Cannabis License Types and Timelines in Maryland Adult-Use Regulation Bill Awaiting Governor's Signature

By Jen Flanagan, Meg Nash, Sam Kovach-Orr

Apr 12, 2023

Roughly two months after the introduction of cross-filed bills relating to regulating adult-use cannabis in Maryland, HB556 and SB516, the General Assembly passed a final version of the bill and sent it to Gov. Wes Moore for his signature. The House Economic Matters Committee and the Senate Finance Committee worked diligently to reconcile language passed by the House and Senate and get it to Gov. Moore’s desk, as the July 1 target date to begin adult-use sales is just a few months away. While Gov. Moore has yet to sign the final bill into law, he is expected to sign it within the thirty days required. Read on for highlighted proposed provisions affecting current and future Maryland cannabis licenses, including license types and timelines. For a deep dive into Maryland cannabis implementation and opportunities, make sure to register for our upcoming webinar.

Current Maryland Medical Cannabis Licensees

Current medical licensees are expected to become eligible for hybrid licensure on or before July 1 of this year. The two chambers debated over whether to restrict ownership in multiple dispensaries to two or four and, ultimately, it was determined that the existing four-dispensary cap from the medical program will remain in place. Existing licensees will be required to pay a one-time conversion fee based on annual revenue from 2022.

First Licensing Round for New Cannabis Licensees

The state's first adult-use licenses are expected to start to be issued on or before January 1, 2024, with an application process likely to commence in the fall of 2023. The following number and type of licenses are available:

Standard licenses: 20 grower, 40 processor, and 80 dispensary
Micro licenses: 30 grower, 30 processor, and 10 dispensary
10 Incubator Space licenses

The first-round licenses are expected to be exclusively reserved for social equity candidates. To qualify as a Social Equity Applicant, 65% ownership and control must be held by one or more individuals who:

Have lived in a disproportionately impacted area (DIA) for 5 of the 10 years prior to application submission;
Attended a public school in a DIA for at least 5 years;
Have for at least two years attended a 4-year institution of higher education in the state where at least 40% of the individuals who attend said institution are eligible for a Pell Grant; or
Meet other criteria to be established by the Commission based on the results of a disparity study.

Second Licensing Round for Maryland Cannabis Licensees

The second round of licensing may be opened to general applicants. However, this will ultimately depend on the outcome of a disparity study, which will determine whether there is a compelling interest to implement remedial measures to assist minorities and women in the cannabis industry. During the second round of licensing, micro-licenses will only be available to social equity applicants.

The second licensing round is expected to begin on or after May 1, 2024, and is expected to result in the award of the following licenses:

Standard licenses: 25 grower, 25 processor, and 120 dispensary licenses
Micro Licenses: 70 grower, 70 processor; and 190 dispensary micro licenses
10 incubator space licenses
15 on-site consumption lounge licenses

The Maryland Cannabis Administration May Award Additional Licenses

The Maryland Cannabis Administration is authorized to award additional licenses as needed in accordance with a market demand study and may reserve some or all of the additional licenses for social equity or minority business applicants based upon the disparity study.

Start Preparing Now for Maryland Cannabis Business Licensing

Considering the likely short turnaround time between the July 1, 2023 and January 1, 2024 license issuance deadlines for current medical licensees and first-round adult-use licensees, respectively, individuals seeking to take advantage of these Maryland cannabis licensing opportunities should start preparing now.

Vicente LLP is already helping clients plan for these monumental opportunities and will continue to actively monitor developments in the law. Please contact us for assistance in achieving your goals in this new cannabis market. Whether it be corporate formation, licensing, community outreach, real estate or regulatory compliance, our team is ready to assist.

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