Adult-use cannabis in Maryland was signed into law on May 3, 2023, by Governor Wes Moore! The first legal recreational sales will begin July 1, 2023. Would you like to open one of the first legal adult-use cannabis businesses in Maryland? Schedule a consultation with our Maryland cannabis consultants today!
In the article below, we present a step-by-step guide on applying for and winning a Maryland cannabis business license. But first, let’s discuss the Maryland cannabis program and the application process itself.
Social Equity Verification Site: Here
Qualifying Zip Codes: Here
List of Qualifying Public Schools: Here
List of Qualifying Higher Education Schools: Here
The social equity verification window opens on September 8, 2023, and closes on November 7, 2023.
Laws and Regulations
Secondly, become familiar with the governing bodies of the new adult-use program. The Maryland Cannabis Administration (the “Administration”) will regulate both medical and adult-use cannabis and licensing. The Administration will work in tandem with the re-named Alcohol, Tobacco, and Cannabis Commission, which will also house the Office of Social Equity (the “Office”). The Office will promote participation by people from communities that have been disproportionately impacted by the war on drugs.
On July 1, 2023, sales will begin exclusively from existing medical cannabis licensees who pay a conversion fee to cultivate, manufacture, and dispense cannabis to the adult-use market. Thereafter, Maryland will begin issuing adult-use cannabis licenses to new applicants, as detailed below.
September 2023: Round 1 begins! This is a 30-day application period for individuals and businesses to apply for a standard or micro cannabis licenses and is limited to social equity applicants.
November 2023: The Administration reviews the application submissions and conducts outreach to applicants as necessary to complete the review. Chiefly, it will determine whether an applicant meets the minimum qualifications for the lottery on a pass-fail basis.
January 1, 2024: The Administration notifies selected Round 1 applicants of award.
May 2024: The Administration announces Round 2 for standard and micro cannabis licenses, including on-site consumption licenses.
Are you ready to get started? Enlist the help of our expert marijuana consultants in Maryland! In the meantime, read below for an overview of the types of licenses.
Types of Adult-use Cannabis Business Licenses in Maryland
Maryland will issue five types of adult-use cannabis business licenses:
- Grower (maximum of 75 standard and 100 micro)
- Processor (maximum of 100 standard and 100 micro)
- Dispensary (maximum of 300 standard and 10 micro)
- Incubator Space (maximum of 10)
- On-Site Consumption Lounge (maximum of 5)
Each license can be either a “Standard” or “Micro” license. Also, all micro licenses are limited to social equity applicants. Micro dispensary licenses, also awarded by region, will only be authorized to conduct deliveries within the region in which they have been awarded.
Distribution of Standard Dispensary Licenses can be found in the below image:
Distribution of Growers, Processors, and Micro Licenses can be found in the below image:
- For Growers, to operate more than 10,000 square feet, but not more than 300,000 square feet, of indoor canopy or its equivalent.
- For Processors, to process more than 1,000 pounds of cannabis per year.
- For Dispensaries, to operate a store at a physical location that sells cannabis or cannabis products.
- Growers, to operate not more than 10,000 square feet of indoor canopy or its equivalent, as calculated by the division administration;
- Processors, to process not more than 1,000 pounds of cannabis per year, as calculated by the division administration; and
- Dispensaries, to operate a delivery service that sells cannabis or cannabis products without a physical storefront, provided that the licensee employs not more than 10 employees.
Incubator Space License
Authorizes the holder of the license to operate a facility within which a Micro Licensee may operate.
On–site Consumption License
Authorizes the holder of the license to operate a facility on the premises of which individuals can smoke outdoors, vape, or consume cannabis.
The state will administer the decisions through two lottery periods. The Round 1 lottery will be for social equity applicants only; Round 2 is open to the general public. In each case, you are limited to submitting:
- a maximum of one application per license type; and
- a maximum of two applications in any round (i.e., you can apply for two license types per round).
Regardless, your application must meet the qualifications to be entered into the lottery.
The Administration will evaluate the following plans as the minimum qualifications required to enter the lottery:
- A detailed operational plan for the safe, secure, and effective cultivation, manufacture, and/or dispensing of cannabis.
