Overview 

On Feb. 3, 2023, Maryland state lawmakers introduced S.B. 516, cross-filed as H.B. 556, providing a regulatory framework for cultivating, producing, and selling adult-use marijuana. They also introduced a Maryland Social Equity Cannabis program that specializes and creates opportunities for individuals from communities disproportionately affected by the War on Drugs. Licensees physically and actively engaged in the cultivation, processing, or dispensing of medical cannabis and those businesses preapproved for licensure on or before October 1, 2022, shall pay a one-time conversion fee to operate a medical cannabis and adult-use cannabis business. On or before July 1, 2023, the Cannabis Regulation and Enforcement Division (the “Division”) will convert eligible licenses that satisfy the conversion fee requirements.

Licensing Opportunities for Maryland Social Equity Cannabis Businesses

• First-round application submissions for all license types are limited to social equity applicants. The application process for social equity applicants opens in September of 2023.
• A Social Equity Applicant is defined as an applicant that has at least 65% ownership and control held by one or more individuals who:
  • Lived in a disproportionately impacted area for five of the past 10 years;
  • Attended a public school in a disproportionately impacted area for 5 years; or
  • Attended, for at least two years, a 4-year institution of higher education in the State where at least 40% of the individuals who attended the institution are eligible for a Pell grant.

NOTE: A “Disproportionately impacted area” means a geographic area identified by the Office of Social Equity that has had above 150 percent of the State’s 10-year average for cannabis possession charges. This provision is based on draft regulations, and is subject to change.

• The Division shall enter each social equity applicant that meets the minimum requirements into a lottery and issue to social equity applicants not more than the following types of licenses:

1. Standard Licenses: 20 Grower Licenses, 40 Processor Licenses, and 80 Dispensary Licenses.
2. Micro Licenses: 30 Grower Licenses, 30 Processor Licenses, and 75 Dispensary Licenses. Second-round application submissions for Micro Licenses are limited to social equity applicants.
3. Incubator Space Licenses: 10 Licenses

Maryland Recreational Cannabis Business Licenses

• Cultivation Licenses: can grow cannabis plants, dry, cure, package, process cannabis-infused products, and sellwholesale to other licensed Maryland cannabis businesses.
  • Micro license: shall not operate more than 10,000 square feet of indoor canopy or its equivalent. 100 micro Growers licenses available.
  • Standard license: 75 standard Growers licenses available (10,000 sqft – 300,000 sqft)

• Processor Licenses: authorizes the acquisition, possession, processing, and sale of cannabis from adult-use cultivators to licensed processors or distributors.
  • Micro license: shall not process more than 1,000 pounds of cannabis per year. 100 micro-Processor licenses available.
  • Standard license: 100 standard Processor licenses available.

• Dispensary Licenses: shall authorize the acquisition, possession, sale, and delivery of cannabis-to-cannabis consumers.
  • Micro license: Dispensaries holding a micro license shall operate a delivery service that sells cannabis or cannabis products without a physical storefront, provided the licensee employs fewer than ten employees. 200 micro Dispensary licenses available.
  • Standard license: 300 standard Dispensary licenses available.

NOTE: A micro licensee in good standing may apply to the Administration to convert to a standard license once it has been operational for at least 24 months. This provision is based on draft regulations, and is subject to change.

• Incubator Space Licenses: authorize licensees to operate a facility within which a micro licensee may operate. Licensees rent their facility to micro-licensees so they may dispense, process, or cultivate in the space. 10 licenses available.
• On-Site Consumption Licenses:authorize licensees to operate a facility where individuals can smoke, vape, or consume cannabis. 50 licenses available.

There are 3 rounds of applications for licensing in 2023, 2024 and 2025. The first round of licenses to be issued in 2023 are reserved for social equity applicants only. See below for more information.

• Round 1 in 2023 (Social Equity Applicants Only):
  • Standard Licenses: 20 Grower Licenses, 40 Processor Licenses, and 80 Dispensary Licenses.
  • Micro Licenses: 30 Grower Licenses, 30 Processor Licenses, and 75 Dispensary Licenses.
  • Incubator Space Licenses: 10 Licenses

Are you interested in obtaining a cannabis business license in Maryland? Are you seeking guidance on developing an effective business plan? Call us to speak with an industry expert at 602-290-9424.