Portland is developing rules to try to keep medical marijuana shops, including high-volume home operations, out of residential areas.

It is part of the city’s effort to decide how to regulate marijuana operations in the wake of new laws that expand opportunities for people who make a living in medical marijuana, especially Maine’s network of 3,000 licensed caregivers. The laws also affect those eager to jump into the new recreational market, which is expected to go live in late 2019.

City Manager Jon Jennings likened the city’s developing marijuana policy to its position on short-term rentals and sober houses.

“They will have a place, but it’s not in our residential neighborhoods,” Jennings said. “Large-scale commercial and industrial operations could have significant impacts on our neighborhoods. We need time to make sure we find the right fit, to make sure it is done safely and to make sure it is done right.”

Some residents in the Stroudwater neighborhood complained to the city for years about an unofficial “convenience store for weed” that two caregivers had been running out of their Westbrook Street home. While the caregivers had fenced in the grow, neighbors said the business had attracted too many people, some of whom could be seen consuming marijuana during the sales.

“I’m a pretty live-and-let-live kind of guy, but what they were doing there last year and the year before definitely didn’t belong in a quiet little neighborhood like ours,” said Bruce Savage, who lives a few doors down on Pierce Avenue. “I think people who are sick should be able to get their medicine, but it didn’t seem like a medicinal kind of operation, if you know what I mean.”

Cassie Medeiros live in the house across the street and didn’t like having to explain her neighbors to visiting relatives or her young daughter, whose upstairs bedroom window looks out onto the roadside shed where the caregivers sold to their customers. Lost patients would occasionally come knocking on their door looking for marijuana.

“I’m OK with marijuana, whether it’s used medicinally or recreationally, but even I don’t think you should be selling it in a little shack on the side of a dead-end street,” Medeiros said Sunday afternoon while waiting for a pizza to come out of the oven. “They do not have parking; there’s not even a place for people to turn around. … It just doesn’t belong here, you know?”

The caregivers could not be reached for comment. After years of complaints, the city code enforcement officer came out to inspect the operation in May, bringing a police officer and a state marijuana inspector with him. They concluded the caregivers were no longer growing marijuana on the property, but issued a stop-work order for building a gazebo without a permit.

Portland currently doesn’t have any marijuana-specific regulations, officials say. It doesn’t license any retailers, whether they sell cake, carburetors or cannabis. Zoning rules don’t single out marijuana grows, retailers, or extraction labs, or define them as a kind of use that belongs in one part of the city instead of another – at least not yet.

Portland doesn’t even know how many medical marijuana businesses it is hosting. Caregivers don’t have to register with the city, and it is only recently that the state has been willing to share caregiver records with municipalities. The only ones Portland knows about are a handful that have sought a city permit of some kind or those upsetting their neighbors, like the one on Westbrook Street.

Portland has issued almost two dozen building, electrical or plumbing permits for almost $500,000 worth of work to caregiver cultivation, retail and processing facilities since 2014, according to city records. These are just the ones that have needed permits – officials know many of these businesses have been flying under the city’s radar, as there have been no official local permits required.

For example, the Ganja Candy Factory opened its doors in a mixed-use industrial park near the Riverside Golf Course this year. It sells medical cannabis and edibles in a brightly colored retail shop on the ground floor. It grows the marijuana and makes the edibles it sells in another section of the building. The owner said he was surprised he didn’t need to get a city permit.

Unofficial cannabis hubs are cropping up along the Riverside Street and Forest and Warren Avenue corridors, with entrepreneurs converting office, warehouse, and auto body shops into marijuana grow and manufacturing operations. One Warren Avenue gas station owner leased out his walk-in cooler to a caregiver who is converting it into a medical marijuana retail shop.

And more is on the way. The new legislation has sparked proposals from caregivers who want to open retail shops, some in hopes of jumping into the recreational market if they can get their licenses when they become available next year, and labs that extract the oil from cannabis for use in creating medical edibles, or “medibles,” for those who don’t want to smoke their medicine.

An Old Orchard Beach financial consultant, Tom Mourmouras, is working with a business partner to convert an Old Port barbershop into a retail shop. Two grow operations – one off Riverside Street and another off Forest Avenue where multiple caregivers cultivate their medicine under one roof – want to add extraction labs to their marijuana operations.

Officials are asking the City Council to approve a six-month moratorium on new medical marijuana retail and processing permits that would retroactively kick in as of July, when the Legislature passed new medical marijuana legislation. They want time to write medical rules, including zoning to keep caregivers from operating retail stores – serving more than five patients at a time – in the neighborhoods.

Problems range from marijuana odor to heavy traffic to guard dogs that escape the caregivers’ property, especially in residential areas, said Interim Police Chief Vern Malloch. Most of the existing businesses, however, shouldn’t have any problem conforming with the new rules. He said Portland doesn’t want to keep marijuana businesses out of the city, but “we want to go slow.”

Mourmouras, who is himself a caregiver, said he is OK with going slowly, and understands the city’s interest in keeping retail shops out of the neighborhoods, but he said it isn’t fair to apply the moratorium retroactively to proposals like his own. He noted the city permitted a convenience store conversion into a medical marijuana retail shop just two weeks ago.

He thinks medical marijuana retail shops should be allowed in the same zones that Portland was willing to allow dispensaries. He hopes the city will follow the lead of South Portland, and won’t require overly restrictive performance standards, like parking spaces in the Old Port or expensive security systems, that would essentially shut Portland out of the marijuana market.

“We hope Portland will take the stigma out of this and look at marijuana as a land use,” Mourmouras said. “Between landlord concerns and the lack of access to federal loans and mortgages, it can be very difficult to find a property that checks every box, even though it is a legal, regulated activity here in Maine. I would hope Portland wants to help locals make the most of this opportunity.”

Portland voters approved legalization of recreational cannabis by a margin of almost 2-to-1 in 2016.

The city has been waiting for the Legislature – and the analysts who translate its laws into regulations – to come out with a detailed set of rules before deciding if it needs to localize them for Portland’s market. There is no rush on the recreational side, as those growers and retailers need both state and local licenses to proceed, but a state-registered caregiver is freer to act soon.

The City Council is expected to act on the moratorium proposal on Sept. 17. City officials will return thereafter with a zoning plan for both medical and adult-use businesses. While the city can’t stop medical marijuana caregivers from serving patients out of their homes, it plans to define those serving more than five patients as a retailer and prohibit them from selling in residential neighborhoods, Jennings said.

City officials say it will take more time to develop other non-zoning marijuana regulations that deal with public safety, building codes or health codes. Those may be included in the city’s adult-use marijuana licensing process, or they could be stand-alone regulations. The city will want to see what regulations the state will come out with for adult-use marijuana, Jennings said.

Portland will try to keep the rules for medical and adult-use marijuana as similar as possible to make it easy for residents, enforcement officers and would-be developers to understand, Jennings said. The city wants medical marijuana operators already doing business in Portland to meet the new standards, once written. Inspectors will review those who do not on a case-by-case basis.