An Act To Dedicate a Portion of the Tax on the Sale of Marijuana to Substance Abuse Prevention and Treatment, Law Enforcement Costs and Regulatory Oversight Reference to the Joint Select Committee on Marijuana Legalization Implementation suggested and ordered printed.
Maine Legislature, Session 128, LD 1431
Committee: Marijuana Legalization Implementation
Sponsors: CRAIG, ALLEY, TUELL
Amends: 5 MRSA §20067, 5 MRSA §20068, 36 MRSA §1817

Legislative Document
No. 1431
H.P. 985
House of Representatives, April 13, 2017
An Act To Dedicate a Portion of the Tax on the Sale of Marijuana to 
Substance Abuse Prevention and Treatment, Law Enforcement 
Costs and Regulatory Oversight
Reference to the Joint Select Committee on Marijuana Legalization Implementation 
suggested and ordered printed.
ROBERT B. HUNT
Clerk
Presented by Representative CRAIG of Brewer.
Cosponsored by Representatives: ALLEY of Beals, TUELL of East Machias.
Be it enacted by the People of the State of Maine as follows: 
Sec. 1.  5 MRSA §20067, sub-§1-A, as amended by PL 2011, c. 657, Pt. AA, 
§45, is further amended to read: 
1-A.  Advise the department.  The commission shall advise the department in the 
development and implementation of significant policy matters relating to substance abuse 
and make recommendations regarding the disbursement of funds from the Substance 
Abuse Education, Prevention and Treatment Fund established in section 20068. 
Sec. 2.  5 MRSA §20068 is enacted to read: 
§20068.  Substance Abuse Education, Prevention and Treatment Fund 
1.  Fund established; purposes.  The Substance Abuse Education, Prevention and 
Treatment Fund, referred to in this section as "the fund," is established for the purpose of 
providing funding for: 
A.  Programs for education regarding, prevention of and support and treatment for 
substance abuse, including the prevention of marijuana use by minors; 
B.  Regulatory oversight of the retail marijuana industry; and 
C.  Increased costs to law enforcement agencies and the courts associated with the 
retail marijuana industry. 
2.  Administration; source of funding.  The fund is administered by the department. 
The fund is a dedicated, nonlapsing fund into which payments are received in accordance 
with Title 36, section 1817, subsection 7, paragraph B; Title 36, section 1818, subsection 
3, paragraph B; and Title 36, section 1819, subsection 4, paragraph B. 
3.  Disbursement of funds.  The department, after considering the recommendations 
of the commission regarding the use of the fund pursuant to section 20067, shall direct 
the State Controller to disburse funds for the purposes stated in subsection 1. 
4.  Report.  The commissioner or the commissioner's designee shall report annually 
by March 1st to the joint standing committees of the Legislature having jurisdiction over 
health and human services matters, criminal justice matters and appropriations and 
financial affairs. The report must include a description of the specific programs or 
services for which money was provided from the fund, the revenue received into the fund 
and the amount provided for each program or service. The report must describe any 
collaborative efforts between the department, the Department of Public Safety and the 
state licensing authority responsible for regulating and controlling the licensing of the 
cultivation, manufacture, distribution, testing and sale of retail marijuana and retail 
marijuana products in this State. The commissioner may submit recommendations for 
legislation to the joint standing committees of the Legislature having jurisdiction over 
health and human services matters, criminal justice matters and appropriations and 
financial affairs, which are authorized to submit legislation related to the report to the 
Legislature. 
Sec. 3.  36 MRSA §1817, sub-§2, as enacted by IB 2015, c. 5, §3, is amended to 
read: 
2.  Sales tax on retail marijuana and retail marijuana products.  The 
Notwithstanding section 1811, the sales tax on retail marijuana and retail marijuana 
products is 10% 15% and is the only tax charged on the sale of retail marijuana and retail 
marijuana products at the point of final sale at a retail marijuana store or retail marijuana 
social club. 
Sec. 4.  36 MRSA §1817, sub-§7, as enacted by IB 2015, c. 5, §3, is repealed and 
the following enacted in its place: 
7.  Application of tax revenues.  All sales tax revenue collected pursuant to this 
section must be distributed as follows: 
A.  Ninety-five percent must be deposited in the General Fund. None of the funds 
deposited in the General Fund pursuant to this paragraph may be used to directly fund 
any new state programs, except that revenue may be appropriated to the Maine 
Criminal Justice Academy for the purpose of training law enforcement personnel on 
retail marijuana and retail marijuana products laws and rules. Funds appropriated to 
the Maine Criminal Justice Academy pursuant to this paragraph may be used only for 
the actual costs incurred to provide the necessary education and training of law 
enforcement personnel; and 
B.  Five percent must be deposited in the Substance Abuse Education, Prevention and 
Treatment Fund established in Title 5, section 20068 to be used for substance abuse 
prevention, treatment and education programs, including programs for persons under 
years of age, and regulatory oversight of the cultivation, manufacture, sale and 
distribution of retail marijuana and retail marijuana products. 
