Lawmakers want to combat illegal Chinese weed grows joining Maine’s medical market

AUGUSTA — Maine lawmakers are looking to give authorities more tools to make it harder for hundreds of black market cannabis farmers allegedly associated with Chinese organized crime to receive licenses to grow and sell in Maine’s medical market.

But leaders of the state’s largest cannabis trade and advocacy groups are pushing back against several bills, saying they don’t trust the state to enforce the rules fairly.

Public hearings were held at the State House Thursday on four bills seeking to give state cannabis regulators more authority to reject and revoke cannabis growing licenses.

“Not only do these operations destroy homes through mold and fire, create a tainted product, and infiltrate Maine’s market, causing a drop in prices, but they are connected to Chinese gangs,” said Rep. Scott Cyrway, R-Albion, sponsor of one bill. “Illegal grows are an attack on Maine’s cannabis industry, cannabis consumers, homebuyers, and the public alike.”

Rural Maine has become a hot spot for illicit cannabis cultivation in recent years as transnational organized crime groups have purchased hundreds of homes, barns and warehouses across the state to be used as industrial-scale weed farms, often staffed with forced labor and human trafficking.

As law enforcement began cracking down on the operations in early 2024, hundreds of them began applying for — and receiving — medical cannabis caregiver licenses with the state, allowing them to transition illegal facilities into the legal market and sell cannabis to medical dispensaries across the state.

The barrier to becoming a Maine licensed caregiver is low. Under current regulations, medical caregivers do not have to be from or live in Maine. All that’s needed is a facility here to grow. After paying a fee as little as $240 and filling out an online form, the state will mail you a license in about a month.

Illegal growers allegedly running operations for Chinese organized crime have been in Maine’s medical market since at least 2020, a Press Herald analysis of caregiver licenses found. Today, nearly one in 10 caregivers exhibits the hallmarks of the more than 50 illegal grow houses raided by local and federal authorities across Maine so far.

Only a handful have been revoked for being involved with what state Office of Cannabis Policy investigators describe as a “prohibited collective” of black market growers and licensed caregivers. Even if the OCP revokes a license, the person can apply for another one after just 30 days.

“Their brazen scheme is to obtain medical registration from OCP, and once found in violation at the location, the violator is expelled and immediately another individual is presented for registration at the same location,” said Rep. Ann Fredericks, R-Sanford. “It’s a sophisticated and well-funded network.”

The bills are all proposed by Republicans, though some had bipartisan sponsors. Some looked to prevent the state from licensing applicants by making cannabis-related convictions a disqualifying offense. Others proposed prohibiting licenses to individuals or addresses under investigation for illegal growing operations.

Sen. Craig Hickman, D-Winthrop, chair of the Veterans and Legal Affairs Committee, said he intends to condense all the bills into one during the next work session.

The legislation faced opposition from the Medical Marijuana Caregivers of Maine and the Maine Cannabis Union Association, two of the state’s largest industry groups.

Catherine Lewis, a member of both groups, said she supports parts of the bills but is against others. She said discussions about Chinese organized crime were “promoting racism whether we’re intending to or not.”

Lewis went on to say she has established hundreds of LLCs for medical caregivers over the years, including about a dozen from what she described as “the Asian market.” Some of them, she said, would later be arrested for running illegal grow houses.

“What if I’m associated with certain people not knowing that they’re certain people? That they’re criminals? How am I supposed to know that?” Lewis said.

The caregivers group has previously encouraged illegal Chinese growers to join the medical market so that the organization can teach them “best practices” to grow safely. Recently, it has opposed legislators’ efforts to mandate the mold testing and plant tracking required in Maine’s recreational market to its medical industry.

Medical caregivers have also accused the Office of Cannabis Policy of selectively enforcing rules and statutes against politically active caregivers who dislike the agency’s policies, said Maine Cannabis Union Association President Jennifer Belcher. She said her cannabis business has been derailed by numerous anonymous complaints that have forced her to effectively shutter the business.

“In the past, it’s been good legislation like this that’s been weaponized against us,” she said. “What if they decide to label that I’m a drug house, or that there’s been Chinese involvement?”

If passed, some of the bills could “raise concerns around due process,” according to the Office of Cannabis Policy’s deputy director of operations, Vern Malloch. He testified on behalf of the agency neither for nor against the bills, saying that implementing seed-to-sale plant tracking and mandatory product testing would be more effective ways to stem illicit operators in the medical market.

The committee’s ranking Republican, Rep. David Boyer of Poland, noted that many other states with mandatory tracking and testing in their cannabis programs, such as Oklahoma and California, have also dealt with a proliferation of illegal Chinese growing operations. Malloch said Maine’s lack of such basic safety measures makes it an even more attractive location for illegal growers to set up shop.

“Illicit operators flock to the medical program because the program lacks transparency into the origin and chain of custody of cannabis,” Malloch said. “Illicit cannabis operators are not applying to the adult use program because cannabis moving through that program is subject to comprehensive, closed-loop inventory tracking and testing.”

Derek Shirley, a cannabis activist who runs the Instagram account @gettinghighwithcats, arrived to the hearing in a bright orange jumpsuit reading “Why does Gov. Janet Mills and the Republicans want to create more cannabis prisoners?” He testified against the bills, saying illegal grows and their operators are an issue for federal authorities to deal with.

“My logic is this: If we can understand that bad people can get guns, what’s the logic of bad people can still grow cannabis?” Shirley asked. “No matter what rule you put in play, the more barriers of entry you create, you’re creating a larger black market and you are going to create more cannabis prisoners.”

In presenting their bills, however, legislators repeatedly said that allowing illicit businesses to enter the legal market hurts above-board operators.

Office of Cannabis Policy Director John Hudak testified this week that grow house weed is being sold at “rock bottom” prices to medical dispensaries because of the unpaid labor and toxic chemicals used to cultivate it, undercutting growers who follow the law.

“There’s a gap in the system. Someone can be convicted of running an illegal grow and selling cannabis outside of the law, and then just a month later apply for a license to operate legally,” said Sen. Jeff Timberlake, R-Androscoggin. “That sends the wrong message, not just to law-abiding businesses, but to the public as well.”