Maryland House and Senate lawmakers on Friday unveiled a much-anticipated bill to tax and regulate marijuana, months after voters approved a legalization referendum on the ballot.
Dels. Vanessa Atterbeary (D) and C. T. Wilson (D) are sponsoring the House legislation, while Sens. Brian Feldman (D) and Antonio Hayes (D) are carrying their chamber’s companion.
The measures would get the state prepared to regulate cannabis commerce as the state law legalizing possession of up to 1.5 ounces of marijuana for adults takes effect on July 1.
Under the proposals, cannabis would be taxed at six percent for the first fiscal year starting this summer. It would increase by one percent each year until 2028, maxing out at 10 percent.
The bills propose to put 30 percent of marijuana tax revenue toward a community reinvestment fund for at least the next 10 years. It further calls for 1.5 percent of revenue to go to localities and another 1.5 percent each for a Cannabis Public Health Fund and the Cannabis Business Assistance Fund.
Maryland’s new legal cannabis program will help curb black market sales & puts equity at the center of licensing, taxation & regulation. The legislation allows license seekers to apply for a combined medical & recreational adult-use licenses! @mdhousedems are fighting for equity! pic.twitter.com/HLsy5VsFxu
— Delegate Adrian Boafo (@AdrianBoafo) February 4, 2023
The Marijuana Alcohol and Tobacco Commission would be renamed as the Maryland Alcohol, Tobacco and Cannabis Commission, which would be responsible for regulating the program. Under the commission, there would be an Office of Social Equity to promote industry participation and provide technical assistance for people who’ve been disproportionately impacted by criminalization.
That office would additionally be charged with working with the state comptroller and the Maryland Department of Commerce to determine how best to distribute marijuana tax dollars for the community reinvestment fund.
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.
Senate President Bill Ferguson (D) said during a press briefing on Friday that he believes the legislation “has the possibility of being a national model.”
“It’s a complex topic. There’s a lot of different pieces. No state has gotten it right,” he said. “And so what I do believe we’ve done effectively here is put us on the best path possible.”
The proposal would both protect public health while also ensuring that there’s a “more equitable way to make sure that those who have been harmed by the failed war on drugs had the opportunity to participate in the new marketplace,” he argued.
Ferguson also said that the state needs to be prepared to launch marijuana sales on July 1 and “thoughtfully” craft regulations to avoid a scenario that’s played out in New York, where there are currently only two licensed retailers operating but an estimated 1,400 unlicensed shops in operation.
“I’m hopeful that, when we do pass the final product and the governor signs it, that we can be proud of the work that went into it—to learn from other states, to create a more equitable and fair marketplace and a new market and a new industry,” the Senate president said. “I feel really good about it.”
A spokesperson for Gov. Wes Moore (D) 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.”
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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.