In the State of Maine, a retailer selling tobacco and tobacco products to consumers must obtain a Tobacco Retail License from Maine's Department of Health and Human Services before engaging in said activity. This includes caregivers, dispensaries and Adult Use cannabis retail stores that sell pre-rolls, rolling papers, pipes and other "tobacco products" as defined by the Retail Tobacco Sales statute directly to patients and adults twenty-one years or older.
However, the State of Maine has a separate tax registration for companies that are engaging as a "Distributor" in "Tobacco Products." Under Chapter 704 - Tobacco Product Tax, a "Distributor" is defined as:
- a person engaged in the business of producing or manufacturing tobacco products in this State for sale in this State,
- a person engaged in the business of selling tobacco products in this State who brings, or causes to be brought, into this State any tobacco products for sale to a retailer,
- a person engaged in the business of selling tobacco products who ships or transports tobacco products to retailers for sale in this State,
- a retailer who imports, receives or acquires, from a person other than a licensed distributor, tobacco products for sale within the State or a person who makes delivery sales.
The definition of a "Tobacco Product" includes but is not limited to "cigars; cheroots; stogies; electronic smoking devices and liquids used in electronic smoking devices whether or not they contain nicotine..." However, the statute specifically excludes:
Any product that contains Adult Use cannabis subject to the Adult Use Excise Tax; and
Any product that contains cannabis or cannabis products subject to control under Title 22, Chapter 558-C - Maine Medical Use of Marijuana Act.
An example of a Tobacco Distributor would be a person purchasing electronic smoking devices outside the State of Maine and selling them wholesale to retailers, such as caregivers, dispensaries or Maine's Adult Use cannabis retail stores.
Please note that the definition for a Tobacco Product under the Tobacco Product Tax statute differs from the Retail Tobacco Sales statute.
Why is this important? First, Maine's Office of Cannabis Policy ("OCP") now includes information about this tax registration on its websiteand the compliance team at the OCP has begun to mention this to medical and Adult Use cannabis licensees. The OCP is not responsible for the enforcement of this tax registration, the Maine Revenue Service is. Second, those who do qualify as a Tobacco Distributor may face civil and/or criminal sanctions for failing to register and pay the required taxes.
If you believe you qualify as a Tobacco Distributor but have not registered as one with the Maine Revenue Service, I recommend contacting your attorney. In most cases, Maine cannabis companies would not be classified as a Tobacco Distributor. However, some might. If you do qualify, you may have to pay back taxes, including interest and penalties. Click Here for the current list of the registered Tobacco Distributors in the State of Maine.
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John M. Burke manages the firm's Maine cannabis law practice. Mr. Burke advises and represents the firm's clients throughout Maine in both the Medical and Adult Use cannabis programs in a wide range of Maine cannabis law matters. In addition to Mr. Burke's Maine cannabis law practice, Mr. Burke advises and assists the firm's clients in a variety of industries on various intellectual property matters throughout the United States. Learn more about John Burke by clicking here.
Caseiro Burke is a boutique law firm that specializes in intellectual property law and cannabis compliance and licensing in the State of Maine. We offer clients creative, cost-effective and reliable legal solutions in all intellectual property and Maine cannabis law matters.