Portland city councilors are working on how marijuana retailers should be licensed. Earlier this year, the council made marijuana retail stores a permitted use in several zones, including the one that includes Exchange Street and much of the Old Port. Michael Kelley / The Forecaster

PORTLAND — City staff and councilors last week discussed licensing medicinal and adult-use marijuana businesses, but remain far from a consensus on what to do.

After an hour and a half of discussion in an Aug. 7 workshop, councilors on the Economic Development and Health and Human Services and Public Safety committees decided to send the proposed licensing regulations back to staff for additional work. The committees will reconvene in a few weeks to take the topic up again.

Anne Torregrossa, the city’s associate corporation counsel, said allocation of retail licenses was the thing staff “struggled with the most” in coming up with the proposed licensing ordinance.

More than 500 medical or adult-use marijuana stores, she said, could open in the city in the zones where marijuana businesses are allowed, even though it is proposed that the stores be at least 250 feet apart and 500 feet from schools.

“We know that is not reality and we know that is not going to happen,” she said. “Staff’s concern is people flooding the market and the market not being able to support all the retail stores.”

Because of that, Torregrossa said, staff is recommending capping the number of retail stores at 20. That cap is not a “magic number,” she said, but an attempt to find a number the market will support that’s fair to the marijuana industry and the city.

Councilor Brian Batson questioned the cap and expressed concern the proposed regulations will be too limiting.

“We have some pretty stringent requirements in here that I feel is really inherently going to limit the amount of businesses that are going to be allowed to operate in the city,” he said.

Batson said he would like to learn more about how communities in other states cap the number of retail stores and if they have seen market saturation, business failure or an economic boom.

Councilor Nick Mavodones said he wants “to hear more and learn more,”  but is “leaning toward letting the market, with good restrictions and regulations, dictate saturation.”

Assistant City Manager Heather Brown said the intent is to have the licensing program pay for itself and cover the cost of the city hiring additional staff to handle permitting and inspections, and investigation of complaints.

It’s anticipated that two additional employees in the licensing office, as well as one additional health inspector, code officer, fire inspector, and police sergeant will be needed. Current code inspectors and first responders will also have to be trained in compliance issues related to the marijuana industry.

“This will allow us to pay for the resources we think we will need to manage the program,” Brown said.

When Councilor Spencer Thibodeau asked Brown if she expects the proposed staffing level to be enough, Brown said she anticipates it would.

“We hope and expect as the industry matures, as the city’s model matures and as we get a better understanding as to how we will operate, we have enough staff to sustain that model,” she said.

The annual fees proposed in Portland are much higher than those in South Portland and Auburn, especially for adult-use marijuana ($10,000 in Portland versus $1,400 in South Portland and $5,000 in Auburn) and large-scale medical or adult-use marijuana cultivators ($10,000 in Portland versus $600 in South Portland and $2,500 in Auburn).

As part of the licensing process proposal, marijuana operators would have to have plans for security, waste disposal, and odor mitigation, as well as permission from their landlord and a designated community relations liaison to respond to inquiries from the public. Some operators would also be required to have plans for operations and quality control, as well as disclosing chemicals in use and certificates of inspection by an engineer and electrician.

The proposed regulations also would require labeling, prohibit food items that are marketed to minors or edible products that add marijuana to brand-name products. The proposal also recommends that marijuana food products and non-marijuana food products not be made with the same equipment.

The regulations would also prohibit any operator, aside from small-scale caregivers, from delivering the marijuana and marijuana products or selling them via mail order.

Torregrossa said licenses would be issued on a first-come, first-served basis to applicants who meet all the regulation and qualifications.

Maine voters approved legalizing recreational marijuana for those 21 and older in 2016. After several years of debate at the state level in terms of how that would work, state law was set in June that limits how much marijuana individuals can grow and how commercial enterprises can grow, manufacture, process and sell marijuana.

Those rules will take effect in September and recreational sales are expected to begin next March. The law gave municipalities the ability to regulate the industry through local ordinances. According to the Portland Press Herald, at least 14 of the state’s 455 municipalities have opted to allow marijuana businesses.