Section 691-20-12 - Transfer of Ownership and/or Change of Principal(s)(1)Department Approval Required. A licensee may transfer ownership and/or controlling interests, including without limitation partial ownership, that results in any new person obtaining, or an existing person increasing, an ownership interest in the licensee equal to or greater than 5%, only after the application for a transfer of ownership or controlling interests has been approved by the Department. Ownership or controlling interests include all equity ownership interests as defined in 18-691 CMR, ch., 10, § 1, and all principals. This section applies, without limitation, to any change in principals. A licensee is not required to file an application for the transfer of ownership or controlling interests for the purpose of reporting transfers to employees whose ownership or controlling interests vested during the term of the license through an ESOP disclosed on the licensee's application for an active license or renewal, so long as such a transfer is not made to a person who is not an employee of the licensee and any such transfer does not result in an ownership or controlling interest in excess of the amount of ESOP-designated shares reported on the licensee's application for a license. (A) An application for the transfer of ownership or controlling interests must:(1) Be completed on forms made available by the Department;(2) Be submitted to the Department;(3) Be accompanied by any applicable fees described on the application form; and(4) Be accompanied by all required forms and supplemental information, provided by the person or entity seeking to assume an ownership interest, similar to that required in an application for a cannabis establishment license, to demonstrate compliance with all applicable requirements for licensure.(B) Fingerprinting and criminal history record checks in accordance with this rule are required for anyone proposed as a principal.(C) If the municipality or Maine Land Use Planning Commission requires notice and approval of transfers of ownership pursuant to its local authorization, the licensee must request and the municipality or the Maine Land Use Planning Commission, as applicable, must submit the local authorization form.(D) The Department may deny an application for transfer of ownership interests if: (1) The Department determines that any proposed ownership interest is not permitted under 28-B MRS or this rule;(2) The licensee has not paid any fine or fee required by the Department; or(3) The Department is engaged in an ongoing investigation of the licensee.(2)Notice Required. The following changes require notice to the Department: (A)Notice and Individual Identification Cardholders. Before any new principal, contractor, or consultant as defined in 18-691 CMR, ch. 10, § 1 may associate with a licensee, the licensee shall comply with 28-B MRS §213.(B)Notice and Assessment. For any financial interest that does not require prior approval or notice as above, the licensee shall notify the Department prior to the beginning of that association and the Department will consider whether the interest has been appropriately characterized and whether 28-B MRS §205(2) is implicated.(C)Notice of Termination and Changes. The licensee shall notify the Department within 5 business days of the termination of any direct or indirect financial interest, and of any significant change to the nature or extent of that interest.(3)No Prior Notice Required. Without prior notice to and approval by the Department, licensees may employ and contract with any persons who clearly do not fall within the definition of those with direct or indirect financial interests in the licensee or principals of the licensee, for the operation of a cannabis establishment, so long as each such person has a valid individual identification card. Employment of an employee having a direct or indirect financial interest in the license solely through an ESOP as defined in 18-691 CMR, ch. 10, § 1 does not require prior notice or approval by the Department provided that the licensee appropriately reports the ESOP, by reporting annually on forms provided by the Department, the name of any person holding an equity interest in the licensee through an ESOP. Compensation for such persons must not be structured as a means of evading the provisions of this rule. As employers, licensees are required to follow all applicable local, state and federal employment laws. including, without limitation, laws pertaining to workplace safety, hours and wages, and all other laws pertaining to the employment of persons in the State of Maine. Nothing in this rule shall be construed to exempt a cannabis establishment from the rights and responsibilities associated with being an employer.(4)Temporary Appointee. Ownership or operations generally may not be transferred to a person or business entity prior to the approval of an application for transfer of ownership interests. However, in cases of death, disability, bankruptcy or other exceptional circumstances, a court may appoint a receiver, personal representative, executor, administrator, guardian, conservator, trustee or similarly situated person to take possession of, operate, manage, control, or wind down a licensee's operations. In the absence of such a court appointment, the Department may approve a temporary appointee to take possession of, operate, manage, control or wind down a licensee's operation. Under such circumstances:(A) The court appointee or temporary appointee may assert a financial and management interest in a cannabis establishment upon certification to the Department that the person is 21 years of age and has no disqualifying drug offenses.(B) No court appointee or temporary appointee may enter a limited access area, sell or otherwise transfer cannabis or cannabis products without a valid individual identification card.(C) No person may use the tracking system until authorized by the Department.(D) If appointed by the court, the person shall submit application for transfer of ownership interests as soon as practical, and in no case more than 45 days after a qualifying event.(E) If approved as a temporary appointee by the Department in the absence of a court appointment, the licensee shall submit a plan of temporary appointment, on forms made available by the Department, as soon as practicable, and in no case more than 60 days after the qualifying event.(5)Denial. The Department may deny an application for transfer of ownership interests for failure to comply with this section. The Department shall notify the applicant in writing of the denial and the good cause basis for the denial. An applicant may appeal an application denial to the Superior Court in accordance with Rule 80C of the Maine Rules of Civil Procedure. Fiscal impact note, included pursuant to 5 MRS §8063: The Department estimates that the changes implemented by this rulemaking will have a de minimus fiscal impact on municipalities and counties.
18-691 C.M.R. ch. 20, § 12