Cannabis & Commercial Real Estate Overview 2021

Stebbins Noah  /   May 7, 2021


Cannabis & Commercial Real Estate: 2021

Noah Stebbins, Associate

Originally featured in our 2021 Greater Portland Market Outlook.

Like it or not, the marijuana industry has arrived. In Maine all signs point to growth, slowly but surely. Marijuana policy has been changing rapidly across state lines in recent years. Currently, there are 17 states, including the District of Columbia, that have passed legislation legalizing the sale of marijuana. However, pushback from landlords, zoning/setback requirements, and local ordinances have made it challenging for retail marijuana companies to find adequate space.

Although the sale of recreational marijuana was legalized in Maine in 2016, no stores opened for business until this year. As I write this article, there are only eight recreational dispensaries located in Maine, in Bangor, Damariscotta, Newry, Northport, South Portland, Stratton, and Waterville. Portland, the state’s largest city, has delayed issuing licenses as local government officials continue to navigate the process.

A Much-Needed Tax Boost and Job Growth

In early October, the first weekend of recreational marijuana sales, Mainers spent over $250,000, which generated roughly $25,000 in sales tax. As marijuana becomes more mainstream and municipalities begin to loosen restrictions to enter the market—as Portland is trying to do— recreational marijuana sales could have a significant impact on Maine’s economy. A study conducted by New Frontier Data found that national legalization of marijuana in the United States could result in $128.8 billion in tax revenue, along with an estimated 1.6 million new jobs.

Nationally, the cannabis industry employs nearly 250,000 people.

With unemployment rates reaching unprecedented highs and traditional retailers unable to pay rent or vacating their spaces altogether, Maine’s marijuana industry represents an excellent source of alternative tax revenue and will also create jobs and help fill vacant space at premium lease rates.

A Zoning Primer for SoPo and Portland

In Greater Portland and throughout the state, the legal marijuana industry has had to wait years, but it’s proved to be resilient, despite restrictive ordinances and even a COVID-induced recession. New stores will be opening in Maine in the coming months, and as the industry continues to adapt, it could be a bright spot in the state’s commercial real estate landscape.

If you are thinking of investing in this sector, here are some ordinance requirements to consider.

In South Portland, recreational marijuana establishments are required to meet local land use approval and obtain local licensing. All marijuana-related establishments require site plan review and approval from the planning board prior to the issuance of any building permit or certificate of

Recreational marijuana dispensaries are permitted in the following South Portland zones:

– General Commercial District (CG)
– Professional Office District (PO)
– Central and Regional Commercial District (CCR)
– Transitional Central & Regional Commercial District (CCRT)

Dispensaries must be located 1,000 feet from schools and 300 feet from childcare facilities, community centers, higher educational facilities, large public outdoor recreational facilities, churches, synagogues, and other houses of religious worship. It is also important to note, South Portland has an odor management policy, security requirements, and the distance between stores must be 300 feet.

In October of 2020, the Portland City Council was forced to remove a point matrix from the city’s marijuana ordinance, as a federal judge deemed it unconstitutional. The point matrix system scored marijuana businesses on a 34-point scale that opponents argued gave some businesses an unfair advantage. Recently, Portland residents also voted to remove the cap on the number of stores and reduce the distance between dispensaries from 250 feet to 100 feet.

Portland is currently in the process of drafting ordinances to govern recreational marijuana dispensaries. These include being located within 500 feet of a preexisting public school, private school, or a public preschool program. Dispensaries are currently permitted in the following zones:

– Business Community (B-2)
– Downtown Business (B-3/B-3-b/B-3c)
– Commercial Business (B-4)
– Urban Commercial Business (B-7).


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Noah Stebbins Associate

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