Sec. 5.  36 MRSA §§1818 and 1819 are enacted to read: 
§1818.  Tax on the sale of medical marijuana 
1.  Imposition of tax; rate.  A tax is imposed on marijuana sold by a registered 
nonprofit dispensary or registered primary caregiver to a qualifying patient or registered 
primary caregiver pursuant to Title 22, chapter 558-C.  Notwithstanding section 1811, the 
rate of the tax is 15%. 
2.  Exclusive tax.  No other tax may be imposed on the retail sale of marijuana 
subject to the tax imposed pursuant to subsection 1. 
3.  Application of tax revenues.  All sales tax revenue collected pursuant to this 
section must be distributed as follows: 
A.  Ninety-five percent must be deposited in the General Fund; and 
B.  Five percent must be deposited in the Substance Abuse Education, Prevention and 
Treatment Fund established in Title 5, section 20068 to be used for the purposes 
specified in Title 5, section 20068, subsection 1. 
§1819.  Wholesale tax on marijuana 
1.  Definitions.  As used in this section, unless the context otherwise indicates, the 
following terms have the following meanings. 
A.  "Cannabis" means all parts of the plant of the genus Cannabis whether growing or 
not, the seeds thereof, the resin extracted from any part of the plant and every 
compound, manufacture, salt, derivative, mixture or preparation of the plant, its seeds 
or its resin including cannabis concentrate. "Cannabis" does not include industrial 
hemp, fiber produced from the stalks, oil, cake made from the seeds of the plant, 
sterilized seed of the plant that is incapable of germination or any ingredient 
combined with cannabis to prepare topical or oral administrations, food, drink or any 
other product. "Cannabis" also means marijuana. 
B.  "Edible retail marijuana product" means any retail marijuana product that is 
intended to be consumed orally, including, but not limited to, any type of food, drink 
or pill. 
C.  "Marijuana" means cannabis. 
D.  "Retail marijuana cultivation facility" means an entity licensed to cultivate, 
prepare and package retail marijuana and sell retail marijuana to retail marijuana 
establishments and retail marijuana social clubs under Title 7, chapter 417. 
E.  "Retail marijuana establishment" means a retail marijuana store, a retail marijuana 
cultivation facility, a retail marijuana products manufacturing facility or a retail 
marijuana testing facility as defined in Title 7, section 2442. 
F.  "Retail marijuana product" means concentrated retail marijuana and retail 
marijuana products that are composed of retail marijuana and other ingredients and 
are intended for use or consumption, including, but not limited to, edible retail 
marijuana products, ointments and tinctures. 
G.  "Retail marijuana social club" means an entity licensed to sell retail marijuana 
and retail marijuana products to consumers for consumption on the licensed premises 
under Title 7, chapter 417. 
H.  "Retail marijuana store" means an entity licensed to purchase retail marijuana 
from a retail marijuana cultivation facility and to purchase retail marijuana products 
from a retail marijuana products manufacturing facility and to sell retail marijuana 
and retail marijuana products to consumers under Title 7, chapter 417. 
2.  Rate of tax.  A tax is imposed on the wholesale sale of marijuana and retail 
marijuana products under Title 7, chapter 417 at the rate of 3%. 
3.  Imposition.  A tax is imposed at the time marijuana or retail marijuana products 
are sold to a retail marijuana store or retail marijuana social club by a retail marijuana 
cultivation facility or retail marijuana products manufacturing facility for resale by the 
retail marijuana store or retail marijuana social club.  The tax imposed pursuant to this 
section is a tax on the retail marijuana store or retail marijuana social club. 
4.  Application of tax revenues.  All tax revenue collected pursuant to this section 
must be distributed as follows: 
A.  Ninety-five percent must be deposited in the General Fund; and 
B.  Five percent must be deposited in the Substance Abuse Education, Prevention and 
Treatment Fund established in Title 5, section 20068 to be used for the purposes 
specified in Title 5, section 20068, subsection 1. 
Sec. 6.  Effective date.  This Act takes effect February 1, 2018. 
SUMMARY 
This bill establishes the Substance Abuse Education, Prevention and Treatment Fund 
to provide funding for: 
1.  Programs for education regarding prevention of and support and treatment for 
substance abuse, including the prevention of marijuana use by minors; 
2.  Regulatory oversight of the retail marijuana industry; and 
3.  Increased costs to law enforcement agencies and the courts associated with the 
retail marijuana industry. 
The fund is administered by the Department of Health and Human Services and 
disbursed based on the recommendations of the Substance Abuse Services Commission. 
The fund is funded by an increase in the tax imposed on the retail sale of marijuana 
and marijuana products from 10% to 15%, an increase on the tax imposed on medical 
marijuana from 5.5% to 15% and a wholesale tax imposed on the sale of marijuana and 
marijuana products for retail sale of 3%.  Five percent of the revenue from these taxes is 
deposited in the Substance Abuse Education, Prevention and Treatment Fund; the balance 
is deposited in the General Fund.