On July 1st, 2023, recreational use of marijuana became legal in the state of Maryland, making it the 20th state to have legalized marijuana within its borders. Under the Cannabis Reform Act (HB 556/ SB 516), the Maryland Cannabis Administration will begin to administer the licensing of all adult-use cannabis businesses. Licensees from the medical marijuana program had until July 1st, 2023, to either convert their licenses to adult-use, sell their license to an interested group, or close their operations.
As the Maryland Cannabis Administration recently announced its intentions to begin accepting applications for adult-use cannabis business licenses on November 13, 2023, now is the time to get a head start on each aspect of the application process, so you can be one of the first cannabis businesses in Maryland’s booming marijuana market. According to various news outlets, the state of Maryland reported more than $10 Million in adult-use marijuana sales within the first week of the law’s operation.
So, what is the timeline of Maryland’s adult-use marijuana industry? The Maryland Cannabis Administration will begin accepting applications for adult-use cannabis business licenses on November 13, 2023. Interested applicants will only have a thirty (30)-day window to submit their application. Thus, the last day to submit an application for licensure is December 12, 2023. Thereafter, applicants will receive any deficiency notices from the Administration. After review of the completed applications, the Administration will issue the 1st Round of licenses on or before January 1st, 2024. The Administration will hold a 2nd round application process, so they may issue the remaining licenses on or before May 1st, 2024.
What type of licenses can be issued by the Maryland Cannabis Administration? Under the Act, there are six (6) types of licenses that can be applied for: (1) Grower; (2) Processor: (3) Dispensary; (4) Microlicenses (Grower; Processor; or Dispensary); (5) Incubator Space; and (6) On-Site Consumption. Further, if you are interested in becoming a Grower, Processor, or Dispensary, you can either apply for a “Standard” license or a “Microlicense.”
Am I eligible to apply? For the 1st Round of licenses set to be issued in January 2024, it will be strictly awarded to “social equity applicants” only. A “social equity applicant” is defined in the Act as an applicant with 65% ownership and control by individual(s) who are eligible under one (1) of the three (3) qualifications: (i) lived in a disproportionately impacted area for at least five (5) of the ten (10) years preceding the application; (ii) attended a public school in a disproportionately impacted area for at least five (5) years; OR (iii) at least two (2) years, attended a four (4)-year institution of higher education in Maryland where at least 40% of individuals who attended the institution are eligible for a pell grant. Furthermore, the 2nd Round of licenses may be limited to social equity applicants only as well. This is dependent on the Administration’s review of the program’s diversity progress – if there is a continued lack of representation after the 1st Round, the 2nd Round will only be for social equity applicants again.
Is there a Residency Requirement? Under the Act, there is no residency requirement to apply in Maryland for an adult-use cannabis business license.
Is the Maryland application process competitive? Yes and no. The Maryland Cannabis Administration will be utilizing a lottery selection for its license selection in the 1st Round. However, each category of license is capped. Standard licenses for Grower, Processor, and Dispensary are limited to seventy-five (75) Grower licenses, one hundred (100) Processor licenses, and three hundred (300) Dispensary licenses. Microlicenses for Grower, Processor, and Dispensary are limited to one hundred (100) Grower licenses, one hundred (100) Processor licenses, and ten (10) Dispensary licenses. Further, Incubator Space licenses are limited to ten (10), whereas the On-Site Consumption licenses are limited to fifty (50).
Do I need a physical facility/location before applying? No. Interested applicants are not required to possess or own a facility at the time of application.
Are there any ownership restrictions for multiple licenses? Yes. A person can have ownership interest in or control of: one (1) Grower license, one (1) Processor license, and four (4) Dispensary licenses. A person cannot be an owner/have control of more than two (2) Incubator Space licenses or On-Site Consumption licenses. Moreover, a person with ownership/control in an Incubator Space or On-Site Consumption license cannot own/control any other licenses. There are more lenient restrictions if the ownership interest is just as a passive investor as well.
How much will it cost me to apply? For Standard licenses, Incubator Space license, and On-Site Consumption license applications, it will cost interested applicants five thousand dollars ($5,000.00) to apply. If you are applying for a Microlicense, you will need to pay one thousand dollars ($1,000.00) to apply for such license type.
If you are interested in applying for a lucrative Maryland Cannabis Business License, now is the time to work with a Team of experts to begin strategizing your plan in entering Maryland’s booming marijuana market. Contact us today to discuss your options!