Maryland Sets Path for Regulated and Equitable Adult-Use Cannabis Sales

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Maryland Sets Path for Regulated and Equitable Adult-Use Cannabis Sales

On May 7th, 2023, Maryland Governor Wes Moore signed Senate Bill 516 into law, paving the way for regulated and equitable adult-use cannabis sales in the state. The legislation sets out a framework for regulating the cultivation, distribution, and sale of recreational cannabis, with licensed sales set to begin on July 1st, 2023.

The bill was approved by state legislators in April, following extensive negotiations that covered topics like social equity and taxation. During the signing ceremony for the legislation, Governor Moore emphasized the importance of ensuring that the legalization of marijuana benefits low-income and communities of color in a significant way. He acknowledged the damage caused by the past criminalization of marijuana and expressed his hope that the new law would guarantee a fair distribution of opportunities to introduce recreational cannabis in the state.

The passing of Senate Bill 516 also creates a structure for regulating recreational marijuana in Maryland. The legislation involves the formation of a new division for regulation and enforcement under the existing Alcohol and Tobacco Commission, which will be renamed the Alcohol, Tobacco, and Cannabis Commission. The newly established Maryland Cannabis Administration will regulate the program.

Under the new law, individuals aged 21 and over will be able to possess a maximum of 1.5 ounces of cannabis and cultivate up to two cannabis plants at home. A tax rate of 9% will be applied to recreational cannabis sales, while medical marijuana sales will be excluded from this tax. A community reinvestment fund will receive 35% of the revenue from marijuana taxes, while a Cannabis Public Health Fund, Counties, and a Cannabis Business Assistance Fund will each receive an additional 5%.

One of the most notable provisions of the new law is its emphasis on social equity in the cannabis industry. The first licenses granted will be reserved for social equity applicants, who must meet specific qualifications to be eligible. The applicant must have at least 65% ownership by an individual who has lived in a “disproportionately impacted area” for five of the last ten years or attended a public school in such an area. Starting in 2025, Maryland will allocate $5 million annually for grants to existing medical cannabis dispensaries that form “meaningful partnerships” with social equity applicants. These partnerships must include training, mentorship, or shared business space.

The new law also provides for the automatic expungement of past convictions for activities that are now legal. Individuals currently serving sentences for such offences are eligible for resentencing. Those with convictions for possession with intent to distribute can petition for expungement three years after completing their sentences.

Overall, Maryland’s new law sets a path for a regulated and equitable adult-use cannabis market in the state. With an emphasis on social equity, taxation, and regulation, the state is taking a responsible and progressive approach to cannabis legalization. As licensed sales begin on July 1st, 2023, the eyes of the cannabis industry will be on Maryland, watching to see how the state’s new market develops and evolves.