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Maryland Cannabis Consultants
Table of Contents
Introducing a significant milestone in Maryland’s cannabis landscape: Adult-use cannabis has officially been legalized through Governor Wes Moore’s signing of the law on May 3, 2023. Anticipate the commencement of legal recreational sales on July 1, 2023. Are you interested in seizing the opportunity to establish one of the pioneering adult-use cannabis businesses in Maryland? Waste no time and schedule a consultation today with our team of esteemed Maryland cannabis consultants.
Now, delve into our comprehensive article below, where we provide you with a meticulously crafted, step-by-step guide on the application process for obtaining a Maryland cannabis business license. But before we delve into the details, let’s take a moment to explore the Maryland cannabis business license process as well as the program itself.
Maryland Cannabis Laws and Regulations
To start, it is essential to review the legislative documents known as House Bill 556 and Senate Bill 516. These bills have undergone cross-filing and can be found in Chapters 254 and 255 of the Maryland Code.
Next, it is crucial to familiarize yourself with the governing entities overseeing the new adult-use program. The Maryland Cannabis Administration (referred to as the “Administration”) will be responsible for regulating both medical and adult-use cannabis, as well as licensing. Collaborating with the Administration is the Alcohol, Tobacco, and Cannabis Commission, which has been renamed to reflect its expanded role. Notably, the Commission will house the Office of Social Equity (referred to as the “Office”), dedicated to promoting the active involvement of individuals from communities disproportionately impacted by the war on drugs.
Timeline – Cannabis Licensing Maryland
Starting on July 1, 2023, the sale of cannabis for adult-use will commence exclusively through the existing medical cannabis licensees who will undergo a conversion process by paying the required fee. These licensees will be authorized to cultivate, manufacture, and dispense cannabis for the adult-use market. Following this initial phase, Maryland will proceed to grant adult-use cannabis licenses to new applicants, as outlined in the comprehensive details provided below.
In September 2023, the commencement of Round 1 marks the beginning of a 30-day application period for individuals and businesses seeking to apply for standard or micro cannabis licenses. It is important to note that this application opportunity is specifically designated for social equity applicants, ensuring a fair and inclusive process.
During the months of October to November 2023, the Administration will review and evaluate the submitted applications and engages in necessary outreach with applicants to ensure a thorough review process. The primary objective is to assess whether each applicant meets the minimum qualifications for participation in the lottery, employing a pass-fail basis for evaluation.
Effective January 1, 2024, the Administration officially communicates the results to the successful applicants from Round 1, notifying them of their successful licensing status.
In May 2024, the Administration will official announce the initiation of Round 2 for standard and micro cannabis licenses, which will include the availability of on-site consumption licenses as well.
Types of Adult-use Cannabis Business Licenses in Maryland
Maryland’s adult-use cannabis program encompasses the issuance of five distinct types of business licenses:
1. Grower: A maximum of 75 standard licenses and 100 micro licenses.
2. Processor: A maximum of 100 standard licenses and 100 micro licenses.
3. Dispensary: A maximum of 300 standard licenses and 10 micro licenses.
4. Incubator Space: A maximum of 10 licenses.
5. On-Site Consumption Lounge: A maximum of 5 licenses.
It is important to note that each license category can be either a “Standard” or “Micro” license. Additionally, it is worth mentioning that all micro licenses are exclusively available to social equity license applicants.
Standard License in maryland
For Growers, the requirement is to operate within a range of more than 10,000 square feet, but not exceeding 300,000 square feet, this includes indoor canopy or its equivalent.
Processors must handle more than 1,000 lbs. of cannabis per year as part of their processing operations.
Dispensaries are authorized to operate physical retail stores at designated locations that allow for the sale of cannabis or cannabis products.
Micro License in maryland
Growers are authorized to operate within a maximum area of 10,000 square feet of indoor canopy or its equivalent, as determined by the division administration.
Processors are permitted to process up to 1,000 pounds of cannabis per year, as calculated by the division administration.
Dispensaries have the option to offer a delivery service for the sale of cannabis or cannabis products without a physical storefront, on the condition that the licensee employs no more than 10 employees.
Incubator Space License
An incubation space license grants the license holder the authorization to operate a facility where a Micro Licensee can establish and conduct their operations.
