Maryland's recreational marijuana bill will open marketplace in July, allow for pot cafés
Maryland lawmakers unveiled the long-awaited bill outlining how the state will structure its recreational marijuana market in the coming months.
The bill, 88 pages long, allows state-licensed shops to sell recreational cannabis to consumers 21 years old and older starting on July 1.
The bill sets standards for how marijuana will be sold, regulated, grown and processed in Maryland. It also lays out how commercial licenses will be allocated and creates a fund to help minority-owned businesses.
“I feel very good about the bill,” said State Sen. President Bill Ferguson, Democrat who represents Baltimore City, during a press conference last week. “I think it has the possibility of being a national model.”
That concept of a ‘national model’ could range from how other states with fresh cannabis legalization laws on the books build new markets or shape markets if cannabis was legalized by the federal government someday, Ferguson said.
As it stands, cannabis is legal on a state-by-state basis, but still illegal across state lines on a federal level.
The proposed sales tax on recreational marijuana will not exceed 6%, but may increase up to 10% by 2028, according to the bill.
The Maryland legislation affords licenses for 75 growers, 100 processors and 300 dispensaries for recreational marijuana.
It also creates more “micro-licenses” for small, boutique enterprises that operate under different rules. Micro-growers, for instance, can’t operate in a space larger than 10,000 square feet and will not be able to produce more than 1,000 pounds a year.
The bill also allows for on-site consumption spaces, something many other states don’t permit. There will be 15 licenses dispensed for those spaces, which allow people to consume pot in a communal setting like a café.
Maryland lawmakers are racing to the July 1 finish line to get its market set up.
Once recreational marijuana is legal in a few months, state lawmakers want to incentivize residents to buy from state-regulated shops to keep black market sellers and shops that operate in the gray areas of the law from taking a foothold.
“We've seen what's happened in places like New York where there are over 1,400 unlicensed dispensaries,” Ferguson said. “The idea of having a thoughtful marketplace has really evaporated in New York because there's been such a delay in doing the legal licensing.”
Instead of state-licensed dispensaries, New York City leaders are dealing with bodegas that “gift” pot when someone buys a product like a mug or shirt. Those stores make it hard for the state to regulate marijuana.
One of the largest hurdles is ensuring minority- and women-owned businesses get a fair share of the pie when it comes to getting a license, lawmakers said.
The bill sets up an Office of Social Equity to “promote and encourage full participation in the regulated cannabis industry by people from communities that have previously been disproportionately harmed by the War on Drugs in order to positively impact those communities.”
The office will offer free technical assistance to business applicants and make recommendations on how to better the process.
The legislation also sets up a Cannabis Business Assistance Fund, which will provide loans to those businesses trying to get off the ground. The Office of Social Equity will make determinations on who gets those loans.
Growers, processors and dispensaries that currently sell medical marijuana may sell recreational pot once they pay a one-time conversion fee between $100,000 and $2.5 million depending on the revenue brought in by the company.
Marylanders will consume 1.8 million pounds of marijuana a year, according to a recent study from Cannabis Public Policy Consulting, a research group that’s helping inform the Maryland legislature about marketplace decisions.
“The linear growth suggested that the sales will hit $240 million per month, pretty rapidly,” Michael Sofis, director of research at Cannabis Public Policy Consulting, told the House Cannabis Referendum and Legalization Workgroup in January. “It shows is there's a lot of variability, in a good way, a lot of room for growth and that's that first six months.”
The House of Delegates will have a hearing on the marketplace bill on Feb. 17.