Prospective marijuana business cries foul over Old Orchard Beach rule change

Tom Mourmouras, president of Exit 710 LLC, is suing the town of Old Orchard Beach over its new ordinance regulating recreational marijuana stores. Ben McCanna/Staff Photographer

An Old Orchard Beach resident who wants to open a recreational marijuana store is asking a court to stop the town from “rushing to rig a licensing process” for the one license the town will issue.

Attorneys for Thomas Mourmouras, president of Exit 710 LLC, and resident Priscilla Rowell allege the town is stalling a referendum effort aimed at changing the ordinance regulating recreational marijuana stores at the same time that the Town Council made its own changes.

Mourmouras said the town’s original rules favored his plans, but within hours of telling officials he had an application ready to go, they took steps to change the system.

“They moved the goalpost once they found out who the applicants were,” he said.

The plaintiffs filed a motion for a preliminary injunction Wednesday asking a judge to stop the town from “short-circuiting the democratic process” by issuing the single adult-use marijuana license before the June referendum that could change restrictions for marijuana businesses.

The town is scheduled to accept applications for adult-use stores from March 6 to 10.

“They’re trying to give the only license out before citizens are allowed to vote on this issue. They’re effectively silencing the will of the voters,” Mourmouras, who owns the Beach Boys Cannabis Company medical marijuana dispensary, said Friday.

The plaintiffs filed a lawsuit on Feb. 16 in York County Superior Court alleging the town changed its ordinance to award the coveted license based on merit-based criteria rather than the first come-first served process that the town originally adopted. The original process would have resulted in Exit 710 LLC receiving the license because it was first in line, but the merit-based criteria favor an unnamed competitor that will propose a nearly 4,000-square-foot store, according to the lawsuit.

The group is asking the court to order the town to hold the referendum vote within 30 days, scrap the merit-based criteria, and wait to open applications until 10 days after the election.

Town Manager Diana Asanza and Zachery Brandwein, an attorney from Bernstein Shur who represents the town, both declined to talk about the lawsuit, saying they don’t comment on pending litigation. The town has not yet filed a response to the lawsuit with the court.

A RIGGED SYSTEM?

Under Maine law, recreational marijuana stores can operate only in towns that opt in to the state’s adult-use program. Municipalities have the power to limit the number of marijuana businesses within their borders and to require them to get municipal business licenses.

This is not the first time a municipality has faced criticism over how marijuana business licenses are awarded. In 2020, the Portland City Council voted to relax its eligibility requirements after a judge sided with an out-of-state applicant who claimed the city’s complex scoring matrix was unconstitutional because it favored state residents.

Last year, the owner of a local cannabis business threatened to sue the town of Kittery over the lottery it used to award the town’s three adult-use marijuana licenses, saying it was rigged because it allowed applicants to game the system by paying thousands of dollars to submit dozens of pre-applications.

Old Orchard Beach residents voted in 2020 to allow the sale of recreational marijuana. The town then spent nearly a year developing an ordinance that would only allow one store. The planning board also recommended the council restrict businesses to a maximum of 1,000 square feet, but the council did not adopt it.

Last fall, Rowell submitted a citizen’s petition signed by 603 residents seeking to limit the size of adult-use marijuana stores to 1,000 square feet on lots under a half-acre. Mourmouras’ own plans for opening a store called for a stand-alone building that is less than, 1,000-square-feet, a size he believes many residents prefer because it fits with the character of the town.

But the town planning department told the council it’s concerned the petition would make Mourmouras the only qualified applicant. The department also noted it would be difficult to interpret how to apply the size limits.

The council voted in December not to adopt the petition and scheduled a referendum on the question for June 13. The lawsuit alleges that a delay of more than eight months is illegal under the town charter, which says the Town Council must call a special town election within 30 days after a public hearing on the petition.

In January, the council ended up voting on its own amendment to move to the merit-based system. The new system, Mourmouras said, would favor his competitor. He also alleges the other company had a role in shaping the new rules.

To submit an application in Old Orchard Beach, applicants must have a conditional license from the state to operate an adult-use marijuana business. The Office of Marijuana Policy has issued two conditional licenses for Old Orchard Beach: the store proposed by Exit 710 LLC and one from Old Orchard Provisions LLC.

According to a public notice of intent to file a traffic movement permit with the Maine Department of Transportation, a development on Smith Wheel Road would include a 3,960-square-foot retail marijuana facility. Attempts to contact representatives of Old Orchard Provisions LLC on Friday were unsuccessful.


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