On–site Consumption License
An on-site consumption license grants the license holder the authority to operate a facility where individuals can engage in outdoor smoking, vaping, or cannabis consumption on the premises.
Maryland Cannabis License Application Process
Maryland will administer the selection process through two distinct lottery periods. The first round of the lottery is exclusively reserved for social equity applicants, while the second round is open to all applicants. It is important to note that you may submit a maximum of one application per license type and a maximum of two applications per round, allowing you to apply for two different license types during each round.
Regardless of the round, it is essential that your application meets the required qualifications to be considered for entry into the lottery.
The Administration will meticulously evaluate the following plans, which serve as minimum qualifications for participation in the lottery:
1. A comprehensive operational plan outlining the safe, secure, and efficient practices for cultivation, manufacturing, and/or dispensing of cannabis.
2. A well-developed business plan demonstrating your aptitude, experience, and the potential for success in the industry, as well as providing satisfactory and appropriate working conditions for employees.
3. A detailed diversity plan.
To be eligible for entry into the lottery, it is imperative to receive a passing score on all three plans mentioned above.
Round 1 Licensing
As previously stated, during Round 1, the Administration has the authority to allocate licenses specifically to social equity applicants, according to the predetermined number outlined below:
30 Grower licenses
30 Processor licenses
10 Dispensary licenses
20 Grower licenses
40 Processor licenses
80 Dispensary licenses
10 Incubator space licenses
Round 2 Licensing
ROUND 2 LICENSING
During Round 2, the licensing process will be accessible to all applicants seeking to enter the cannabis industry. It is important to acknowledge that the Administration may introduce corrective measures, informed by a disparity study, through the lottery system. If the study reveals no evidence of business discrimination against minority- and women-owned enterprises in the market, all applicants meeting the minimum requirements will be eligible for the lottery. The specific number of licenses available is as follows:
70 Grower licenses
70 Processor licenses
25 Grower licenses
25 Processor licenses
120 Dispensary licenses
10 Incubator space licenses
15 On-site consumption licenses
Application and Licensing Fees
The application fees for new adult-use cannabis business licenses are as follows:
$5,000 – Standard Licenses
$1,000 – Micro Licenses
$5,000 – On-site Consumption Lounge Licenses
Initial License Fee – $50,000
Renewal License Fee – the lesser of 10% of the standard cannabis licensee’s annual gross revenue, or $50,000
Next, let’s look at Social Equity applicants and the consideration of Disproportionately Impacted Areas in Maryland.
Maryland Cannabis Social Equity
The Office is responsible for determining the criteria to identify disproportionately impacted areas, which will determine the eligibility of applicants for a social equity license. According to Maryland’s adult-use law, social equity eligible applicants are residents of specific zip codes.
If an applicant has resided in a Maryland zip code with a cannabis use arrest rate that is 150% higher than the average rate in other zip codes statewide, they are considered eligible for prioritization as a social equity applicant. We will provide updates once the Office has released its official definitions.
Social Equity Applicant Definition
(1) HAS AT LEAST 65% OWNERSHIP AND CONTROL HELD BY ONE OR MORE INDIVIDUALS WHO:
(I) HAVE LIVED IN A DISPROPORTIONATELY IMPACTED AREA FOR AT LEAST 5 OF THE 10 YEARS IMMEDIATELY PRECEDING THE SUBMISSION OF THE APPLICATION;
(II) ATTENDED A PUBLIC SCHOOL IN A DISPROPORTIONATELY IMPACTED AREA FOR AT LEAST 5 YEARS; OR
(III) FOR AT LEAST 2 YEARS, ATTENDED A 4–YEAR INSTITUTION OF HIGHER EDUCATION IN THE STATE WHERE AT LEAST 40% OF THE INDIVIDUALS WHO ATTEND THE INSTITUTION OF HIGHER EDUCATION ARE ELIGIBLE FOR A PELL GRANT;
Step-by Step Guide from our Maryland Cannabis Consultants
PsyCann’s Maryland cannabis license consultants would like to offer a comprehensive, step-by-step guide on acquiring an adult-use cannabis business license in Maryland.
