Maryland Lawmakers Send Marijuana Sales Regulation Bill To Governor, Setting Stage For Legalization To Take Effect
Maryland House and Senate lawmakers have resolved differences between a pair of bills to regulate marijuana sales, sending the legislation to the governor’s desk and setting the stage for statewide legalization.
Legislators have worked quickly to get the cannabis regulatory legislation in place before the state’s voter-approved legalization law takes effect in July, and now the plan will go before Gov. Wes Moore (D), who has indicated he will sign it into law.
The bills as introduced earlier this session were identical, but they were amended in certain different ways throughout the committee process as they advanced. On Friday, the House Economic Matters Committee and the Senate Finance Committee took up the opposite chamber’s measure and approved reprints to align the text. After floor debates and votes on either side of the Capitol, the legislation received final passage on Saturday.
“It’s our job. We have to have a regulated market,” House Economic Matters Committee Chairman C. T. Wilson (D) said on the floor ahead of the vote on final passage on his chamber’s bill. “This is not the perfect vehicle, but it’s best we can do with the information that we’ve had… We want to make sure that we create the access that we can and that we on July 1 can fulfill our duty to our citizens who apparently wanted recreational marijuana.”
Some of the most significant differences that have now been ironed out concern the tax rate for marijuana products and the regulatory body that will be responsible for overseeing the market, both of which were resolved in favor of Senate-passed provisions, but there were also other more modest compromises that got the legislation into final shape.
“We’ve all taken in the information that’s available from other states and some experiences that we’ve had here,” Senate Finance Committee Chair Melony Griffith (D) said. “We have great expertise here in Maryland, with our medicinal cannabis program, and have had tremendous success. So all of those ingredients, if you will, have been rolled into what now is our cannabis framework.”
Here’s an overview of the Maryland marijuana regulations bills, SB 516 and HB 556, as reconciled:
Cannabis would be taxed at nine percent. Medical marijuana sales would be exempt from the tax.
Thirty-five percent of marijuana tax revenue would go toward a community reinvestment fund, with counties, a Cannabis Public Health Fund and a Cannabis Business Assistance Fund each getting another five percent. The five percent in revenue that goes to the counties would then be divided up, with 50 percent going to local municipalities based on marijuana sales at retailers based in those jurisdictions.
A new, independent Maryland Cannabis Administration would be responsible for regulating the program.
Existing medical cannabis dispensaries would be converted into dual licensees at the same time that legalization takes effect on July 1 if they’ve paid a fee.
Regulators would need to start approving additional marijuana business licenses by July 1, 2024.
Ultimately, there would be a licensing cap for 300 dispensaries, 100 processors and 75 growers. For smaller microbusinesses there would be a limit of 10 dispensaries, 100 processors and 100 growers.
Social equity applicants would need to have 65 percent ownership by people who have lived in disproportionately impacted areas for at least five of the past 10 years, attended public school in such an area for at least five years or meet other criterial based on a disparity study.
A Capital Access Program would be created under the state Department of Commerce to promote industry opportunities for social equity applicants and provide low-interest loans.
The bill stipulates that, starting in 2025, $5 million would be appropriated annually for grants to existing medical cannabis dispensaries that form “meaningful partnerships” with social equity applicants that involves mentorship, training and/or shared business space.
The legislation would end sales of delta-8 hemp products on the broad market, instead requiring that any intoxicating cannabis products be done through licensed marijuana businesses.
Localities could not impose additional taxes, nor could they prohibit existing medical cannabis businesses that convert to dual licenses from operating in their area.
Medical cannabis patients would be able to grow up to four plants for personal use, rather than two under the current law. They would not have to pay taxes on medical marijuana products.
New dispensaries could not be located within 500 feet of a school, childcare facility, playground, recreational center, library or public park. Dispensaries would have to be separated from one another by at least 1,000 feet.
The conversion fee for existing medical cannabis businesses to become dual licensees would be 10 percent of gross income from growers and processors (with a $2 million cap) and eight percent of gross revenue for dispensaries with the same cap.
Single business entities could not own more than four dispensaries.
At least 25 percent of shelf space in dispensaries would need to be reserved for cannabis products from social equity licensees.
There would be a 10-license cap on microbusinesses, without language allowing regulators to authorize more in the future.
Smoking would not be permitted indoors at on-site consumption facilities, but people could do so on outdoor patios at licensed facilities.
Dispensaries would be permitted to repackage products.
Regulators would need to create rules for internet marijuana sales by July 2025.
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Because the bills are considered emergency legislation that would take effect immediately, they must be approved with three-fifths of the vote in both chambers to be enacted. Under the voter-approved referendum, legalization of possession of up to 1.5 ounces of cannabis takes effect on July 1, putting pressure on lawmakers to get regulations in place for commerce.
A spokesperson for the governor told The Baltimore Banner that the governor considers the proposal “a well-crafted piece of legislation and is looking forward to future collaboration with the legislature.”
The bill is partly a product of extensive work from bipartisan and bicameral lawmakers who were part of House Cannabis Referendum and Legalization Workgroup, which was formed in 2021 by Speaker Adrienne Jones (D).
Members have held numerous meetings to inform future regulations following Maryland voters’ approval of a legalization referendum during last year’s election, which triggered the implementation of complementary legislation covering rules for basic policies like possession and low-level home cultivation.
In addition to legalizing the purchase and possession of up to 1.5 ounces of cannabis for adults starting this summer, the legislation will also remove criminal penalties for possession of up to 2.5 ounces. Adults 21 and older will be allowed to grow up to two plants for personal use and gift cannabis without remuneration.
Past convictions for conduct made legal under the proposed law will be automatically expunged, and people currently serving time for such offenses will be eligible for resentencing. The legislation makes it so people with convictions for possession with intent to distribute can petition the courts for expungement three years after serving out their time.
Parts of the referendum took effect at the beginning of the year. Possession of up to 1.5 ounces of cannabis became a civil offense, punishable by a $100 fine, with a $250 fine in place for more than 1.5 ounces and up to 2.5 ounces.
Adult-use legalization began to advance through Maryland’s legislature in the 2021 session, but no votes were ultimately held. The Senate Finance Committee held a hearing that year on a legalization bill, which followed a House Judiciary Committee hearing on a separate cannabis proposal.
Maryland legalized medical cannabis through an act of the legislature in 2012. Two years later, a decriminalization law took effect that replaced criminal penalties for possession of less than 10 grams of marijuana with a civil fine of $100 to $500.
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