Ohio has legalized recreational cannabis. Click HERE to learn more about cannabis business opportunities in Ohio.

How To Open A Dispensary In Maryland
(New Guide For 2024)

Overview

Are you wondering how to open a dispensary in Maryland? This page is dedicated to keeping you up to date on the latest news and information relevant to opening a cannabis business in Maryland. This includes helpful insights on what is to come next.

Maryland is the 20th state to legalize marijuana for recreational use. On November 8th, 2022, voters in Maryland gave Question 4 of the 2022 referendum their approval. The proposed change to the constitution was approved by a vote of 65 percent to 35 percent. A substantial portion of the program’s regulatory and licensing structure must be developed through new legislation. 

On July 1, 2023, Maryland’s marijuana legalization law went into effect, allowing people to possess and grow cannabis for personal use. At the same time, another law called HB1071 also became active, preventing the police from using the smell or possession of marijuana alone as a reason to search someone. Additionally, a different law known as HB0232 has been implemented, ensuring that state officials cannot consider the responsible and legal use of cannabis by parents and guardians as neglecting their children.

On September 8, 2023, the Maryland Cannabis Administration (MCA) announced the first round of new cannabis business licenses, which will be open for applications from November 13, 2023, to December 12, 2023. The first round of licensing will be exclusive to social equity applicants. 

On October 16, 2023, the MCA issued instructions for creating operational, business, and diversity plans, along with the minimum qualifications for a cannabis business license application in the Evaluation Worksheet for the upcoming application period for the new cannabis business licenses in the state. Additionally, on October 17th,2023, the MCA released comprehensive guidance on the application submission requirements once the OneStop portal becomes available, accessible in the Application Instructions.

On January 8th, 2024, Maryland reported a striking increase in marijuana sales, marking a new era in the state’s approach to cannabis policy. Within six months of legalizing recreational marijuana, the Maryland Cannabis Administration announced that sales had more than doubled, reaching nearly $700 million in a year. This growth includes a significant rise in both medical and adult use sales, with businesses in the sector witnessing a substantial boost in revenue. Additionally, Maryland is introducing 75 new dispensary licenses, particularly targeting communities affected by previous drug policies, reflecting a commitment to social equity and market diversity in the cannabis industry.

Here’s a timeline of marijuana legalization efforts in Maryland:

In July 2021, House Speaker Adrienne Jones pledged that the House intends to put marijuana legalization on the 2022 ballot. A 10-member legalization workgroup was formed to study the best way to establish the legal framework for the reform. Rep. Luke Clippinger (D), chair of the workgroup, said they would address issues including business licensing, tax policy, and social equity. 

The workgroup took the first step toward legalization when they first met on September 8, 2021. Among the topics they discussed were the history of legalization across the country, arrangement to work on creating legislation for a regulated marijuana market and the fast development of Maryland’s legalization movement, several policy considerations, and growing bipartisan support as presented by John Hudak, a Brookings Institution researcher

Legislation to legalize marijuana for recreational purposes did begin to advance during the 2021 legislature session with two separate bills, HB 32 — The Cannabis Legalization and Regulation, Inclusion, Restoration, and Rehabilitation Act of 2021, introduced by Delegate Jazz Lewis, and SB 708 — Cannabis Legalization and Regulation, introduced by Senator Brian Feldman. However, no votes were held for either bill. The focus shifted to 2022 legalization. 

Following months of research on adult-use cannabis legalization, Rep. Clippinger pre-filed a bill to bring a marijuana legalization ballot proposal before the state’s voters in the year 2022. The measure has been labeled House Bill 1, indicating priority, and was introduced when the General Assembly reconvened on January 12, 2022. If approved by voters, the state constitution would be changed to allow adults 21 and older to use and possess cannabis starting in July 2023. 

On February 4, 2022, Sen. Jill Carter (D-Baltimore) introduced SB692, a legislation to completely legalize recreational cannabis in Maryland however, the bill died on April 11th, 2022.

During the 90-day legislative session, legislators examined topics related to the state’s $4.5 billion budget surplus. The legalization of recreational marijuana is one of the issues that legislators addressed. 

During a vote on February 25th, 2022, the Maryland House of Delegates approved House Bill 1. The result was 96 to 34. If it passes through the Senate chamber, voters should expect to see the issue on the November general election ballot. 

On April 1st, 2022, Maryland legislators decided to place Maryland Question 4 or introduced as House Bill 1 on the November ballot, putting the decision in the hands of the people for the legalization of recreational marijuana. There are provisions in the legislation that specifies a transitional period between January 1 and July 1, 2023, during which a fine for possession of marijuana under an ounce and a half would be levied. 

On June 14th, 2022, the first hearing was conducted by a Maryland legislative marijuana workgroup after the passage of legislation to place cannabis legalization on the November 2022 ballot and to adopt some first laws should voters approve the reform. At the meeting, members of the Maryland House Cannabis Referendum and Legalization Workgroup heard expert testimony on the present landscape of marijuana policy in order to influence their future approach to licensing and regulatory concerns. 

There is increasing support for this initiative from residents and all sides of the political spectrum in the state.

  • Results from a Goucher College Poll show that 66 percent of Maryland residents support adult-use marijuana. 77 percent of Democrats, 50 percent of Republicans, and 60 percent of independent voters support the legalization of marijuana for adults.
  • Maryland Cannabis Policy Coalition asserts that taxing and regulating cannabis will produce thousands of jobs and generate millions in tax revenue, advance social justice, keep the sale of cannabis away from schools, and promote public health.
  • Pressure to legalize recreational marijuana in Maryland is building regionally, as the state is already lagging behind its neighbors like Virginia, for example.