Step 1: Familiarize Yourself with Maryland’s Laws and Regulations
The initial and crucial step towards securing a license in Maryland is to thoroughly acquaint yourself with the laws and regulations governing the adult-use cannabis market. By doing so, you will gain a comprehensive understanding of the objectives and framework established for this industry in Maryland. It is advisable to review House Bill 556 and Senate Bill 516, which outline the pertinent regulations.
If you find yourself pressed for time and prefer not to delve into extensive documentation, we are here to assist you. Our team of experienced cannabis business license application writers has a proven track record of successful applications both domestically and internationally. This is precisely why step 3 involves engaging our esteemed Maryland cannabis consultants.
However, before proceeding, it is essential to determine the specific type of Maryland adult-use cannabis license that aligns with your business aspirations.
Step 2: Select an Appropriate Cannabis License Type
After familiarizing yourself with the outlined regulations, you should now determine the specific category of cannabis license that best aligns with your intended business activities. The licenses available are categorized into two primary types: standard and micro. It is essential to carefully consider your business model and objectives before making your selection.
Step 3: Leverage Cannabis Consultants
Harness the expertise of our reputable Maryland cannabis consulting firm to oversee your project at every stage, from pre-licensure to post-licensure and operational phases. Our comprehensive services encompass a wide range of essential components, including:
Crafting a robust cannabis business plan
Facilitating team recruitment
Collaborating on facility design
Providing operational support, including comprehensive Standard Operating Procedures for all activities
Conducting employee training, and more
PsyCann can help guide you through the entire process of establishing your business, ensuring a seamless journey from inception to completion.
Step 4: Form your business entity
If you require guidance on determining the most suitable business entity for your proposed operations, we recommend seeking the expertise of our Maryland cannabis consultants or consulting with a qualified attorney. It is crucial to select a business structure that aligns with the requirements and objectives outlined in Maryland’s Cannabis Reform law, particularly if you are applying as a social equity applicant. Feel free to contact our knowledgeable team of cannabis consultants for valuable assistance and support.
Step 5: Build a diverse and knowledgeable team
Building and managing a competent team is a crucial factor in the success of your application. Your dispensary’s triumph relies heavily on the expertise and dedication of your team members. It is imperative to carefully select individuals who possess extensive knowledge, experience, and genuine passion for the cannabis industry.
When assembling your team, it is important to consider hiring individuals with diverse backgrounds and skill sets. Seek out professionals with prior experience in areas such as retail, marketing, accounting, and security.
Step 6: Develop a winning business plan
The subsequent crucial step involves crafting a comprehensive business plan for your proposed adult-use cannabis business. This meticulously developed plan serves multiple purposes, such as assembling a competent team and fostering local backing.
Furthermore, it should effectively articulate your objectives and demonstrate the potential return on investment for prospective investors. A well-crafted business plan plays a vital role in securing the necessary capital throughout the application process. These funds are essential for covering expenses such as property acquisition, legal counsel, architectural services, consultancy, and ultimately, the successful launch of your business upon license acquisition.
Step 7: Raise the Capital needed
Acquiring a Maryland adult-use cannabis license requires a substantial investment of time, effort, and financial resources. While lottery outcomes may create an impression of chance, it is crucial to position your business effectively to meet the eligibility criteria for participation in the lottery. Demonstrating the financial viability of your venture is essential when seeking approval from the Administration.
If you currently lack the necessary capital for a successful cannabis business, our team can assist you in presenting your business proposition to potential investors in the cannabis industry. Additionally, our experienced Maryland cannabis consultants will ensure that your business entity and its funding comply with all relevant regulations and requirements.
Step 8: Choose a location to establish your cannabis business
In the initial stages, social equity applicants should carefully consider selecting a location in a disproportionately affected area. When determining the ideal site for your cannabis business, it is important to note that the Administration aims to distribute dispensary licenses evenly across counties, taking into account population and market demand.
Please note, the Administration considers market demand across jurisdictions. Our team of professional cannabis business consultants is available to assist you in identifying optimal location options that align with your business objectives and specific cannabis activities.
Step 9: Establish local community support
After identifying a suitable property and securing a location, it is essential to cultivate support from local organizations. A robust endorsement from local entities will enhance your merit-based application score.
