Maryland’s Adult-Use Cannabis Market is Open for Business

Foley Hoag LLP - Cannabis and the Law

Foley Hoag LLP - Cannabis and the Law

With more than $10 million in retail sales during its opening weekend and more than $20 million in retail sales during the first week, Maryland’s adult-use cannabis market is open for business. Nearly 100 of Maryland’s existing medical cannabis dispensaries and 42 cultivators and manufacturers converted their licenses to now serve both medical patients and adult consumers, but this is just the beginning and new licenses are about to be available.

Starting with Round 1 this fall, Maryland is going to issue additional licenses to applicants interested in expanding their existing operations and applicants interested in starting new operations. Round 1 will consist of a 30-day application period for standard or micro cannabis licenses and the Maryland Cannabis Administration (MCA) may award up to the following number of licenses in each category:

  • For standard licenses:
    • 20 grower licenses
    • 40 processor licenses
    • 80 dispensary licenses
  • For micro licenses:
    • 30 grower licenses
    • 30 processor licenses
    • 10 dispensary licenses
  • 10 incubator space licenses

Given the limited number of available licenses, interested applicants need to make preparations now to put themselves in the best possible position to qualify for the new licenses. Applicants should be forming their corporate entities, preparing their business plans and gathering their team to have a compliant application ready to go when the application window opens. For example, Round 1 will only be available to applicants that qualify as social equity applicants. 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 at least five of the past 10 years;
  • Attended a public school in a disproportionately impacted area for at least 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.

The MCA will release a map of disproportionately impacted areas and associated zip codes in Maryland in the coming weeks and the MCA will offer a pre-certification process for applicants to confirm that they qualify as a social equity applicant, but the window for pre-certification will be short and applicants will not have long to cure if they don’t qualify.

The MCA expects to launch Round 2 of the new license applications in May 2024 or later, so businesses and individuals that participate in Round 1 will have a significant head start. Interested applicants who can qualify for Round 1 are encouraged to put their applications together now and not wait for Round 2.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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