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Maine Disclosure Requirements Burden Industry Members

Over the summer, Maine’s Bureau of Alcoholic Beverages & Lottery Operations issued clarification of its ownership disclosure requirements for new applicants and existing license or certificate holders. We understand the significant impact this has on industry members and have summarized the updated guidance below.

Like most states, Maine has a long history of requesting the ownership information for the licensed entity. Maine law 28-A M.R.S. § 651(2)(A) states that an application must contain the entire ownership or any interest in the person or establishment for which a license or certificate of approval is sought. Historically, Maine has issued licenses with disclosure of the applicant and its parent company so long as these entities or individuals met the eligibility requirements discussed in 28-A M.R.S. § 601.

However, Maine’s new enforcement of §651 now focuses on the “entire” ownership structure; it requires disclosure of every level of ownership until the entity identifies everyone with ownership interest in the business or until a public entity is listed. This requirement applies to all applicants and licensees, including holders of a certificate of approval.

This level of ownership disclosure is rare in this heavily regulated industry. It is a burden on current license or certificate holders entering their renewal period as well as on new applicants looking to begin business in the state.

McDermott’s alcohol team is working closely with the state to navigate this new requirement and to discuss legislative changes to best support both industry members and regulators while ensuring our clients are able to continue operations with license extensions. For questions or assistance with Maine’s disclosure requirements, please contact Alva Mather or the alcohol team.

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Trump Administration Indicates Plans to Increase Enforcement of Recreational Marijuana Laws

To follow up on our prediction last month that the Trump Administration may take a more aggressive stance toward the legalization of marijuana, White House Press Secretary Sean Spicer stated during the February 23 daily briefing that he anticipates greater federal enforcement of marijuana laws.  Spicer emphasized the distinction between medical marijuana (the legalization of which President Trump does not oppose) and recreational marijuana.  In discussing the latter, Spicer invoked the country’s opioid addiction crisis, suggesting a link between recreational marijuana use and such other drugs.

Spicer hinted that the Justice Department’s enforcement of federal drug laws would extend to the nine jurisdictions that have legalized recreational marijuana, potentially putting at risk the schemes many of these states have created–or are in the process of creating–to regulate marijuana.  As of today, the recreational use of marijuana is legal in Alaska, California, Colorado, the District of Columbia, Maine, Massachusetts, Nevada, Oregon and Washington.  (Note:  Congress has blocked the DC government from using funds to actually implement a system to regulate recreational marijuana, so although technically legal, there is currently no “market” for recreational marijuana in DC.)

If President Trump’s Justice Department does begin to pursue more active enforcement of marijuana laws in states that have legalized marijuana, it may meet pushback from Congress.  Just last week, four congressmen announced the formation of the Congressional Cannabis Caucus (the Caucus), a bipartisan organization seeking to change the federal government’s attitude toward legalized marijuana and, notably, to leave the legalization question to the states.  In support of this mission, earlier this month Representative Dana Rohrabacher (R-CA), a member of the Caucus, introduced a bill (HR 975) in the House that would prevent federal enforcement of the Controlled Substances Act (the Act) in states that have legalized the recreational use of marijuana.

Likely by design, the bill’s introduction occurred just a day before the confirmation of Jeff Sessions, a vocal opponent of marijuana legalization, as Attorney General.  The bill would add a new section to the Act expressly stating that the Act’s provisions concerning marijuana do not apply to persons acting in compliance with state law regarding the possession or sale of marijuana.  The bill, titled the “Respect State Marijuana Laws Act of 2017,” has been referred to the House Judiciary and Energy and Commerce Committees.

Of course, whether the bill will gain enough support to pass in Congress and survive a potential Trump veto remains to be seen.  Nevertheless, the timing of the bill’s introduction, the bipartisan support it has garnered to date (half of its current cosponsors are Republicans), and the announcement of the Caucus indicate a growing tension between Congress–including some members of President Trump’s own party–and the Administration with respect to the enforcement of federal marijuana laws.

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