- A business plan demonstrates sufficient business ability and experience, the likelihood of your success, and satisfactory and appropriate employee working conditions.
- A detailed diversity plan.
You must receive a passing score on all three plans above to enter the lottery.
Round 1 Licensing
As mentioned earlier, Round 1 is limited to social equity applicants, and the Administration may award up to the following number of licenses:
- Standard licenses:
- 20 Grower licenses
- 40 Processor licenses
- 80 Dispensary licenses
- Micro licenses:
- 30 Grower licenses
- 30 Processor licenses
- 10 Dispensary licenses
- 10 Incubator space licenses
Round 2 Licensing
Round 2 will be open to all cannabis business applicants. However, the Administration may determine that the lottery system employs remedial measures established in accordance with a disparity study. If it is determined there is no basis in evidence of business discrimination against firms owned by minorities and women in the market, then all applicants who meet the minimum qualifications will be entered into the lottery. The number of licenses is capped as follows:
- Standard licenses:
- 25 Grower licenses
- 25 Processor licenses
- 120 Dispensary licenses
- Micro licenses:
- 70 Grower licenses
- 70 Processor licenses
- 10 Incubator space licenses
- 15 On-site consumption licenses
Next, let’s look at the application fees for Maryland adult-use cannabis business 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.
The Office is assigned to define what constitutes a disproportionately impacted area, so that applicants will know whether they are eligible to apply for a social equity license. Basically, for the purpose of cannabis businesses, the Maryland adult-use law defines social equity eligible applicants by the zip code of their residency.
In other words, if the applicant has been a long-term resident in a Maryland zip code that has had, for example, a 150% arrest rate for cannabis use compared to the normal rate of arrests in other zip codes statewide for cannabis use, the applicant is considered eligible for prioritization as a social equity applicant. We will update this page when the Office has released its 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
Below, our Maryland cannabis license consultants provide a step-by-step guide on how to obtain an adult-use cannabis business license.
Step 1: Read the Laws and Regulations
The first step to winning a license in Maryland is to read its Laws and Regulations. Doing so will give you an overall idea of the goals and framework for the adult-use cannabis market in Maryland. Therefore, read House Bill 556 and Senate Bill 516.
Don’t have time to review hundreds of pages? We already have! Our cannabis business license application writers have submitted successful cannabis applications across the country and the world. That is why step 3 is to bring in our Maryland cannabis consultants.
But before that, you should choose the type of Maryland adult-use cannabis license you would like to apply for.
Step 2: Choose a license type
Having read through the proposed regulations, you may already know what type of cannabis activities you want to engage in. Licenses will be capped and divided into two main categories – standard and micro. Choose the license type that fits your business model.
Step 3: Engage our Maryland cannabis consultants
- Development of your cannabis business plan,
- Team recruitment,
- Facility design,
- Operational support, including Standard Operating Procedures for all activities,
- Employee training, and more.
We can help you set up your business from start to finish, including raising capital. For that, you need to form your business entity.
Step 4: Form a business entity
If you are unsure what type of business entity would work best for your proposed operations, engage our Maryland cannabis consultants or work with an attorney to choose the best structure for your business. If you are applying as a social equity applicant, you must structure your business to fulfill the requirements and intention of Maryland’s Cannabis Reform law. Contact our cannabis consultants for assistance!
Step 5: Build a team with the help of our Maryland cannabis consultants
With our team talent acquisition services, you will be pleased with how we can help you put together the ideal team for the approval of your business license. Reach out today for more information about our personalized business application and consulting services.
Step 6: Develop a business plan
The next step is to develop a solid business plan for your proposed adult-use cannabis business. Your business plan helps you build your team and garner local support.
Moreover, it should clearly communicate your goals and the return on investment for investors. A good business plan can help raise you the capital needed during the application process to pay for property, attorneys, architects, consultants, and to launch your business if awarded a license.
Step 7: Raise Capital with the assistance of our Maryland cannabis consultants
First of all, winning a Maryland adult-use cannabis license will require a great deal of time and energy. It also requires money. Lottery decisions may make it sound like winning a license is a roll of the die, but first you must position yourself to even be in the lottery! Make sure that your business shows it is financially viable to the Administration.
