Maryland Officially Launches its Commercial Adult Use Market!

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The State of Maryland’s Adult Use Cannabis Market opened up on July 1st, 2023, with a total of 95 medical dispensaries and 42 medical cannabis cultivators and processors successfully transitioned into the adult-use market. The Maryland market is already recording new record sales, with $87.4 million in sales recorded in the first month alone and $92 million in the second.

For new entrants into Maryland’s cannabis market, the State of Maryland’s Office of Social Equity opened its Social Equity certification portal Friday, September 8^th, 2023, which will remain open for 60 days until November 7^th, 2023. Applicants will be able to apply for the first round of cannabis licenses for adult-use in Maryland, including standard licensing and microbusiness (restricted scale) licenses. The Maryland Cannabis Administration will oversee the verification process and the license application process, with the first round exclusively reserved for “social equity” applicants. Applicants may only file two total applications, and one per license type, per round so there is not much room for error.

A social equity applicant is defined as an entity that is at least 65% owned and controlled by one or more individuals who meet at least ONE of the following criteria:

1.     Resided in a disproportionately impacted area for at least five of the last 10 years prior to submitting the application. A disproportionately impacted area is defined as an area with cannabis possession charges exceeding 150% of the state's 10-year average.

Disproportionately Impacted Areas

2.     Attended a public school in a disproportionately impacted area for at least five years.

Public Schools in Disproportionately Impacted Areas

3.     Spent a minimum of two years attending a four-year higher education institution in Maryland where at least 40% of the attendees received a Pell Grant. The eligible institutions include Bowie State University, Coppin State University, Morgan State University, University of Baltimore, University of Maryland Eastern Shore, and Washington Adventist University.

Higher Education Institutions Eligible

The Office of Social Equity's website provides a map of those three criteria for a complete and comprehensive tool for prospective applicants to use.

Maryland Map (see bottom of linked page)

In addition to meeting the social equity applicant criteria, all applicants must submit an application that includes a detailed operational plan, a business plan, and a detailed diversity plan. Each must be tailored to the specific license the applicant is applying for. Maryland offers opportunities for applicants to establish cannabis businesses through either a standard or micro license category, with each category separately licensing cultivation, processing, and dispensing activities. Micro licenses are tailored for smaller business applicants, ensuring compliance with legal limitations on cannabis production and processing. Additionally, micro dispensaries will not have a store front but will instead provide delivery services to cater to the needs of adult-use cannabis consumers.

Licensing will be limited as follows:

Round 1 standard licenses:

·        20 grower licenses (up to 300,000 square feet of canopy indoors or 1.2 million square feet outdoors)

·        40 processor licenses

·        80 dispensary licenses

Round 1 micro licenses:

·        30 grower licenses (under 10,000 square feet indoors or under 40,000 square feet outdoors)

·        30 processor licenses (<1,000 pounds/year)

·        10 dispensary licenses (no storefront and have 10 or fewer workers)

There will also be an issuance of 10 incubator space licenses, which must be run by non-profits.

It is crucial for interested applicants to be prepared and ready to submit their applications early to take advantage of being among the State’s first movers. Successful completion of the form and achieving a perfect score on the assessment will result in receiving a personalized link to the portal. Anyone who meets these requirements, and who passes a minimum threshold on an associated Maryland cannabis licensing application, will be entered into a lottery, with results expected by January 1^st, 2024.

The lottery process itself is also a bit complicated in that it will be by region, with a certain number of licenses granted for each. This means lottery participants are only competing with others in the same region, but that the odds of a win will differ based on geographical location. While you won’t be required to have a facility when you apply, the region you win in will be the only region where you can operate your license.

For retail, the regions are:

Jurisdiction	Number of Standard Dispensary Licenses Available
Allegany	1
Anne Arundel	5
Baltimore	6
Baltimore City	11
Calvert	3
Caroline	1
Carroll	2
Cecil	2
Charles	2
Dorchester	1
Harford	3
Howard	3
Frederick	3
Garrett	1
Kent	1
Montgomery	9
Prince George's	9
Queen Anne's	1
St. Mary's	2
Somerset	1
Talbot	2
Washington	3
Wicomico	2
Worcester	1
Total	75

For the remaining license types, the State will be divided into four regions, as follows:

● Western Region: Allegany, Carroll, Frederick, Garrett, Montgomery, and Washington.

● Southern Region: Anne Arundel, Calvert, Charles, Prince George's, and St. Mary's.

● Central Region: Baltimore, Baltimore City, Cecil, Harford, and Howard.

● Eastern Region: Caroline, Dorchester, Kent, Queen Anne's, Somerset, Talbot, Wicomico, and Worcester.

Equal numbers of each of the remaining license types will be available, as outlined below.

License Category	License Type	Number of Licenses Available per Region	Total Licenses Available in Maryland Round 1
Standard	Cultivator	4	16
Standard	Processor	8	32
Micro	Cultivator	6	24
Micro	Processor	6	24
Micro	Dispensary	2	8

This first mover advantage may be crucial as State law requires a significant pause between the first and second application rounds to conduct a market demand study on cannabis in the state. The second round, currently expected to open sometime in May 2024, will also include both standard and micro cannabis licenses for dispensing, processing, and cultivation, as well as on-site consumption licenses. Standard cannabis licenses will be available to all, however micro licenses will remain restricted to social equity owned businesses as in the first round. During subsequent rounds, the allocation of licenses will be determined through market demand studies. It is crucial to keep in mind that the total number of licenses issued cannot surpass the caps set forth in the bill.

Please contact us at Global Go to learn more information and to see if a Round One Maryland Adult-Use Cannabis License is the right investment for you!

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