Furthermore, PsyCann’s team of experienced Maryland cannabis consultants can assist you in establishing meaningful connections with local businesses, state agencies, and community non-profit organizations. Demonstrate how your cannabis business will contribute to their initiatives and bring positive change to the community. Showcase your commitment to being a responsible and considerate neighbor.
Step 10: Write and submit an application
Finally, the moment has arrived to draft and submit your cannabis business license application. As mentioned earlier, to participate in the lottery, you are required to submit the following:
With our team of highly skilled and accomplished cannabis license application consultants, who have consistently achieved success in securing licenses across the USA as well as internationally, we are confident in our ability to help you realize your marijuana business objectives. We are eager to engage in a conversation about your goals and work together to identify the most suitable business license for your specific activities.
Conclusions from our Maryland Cannabis Consultants
The application process demands meticulous writing and the creation of comprehensive operating procedures, which can consume countless hours of your time. Our team of Maryland cannabis consultants is here to streamline the process for you. By leveraging our expertise, we can handle the writing and compilation of your entire application, ultimately saving you valuable time and resources. With our experienced cannabis licensing team by your side, your chances of securing a license can be significantly enhanced.
Additional Information – Maryland Cannabis
Here is supplementary information along with relevant resources for marijuana businesses in Maryland.
Vertical integration is permitted within the regulations.
However, there are specific limitations on ownership or ownership interest, as follows:
You can own or have ownership interest in only one cultivation license.
You can own or have ownership interest in only one processor license.
You can hold no more than four permits for retail.
If you possess an incubator space license, the limit is two licenses. Similarly, if you hold an on-site consumption license, the limit is also two licenses.
Moreover, in accordance with the regulations, if you possess an incubator space or an on-site consumption license, it is prohibited to have ownership or any ownership interest in any other cannabis license within the state of Maryland. For additional clarification, we encourage you to contact our team of professional Maryland cannabis consultants.
Transfer of Cannabis Business Licenses
Newly issued cannabis licenses, including those converted from medical to dual cannabis licenses, are subject to certain limitations. Specifically, licensees are prohibited from transferring any ownership or control of the license for a minimum period of five years from the time of licensure, except in the event of the death of an owner. It is worth emphasizing that this limitation on license transfer is supplementary to the current three-year blackout period applicable to operational medical marijuana businesses within the medical program. For more information, please consult with our team of professional advisors.
Expungable under the law
Under the legislation, the Administration is mandated to establish a formal process for expunging criminal cases that solely involve possession of less than 10 grams of cannabis, along with other relevant expungement provisions. This ensures compliance with the law and upholds the principles of justice and fairness.
Tax rate imposed on cannabis
The Maryland cannabis bill establishes a taxation framework where the sale of cannabis is subject to a 6% tax rate, equivalent to the state’s sales tax. Additionally, provisions are in place to gradually increase the tax rate to 10% by 2028. It’s important to note that the taxation applies solely to the point of sale to consumers and does not encompass producers and growers.
Furthermore, the Maryland adult-use cannabis law introduces three new funds with specific purposes.
The Public Health Fund which aims address health-related effects associated with legalizing adult cannabis use.
The Cannabis Business Assistance Fund is designed to support and promote increased participation in the cannabis industry for woman, minorities, and small businesses.
The Community Reinvestment and Repair Fund aims to allocate funds to communities that have been disproportionately impacted by cannabis prohibition and enforcement. A substantial portion, 35% of the total cannabis tax revenue, will be directed towards this fund, ensuring a focus on community reinvestment and repair.
Maryland has implemented provisions to prioritize social equity, recognizing the significant role of unions in promoting social equity and enhancing the overall prosperity and welfare of workers, particularly those from marginalized communities. It is crucial to carefully consider the structure of your business plan to align with Maryland’s commitment to upholding labor rights and fostering a supportive environment for workers.
Additional resources for Maryland
Historic information of Maryland’s timeline of key dates, reports and studies on the path to legalization
Maryland Medical Cannabis Laws
Maryland Cannabis Administration
Information from the Maryland Medical Cannabis Commission for Industry Licensees and Registrants
Alcohol, Tobacco, and Cannabis Commission
FAQ regarding Adult-Use Cannabis legalization within Maryland