If you don’t already have the capital necessary for a successful cannabis business, we’ll help you pitch your business to cannabis industry investors. In addition, our expert Maryland cannabis consultants will ensure that your business entity and its funding are compliant.
Next, we’ll discuss the importance of facility location.
Step 8: Choose a location
First, choosing a location in a disproportionately affected area is a consideration for social equity applicants. When seeking a location for your cannabis business, keep in mind that the Administration will issue dispensary licenses in a manner that encourages a balanced geographic distribution based on population and market demand within a specific county.
Also, the Administration will consider cross-jurisdictional market demand. Our cannabis business consultants can help you pursue the best location options, tailored to facilitate your business goals and cannabis activities.
Step 9: Garner local support
Once you’ve identified property and your location, you can begin building support from local organizations. Strong local support will help you score higher on your merit-based application.
In addition, our Maryland cannabis consultants can help you build relationships with local businesses, state and community non-profits. Show how your cannabis business will support their efforts and positively impact your community. Show how you will be a good neighbor.
Now, onto the most important step to win a cannabis business license in Maryland!
Step 10: Write and submit an application
At last, it’s time to write and submit your application. As described above, to enter the lottery, you must submit
- Diversity plan,
- Business plan, and
- Operational plans.
Our cannabis license application consultants have years of experience winning cannabis licenses in over 27 states and across the globe in 6 countries. Let’s discuss your marijuana business goals and find the right business license for your activities!
Conclusions from our Maryland cannabis consultants
As you can see, the application will require hundreds of hours of detailed writing as well as the development of formal operating procedures. Our Maryland cannabis consultants can help you write and assemble the entire application, saving you time and money. With an experienced cannabis licensing team on your side, you can significantly improve your odds of winning a license.
Why not let us make it simple for you? Schedule a call with us today to discuss your Maryland adult-use cannabis business plans!
APPENDIX | Additional Information
Below, you’ll find additional information as well as links to marijuana business resources in Maryland.
First of all, vertical integration is allowed.
However, you are limited to owning or having ownership interest in no more than:
- one cultivation license,
- one processor license, and
- no more than four permits for retail.
If you own an incubator space license, you are limited to two licenses. Similarly, if you own an on-site consumption license, you are limited to two licenses.
If you own an incubator space or an on-site consumption license, you cannot own or have an ownership interest in any other cannabis license in Maryland. Contact our Maryland cannabis consultants for further clarification.
Transfer of Licenses
Another key point, newly issued cannabis licenses, as well as licenses that are converted from medical to dual cannabis licenses, have limitations. Explicitly, licensees cannot transfer any ownership or control of the license for at least five years following licensure, except for the death of an owner. Additionally, this license sale prohibition could be in addition to the three-year blackout period that existed for operational medical marijuana businesses under the medical program.
Expungable under the law
The legislation requires that the Administration setup a process to expunge criminal cases in which possession of less than 10 grams of cannabis is the only charge, along with additional expungement provisions.
Tax rate imposed on cannabis
First, the Maryland bill allows the state to tax the sale of cannabis at a rate of 6% (the same as the state’s sales tax). Also, it provides measures to increase the tax rate up to 10% by 2028. However, Maryland will only tax cannabis at the point of sale to consumers, and not upon producers and growers.
Also, the Maryland adult-use cannabis law creates three new funds:
- Public Health Fund to address health effects related to legalizing adult cannabis use.
- Cannabis Business Assistance Fund to increase participation in the cannabis industry by small, minority and women-owned businesses.
- Community Reinvestment and Repair Fund, which will provides funds to the traditionally affected communities disproportionately impacted by cannabis prohibition and enforcement. 35% of total cannabis tax revenue will go to this fund.
Basically, Maryland has initiated provisions to address social equity, based on the understanding that unions are an important foundation in building social equity and raising general wealth and well-being for workers (particularly for workers of color). For that reason, pay attention to how you structure your business plan to account for Maryland’s emphasis on the importance of labor rights.
Additional resources from our Maryland marijuana consultants
Information from the Maryland Medical Cannabis Commission for Industry Licensees and Registrants
Historic information of Maryland’s timeline of key dates, reports and studies on the path to legalization