops have opened, Patterson said.
Besides capping the number of shops, the city adopted an ordinance targeting odors from marijuana businesses and an innovative process for picking which marijuana shops can access its lucrative market. Licenses are awarded on a competitive point-based system that favors owners who are experienced in the marijuana industry and have a clean criminal record.
Even with its limited number of shops, marijuana has proved lucrative for the city, which has taken in roughly $8 million from a 5 percent local sales tax on it, according to Patterson. Much of that money has been earmarked to fund transportation infrastructure projects, bonds for a recreation center and initiatives to address homelessness.
But the calculus for permitting marijuana sales will be different for Maine municipalities. Maine is one of 12 states that bar municipalities from levying local option sales taxes, so marijuana isn’t likely to generate a direct windfall for them. That revenue will be deposited directly into the state’s general fund.
The calculus for Maine municipalities will likely pivot on issues of public health and public safety, but as the Colorado experiment has shown, legalization hasn’t caused a spike in crime or drug use among the youth. With only two years of data, it’s too soon to draw conclusions on the potential effects of legalization.
For a state that, much like Maine, prides itself on the strength on its home rule, the local option granted under Amendment 64 has been part of the successful rollout of marijuana legalization, Brommer, of the Colorado Municipal League, said.
“When it gets down to it, it’s a very local discussion and local decision,” he said.