Maine is a state defined by its rocky coastline, lobsters, moose, and Acadia National Park.
Now the Pine Tree State can add burgeoning legal cannabis marketplace to its notable characteristics.
Even though the state’s voters legalized recreational, or adult-use marijuana back in 2016, business licenses are only now being processed via the Office of Marijuana Policy (OMP) as the state’s legislators have grappled with numerous bills aimed at regulating its usage.
The financial benefit to the state is expected to be significant! Recreational marijuana will have an effective tax rate of 20 percent (a 10 percent weight-based excise tax and a 10 percent sales tax) under the current laws.
Sales are to begin in March, and while revenue forecasters for the state are estimating $4.4 million in the fiscal year 2020 on marijuana sales and excise taxes, marijuana industry analysts are predicting a much more considerable amount; $158 million in the first year netting Maine almost $32 million in new tax revenue!
This new business activity has caused the OMP to issue guidance to marijuana-related businesses so that they can operate within the laws as they begin to advertise medical and recreational products to their customers.
In a letter on the agency’s website, Director Erik Gundersen identified areas of consideration for Maine Medical Use Marijuana Program marketers and licensees in the Maine Adult Use Marijuana Program.
While allowing that incidental exposure to an underage audience is unavoidable, the main concern is assuring that any marketing does not target an audience under the age of 21. Gundersen wrote, “OMP’s main concern and focus of this guidance is whether advertisements have a high likelihood of reaching, or are designed to appeal to, individuals less than 21 years of age.”
The location of the marketing material will also be scrutinized. Advertisements near public or private schools or other areas frequented by under-age people are prohibited. Gundersen added, “In many instances, context is going to be critical. Permissible marketing activity could be deemed impermissible depending on the audience that is likely to encounter the advertising.”
The platform used for marketing will also be closely watched. Regarding advertising via the television, radio, print, and other mass media, Gundersen said that these ad buys “must be able to produce sufficient marketing data to demonstrate that the consumer base of the advertisement is appropriate.”
On the topic of digital or web-based marketing, Gundersen cautioned that any advertising online, “must closely consider that the statute prohibits unsolicited advertising or marketing on the internet.” Marijuana businesses that market on platforms such as Facebook and Instagram must ensure that they have age-verification technology employed to avoid advertising to an underage audience.
It is advised that marijuana-based businesses consult with an attorney to determine if their marketing practices fall within the legal parameters. For all of the uncertainty with licensing and marketing in the state, one thing is sure. For the businesses that can weather the turbulence, the opportunity for these marijuana-based businesses in Maine is immense!
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