State takes its first step toward cannabis regulation
After months of anticipation, members of the General Assembly, lobbyists, business owners and potential license holders finally can begin to pore over the details of how Maryland will start up its recreational cannabis industry.
House Ways and Means Chair Vanessa Atterbeary and Economic Matters Committee Chair C.T. Wilson have taken up the legislation in the House chamber, and Senate Finance Committee Chair Melony Griffith and Education, Energy and the Environment Committee Chair Brian Feldman will seek to usher it through the Senate.
The bill is 88 pages. Here’s what you need to know about what’s inside:
A questionable timeline
Lawmakers are eyeing an aggressive timeline to get the market up and running by July 1. That’s the date they picked last year, and that voters statewide approved in a November referendum.
As of that date, Marylanders will be allowed to legally possess up to 1.5 ounces of cannabis and grow up to two plants per household.
But the draft of the bill indicates many of the details of the new industry won’t be settled until much later.
The plan, which is subject to change, would allow medical cannabis license holders to convert their licenses into joint medical and recreational cannabis licenses before July 1.
A round of new licenses then would be issued “on or before” Jan. 1. Those first licenses would be aimed at diversifying the industry by getting them into the hands of business owners from areas that were “disproportionally impacted” by the war on drugs. It’s unclear, though, how soon before or after Jan. 1 those licenses would be issued.
Another round of licenses would then be issued after May 1, 2024.
How quickly the licensing process and the rest of the industry get up and running may depend on what could be an intensive data-gathering process as officials identify the “disproportionately impacted areas.”
Some Democratic lawmakers have stressed the importance of prioritizing equity and effectiveness over speed. Whether they can hammer out all the details and do it before the session ends in mid-April remains to be seen.
An eye toward equity
Some lawmakers were dissatisfied with the regulatory framework bill that passed during the 2022 session, saying it didn’t go far enough to ensure the industry would be equitable for people of color who want to become retailers, growers and processors.
The 2023 bill would establish an Office of Social Equity under the Maryland Alcohol and Tobacco Commission. Its mission would be to ensure that communities disproportionately harmed by the enforcement of cannabis laws are encouraged to participate in the industry. The office also would offer recommendations and technical assistance for diversity and social equity applications.
“It’s clear that the bill intends to center equity, and that’s an important starting point,” said Legislative Black Caucus Chair Jheanelle Wilkins, a Montgomery County Democrat in the House of Delegates. “As we analyze the bill, we continue to work with House and Senate leaders to make improvements that achieve a first-in-thenation equitable cannabis industry.”
How many licenses?
The bill as drafted would provide for “standard” licenses for up to 300 dispensaries, 100 processors and 75 growers. “Micro” licenses for smaller operations would allow up to an additional 200 dispensaries, 100 processors and 100 growers.
These numbers include medical cannabis licensees that choose to convert to recreational businesses.
Tax on recreational sales
When legalized July 1, recreational cannabis initially would be taxed at a 6% rate. That would increase by 1% annually until it hits 10% in 2028, according to the bill.
Medical marijuana wouldn’t be subject to this tax.
The industry would be regulated under the Maryland Alcohol and Tobacco Commission — which would be renamed the Maryland Alcohol, Tobacco and Cannabis Commission — in the office of the state comptroller.
Portions of the tax revenue would go toward counties and municipalities and several different funds created under the bill, including a Community Reinvestment and Repair Fund.
Over the next decade, 30% of cannabis sales tax revenue would be set aside for the fund and allotted to “community-based organizations” in areas determined by the attorney general as “the most impacted by disproportionate enforcement” of cannabis laws before legalization.
Strict advertising regulations
Under the bill, cannabis retailers would not be allowed to advertise on “publicly visible” locations, including billboards. If they have websites, they’d have to require visitors to report they’re at least 21.
Any print or digital ads, including those on TV channels, radio stations, websites and apps couldn’t show anyone consuming cannabis or feature cartoons, mascots or other illustrations that attract the attention of children.