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Lawmakers Unveil Maryland Cannabis Industry Regulation Bill

Lawmakers Unveil Maryland Cannabis Industry Regulation Bill

State lawmakers in Maryland last week introduced a bill to regulate the state’s adult-use cannabis industry, three months after voters approved a referendum to legalize recreational marijuana in the November midterm election. The 88-page bill, SB0516, was introduced in the Maryland House of Delegates and the state Senate on Friday.

Under the referendum passed in November, legal sales of recreational marijuana are slated to begin by July 1. Under the legislation unveiled last week, more than 400 licenses to cultivate, process and retail recreational marijuana could be issued by the state. Delegate C.T. Wilson, the House sponsor of the bill and chairman of the House Economic Matters Committee, said that a primary goal of the legislation is to create an equitable regulated cannabis in Maryland.

“My argument has been from the beginning that it’s not worth doing if there’s no equity in the marketplace,” Wilson told his fellow members of the Legislative Black Caucus of Maryland.

The legislation includes provisions to regulate cannabis businesses and sets a 6% tax on recreational marijuana purchases. The bill establishes different classes of licenses based on the business size, including standard licenses for businesses producing or retailing large amounts of cannabis for Maryland’s adult-use cannabis market. The legislation includes provisions for standard licenses for up to 300 cannabis dispensaries, 100 processors and 75 cultivators. 

The bill also includes 400 micro licenses for small businesses, including 200 dispensaries, 100 growers and 100 processors. Additionally, up to 50 licenses for on-site cannabis consumption lounges are authorized by the proposed legislation.

Maryland Cannabis Bill Focuses on Equity

Senate President Bill Ferguson said lawmakers hope the bill will successfully establish an equitable cannabis industry, acknowledging that the goal has largely been an elusive one for other states that have regulated cannabis commerce.

“I feel very good about the bill. I think it has a chance to be a national model,” said Ferguson.

“It’s a complex topic; there are a lot of different pieces,” he added. “No state has gotten it right, and so what I do believe we’ve done effectively here is put us on the path to, one, protect public health and having a regulated marketplace, where we have a real regulatory framework to ensure that the product that is being sold on the street is safe, and, two, open up and expand the marketplace in an equitable way.”

The bill tasks the state Alcohol and Tobacco Commission with regulating Maryland’s adult-use cannabis industry and renames the agency the Alcohol, Tobacco and Cannabis Commission. An Office of Social Equity will be created in the cannabis division to promote participation by “people from communities that have previously been disproportionately harmed by the war on drugs in order to positively impact those communities.” 

The bill also allows the state’s existing medical marijuana businesses to pay a fee to convert their licenses to allow them to produce and sell adult-use cannabis. Although critics argue that the plan contradicts the goals of creating a diverse and inclusive industry, lawmakers said it is necessary to ensure the regulated cannabis market launches as scheduled.

“We knew Maryland needed to modernize its cannabis policies, and we knew we had to get it right,” House Speaker Adrienne A. Jones said in a statement. “Part of getting [it] right meant making the new industry equitable while meeting that July 1 deadline.”

To help promote equity in the cannabis industry and ownership by those negatively affected by marijuana prohibition, the first licenses awarded will be reserved for social equity applicants. To qualify, an applicant must have lived in a “disproportionately impacted area” for five of the last 10 years or have attended a public school in such an area.

Delegate Jason Buckel, the Republican minority leader in the House, said that GOP lawmakers will review the legislation, including an assessment to determine if the social equity provisions of the bill are fair and legal.

”We’re certainly not opposed to efforts to get small- and minority- and women-owned businesses up and running in the industry,” said Buckel, who represents a district in western Maryland. “We want everyone to have the same fair chance to be part of something that’s now legal, but you’ve got to do it in the right way.”

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