Maine Marijuana Industry Updates
They say patience is a virtue, but, understandably, it’s been in short supply for businesses in the Maine marijuana industry awaiting the highly-anticipated launch of adult-use recreational sales. Namely, businesses that made costly moves ahead of an earlier-anticipated launch are feeling the strain. State issues, lawsuits, local and municipality matters, and the coronavirus crisis have all contributed to the delay in launching recreational sales. But the good news for some is, whether characterized by virtue or nail-biting frenzy, the wait is over. The first active licenses were issued to adult-use establishments on Tuesday, September 8th, and recreational sales began on Friday, October 9th.
Maine’s Office of Marijuana Policy (OMP) posted preliminary data on Twitter, which will be reviewed and adjusted once October’s sales tax returns are submitted, showing more than 6,400 transactions from October 9th to October 12th, resulting in total sales of more than a quarter of million dollars.
This doesn’t mean the wait for everyone is entirely over, however. To date, the OMP has issued 22 active licenses, including 8 for cultivation, 4 for products manufacturing, 9 for stores, and 1 for a testing facility. But this still leaves over 100 cultivation facilities, over 40 products manufacturing facilities, over 130 stores, and 2 testing facilities in various pending or conditional phases of licensing.
Activity is expected to pick up, however. According to the OMP’s September 8th press release, “OMP will continue to accept and process adult-use applications and intends to issue future active licenses on a rolling basis, increasing the number of establishments authorized to conduct retail sales next month.”
Taxpayer Considerations & Resources
As the industry continues to evolve, new and changing tax laws and regulatory guidelines are being issued quite frequently. I encourage clients to visit the OMP Guidance Documents Center, as well as the MRS Business Guide for Sales, Use, and Service Provider Tax.
The IRS recently published a Marijuana Industry Web Page containing resources for marijuana-related entities, covering compliance matters and tax topics, such as cash payments for taxes due, business tax deductions.
The Maine Department of Administrative and Financial Services has also issued an emergency major substantive rule, effective for up to one year, related to excise taxes on marijuana plants, flower, and trim, which has established a 75% conversion rate for wet weight to dry weight.
There’s a lot of industry information to digest, and understanding how these laws and regulations affect your business is no easy feat. Professional guidance from business advisors who know your industry is an invaluable tool for cannabis-related business owners.
Contact BCS
BCS provides specialized tax planning and compliance services to several cannabis-related businesses across Maine and Massachusetts, and we partner with attorneys and consultants to provide bookkeeping and industry-specialized advisory services. Whether your trade involves cultivating, processing, distributing, or retailing cannabis products, I’m here to help. Contact me today to get started.
by Karla Brannen, CPA
Karla Brannen founded Brannen CPA Services PLLC in 2020. Prior to starting her own firm, she worked for a prominent accounting firm in Portland, Maine, as a Senior Tax Manager.
Karla is a discerning provider of tax planning and compliance services, including services bearing multi-state intricacies. Her panoramic approach to bookkeeping and CFO services enables her to address multi-faceted and unique client needs. Karla works extensively with individuals, their trusts and estates, and small businesses, and she provides tax filing services for employee benefit plans.