01/11/2021
I'm sharing the feedback that I provided to OMP on the preliminary draft Rule. Matt Dubois and I have discussed this at length, and I don't think that he will mind me saying that we both are committed to supporting caregivers in opposition to this Rule.
Here's the text of my feedback:
I am an attorney. My law practice works exclusively with medical ma*****na caregivers and adult use businesses. I form business entities, draft contracts, occasionally litigate disputes, and guide my clients to stay compliant.
I have a unique view into the Maine medical ma*****na industry. I advise my caregiver clients on how to both responsibly provide patients access to safe ma*****na and operate profitable small businesses in a highly regulated (and federally illegal) industry.
I find the draft Rule released by the Office of Ma*****na Policy this week disconcerting, disingenuous, and dangerous.
As of December 31, 2020, Maine had 3,042 registered medical ma*****na caregivers. These are small-business people who are dedicated to providing quality medicine to their patients. I see their daily struggles in keeping up with regulatory requirements; navigating a financial system that excludes them; procuring property that complies with local ordinances; losing crops just when they are ready to harvest through no fault of their own; paying a premium for everything from rents to supplies to services because of their chosen industry. I see them work 14 hour days, seven days a week. I see them paying federal income taxes on net losses because of Internal Revenue Code 280E, which disallows business expense deductions thereby creating taxable phantom income. I am in awe of their perseverance in the face of great odds.
No doubt, regulation is necessary for this industry. Most of my clients understand this, though not all like it. I tell my clients over and over that they are not in the ma*****na business; they are in the compliance business.
But this draft Rule goes too far.
The Rule’s stated purpose is “to ensure qualifying patients’ access to safe ma*****na for medical use in the State of Maine.” Yet, if implemented, this draft Rule will put a large number of caregivers out of business. The logical result will be caregivers and patients resorting to the black market. Caregivers will likely go back underground to provide quality medicine to patients at a reasonable price. Others will enter the unregulated black market to make quick money. The unintended consequence of this Rule, then, will be less safe access to less safe ma*****na and a robust unregulated black market, precisely the opposite of the Rule’s stated purpose.
While I have concerns about many elements of this draft Rule, I will highlight the most egregious.
(1) The Rule Directly Contradicts Statutory Requirements.
5 M.R.S.A. § 8052(5-A) states that an agency “shall seek to reduce any economic burdens through flexible or simplified reporting requirements” on small businesses when adopting rules. The word “shall” means “must.” The draft Rule wholly contravenes this clear statutory directive. The Rule burdens caregivers with licensing, reporting, and operating requirements nearly identical to adult use licensees’ criteria. Yet, it continues to restrain the number of ma*****na plants or size of plant canopy that caregivers can cultivate. Caregivers simply do not have the resources that adult businesses enjoy. The draft Rule does nothing more than add to caregivers’ economic burden while offering nothing in compensation.
In addition, § 8052(5-A) requires the agency to prepare an economic impact statement that includes a description of reasonable ways that are less intrusive or less costly to achieve the proposed rule’s purpose. The Rules are exceedingly invasive and costly and do nothing to ensure qualifying patients’ access to safe ma*****na for medical use in the State of Maine. Patients currently have access to safe ma*****na for medical use. The medical program is running smoothly.
(2) The Rule Exceeds the Department of Ma*****na Policy’s Authority.
Under 22 M.R.S.A. § 2422-A, the Department has the authority to administer and enforce the statutory Maine Medical Use of Ma*****na Act and the rules adopted to support the Act. “The department . . . may adopt rules as necessary to administer and enforce this chapter or amend rules previously adopted pursuant to this chapter.” (Emphasis added.)
This Rule creates law, plain and simple. It goes far beyond providing the mechanism for administering and enforcing the Act. In that regard, alone, it must never be adopted.
(3) The Rule is Unconstitutional.
I have been adjunct faculty at the University of Maine School of Law teaching ma*****na law. My class spent a great deal of time discussing that there is no constitutional right to possess, use, sell, or otherwise deal in ma*****na. I frequently have to explain to my clients that Maine’s laws and regulations do not violate their rights to privacy, speech, or whatever other rights they conjure as being violated. Therefore, I find it a bit ironic to argue that this Rule is unconstitutional. Yet, it is.
The United States Constitution prohibits any state from making any law that impairs the obligation of contracts. Except for contracts that are illegal or for illegal purposes or entered into the purpose of fraud, our citizens have the right to contract with one another.
Business entities are contractual in nature. This Rule bars caregivers from asserting their right to contract. This overreach is staggering.
I have formed hundreds of business entities for my clients. What happens to those entities? Making them dissolve will be beyond impractical and devastating to these businesses. And for what purpose? Certainly not to ensure patients access to safe ma*****na for medical use.
(4) The Rule Effects a Restraint of Trade.
This Rule has been drafted in nominal deference to protecting Maine’s medical ma*****na patients. However, its primary purpose appears to be restricting the ability of small caregivers to compete by stifling them with regulations so onerous that they cannot afford to comply. On its face, the Rule appears to have been drafted to favor Maine’s adult use ma*****na market and penalize the medical ma*****na market.
What are the political interests behind this Rule? Why does the Maine Ma*****na Advisory Commission include no caregivers or patients? How, exactly, does this achieve the stated purpose of providing safe medical ma*****na to patients?
Maine statutory law makes restraint of trade a Class C crime. (10 M.R.S.A. § 1101.) While the statute refers specifically to contracts in restraint of trade, it also refers to conspiracy with the intended purpose of restraining trade. If the drafters of this Rule were operating from a standpoint of favoring political interests, drawing a line from their actions to conspiracy would not be difficult.
Conclusion.
The 2018 Medical Use of Ma*****na Act created a market that could support caregiver small businesses. It took away the patient limits and designations, which had greatly hampered caregivers. It allowed physicians to certify patients for medical ma*****na based on the physician’s expert opinion. It allowed caregivers to open stores, and it later allowed caregivers to wholesale to one another. It has successfully created a robust cottage industry – the stuff of which Maine’s economy relies. I am incredulous that this Rule so clearly disregards the Legislature’s intent in enacting the Act.
This draft Rule goes in exactly the opposite direction of the Act. It hamstrings the medical ma*****na market to no useful purpose.
The industry needs a Rule that supports that Act. It has operated for over two years with an outdated Rule that does not match the Act. A strong Rule is necessary for the industry to function at its best. This Rule is not it.
The rule drafters must focus on providing the needed details to enforce and administer the Act, which is solid and good for the medical ma*****na industry. They must not take it upon themselves to create law, especially law that benefits the powerful and crushes the hardworking women and men in the medical ma*****na industry.
Thank you.