 

On September 8th, 2022, a campaign to legalize recreational marijuana in Maryland was launched, asking voters to choose “yes on 4” in November 2022. On October 13th, 2022, the findings of an internal survey released by the Yes on 4 campaign and carried out jointly by Sojourn Strategies and Victoria Research were made public. It was discovered that 69 percent of eligible voters in the state support the referendum issue, which, if adopted, would trigger legislation to enact rules regarding marijuana. In a second poll, respondents indicated, by a ratio of 59 percent to 41 percent, that they had a “strong” interest in the legalization of cannabis.

As mentioned above, Maryland Question 4 appeared on Maryland’s ballot on November 8, 2022 as a constitutional amendment proposed by the legislature. It was approved, granting permission for individuals aged 21 and above to use and possess marijuana in the state.

On February 3rd, 2023, Maryland lawmakers unveiled bills to tax and regulate marijuana.  House bill 556, sponsored by Delegates Vanessa Atterbeary and C.T. Wilson, and Senate bill 516 sponsored by Senators Brian Feldman and Antonio Hayes, aim to regulate cannabis commerce as marijuana possession becomes legal for adults on July 1, 2023. 30% of marijuana tax revenue will go to a community reinvestment fund for 10 years, 1.5% to localities, and 1.5% to a Cannabis Public Health Fund and Cannabis Business Assistance Fund. Existing medical cannabis dispensaries will become dual licensees on July 1, 2023 if they pay a fee. Regulators must start approving additional marijuana business licenses by July 1, 2024. 

On April 8th, 2023, the Maryland General Assembly approved bill 556 to create a regulatory system for the state’s recreational cannabis industry. The bill was passed shortly before the end of the 2023 legislative session, a few months after the legalization of cannabis through a ballot referendum. Adults aged 21 and over can now legally possess up to 1.5 ounces of cannabis from July 1, 2023. The House of Delegates and the Senate had different versions of the legislation, but a compromise was reached which included the tax rate and the establishment of a Maryland Cannabis Administration to regulate the industry. 

On May 3rd, 2023, Senate bill 516 and House bill 556 was signed into law by Maryland Governor Wes Moore paving the way for legal sales of recreational marijuana to commence in the state on July 1st, 2023. Weeks later, the Marijuana Cannabis Administration (MCA) submitted an initial set of regulations on May 26th. The draft rule encompasses various aspects such as outlining regulatory responsibilities, explaining the licensing process (including provisions for social equity applicants), and detailing packaging and labeling requirements.

On July 10th, Maryland authorities announced they will provide an additional $40 million in funding to aid social equity cannabis businesses in covering their operational expenses as they prepare to launch their recreational marijuana shops in the state. Administered by the Department of Commerce, this funding is specifically reserved for social equity applicants who received license pre-approval before October 1, 2022, but have not yet commenced operations by August 1, 2023. Applications for these grants will be open from August 1 to September 1 of 2023.

How big is the opportunity?

William Tilburg, executive director of the Maryland Medical Cannabis Commission, noted that Maryland reached $1 billion in medical cannabis sales after its launch in 2017. He commented, “more businesses and more patients” account for this sales surge.

The impact on the state of recreational legalization would be huge. According to BDS Analytics, a cannabis market research firm, legalization may help the state reach its next billion in sales by 2024, with two-thirds of the total sales volume coming from adult-use sales.

Local Cannabis Restrictions & Laws

Despite statewide legalization, municipalities in Maryland have the authority to establish their own laws and regulations regarding the use and consumption of cannabis.

Ocean City is cracking down on on-site cannabis consumption before the state’s recreational marijuana legalization takes effect in July. The town council unanimously voted on June 5th, 2023 to advance the ban on on-site consumption and approved an ordinance banning on-premises consumption licenses, along with fines for violations. 

Baltimore County is also finalizing local regulations and reducing the distance requirement between dispensaries to align with state law. 

In this section, we’ll keep you up to date on the latest developments in Maryland’s municipalities, including their stances, restrictions, and outright bans concerning cannabis.

Medical Marijuana Program Opportunities

An effort that made the state of Maryland the 21st medical marijuana state was HB 881 (Medical Marijuana – Natalie M. LaPrade Medical Marijuana Commission), which Maryland Governor Martin O’Malley signed into law on April 14, 2014. The bill intended to create a way for patients to access and utilize cannabis medical treatment. The bill includes:

  • Approval of individuals as certifying physicians
  • State-licensed production and dispensing of marijuana
  • Creation of an application review process
  • Appointment of the Maryland Medical Cannabis Commission (MMCC) to oversee regulation, licensing, registration, inspection, and testing measures

 

A patient is eligible if a provider recommends treatment with medical cannabis for a qualifying medical condition such as cachexia, anorexia, or another severe chronic medical condition for which other treatments are ineffective. A full list of qualifying conditions is shown here

Since its inception, the program has grown rapidly to 162,863 patients registered as of December 1, 2022. The MMCC has issued 22 licensed processors, 22 licensed, and 102 pre-approved medical cannabis dispensaries

At this time, no new license applications for medicinal marijuana are being accepted. However, here is the information on the requirements to start a Medicinal Marijuana Business in Maryland.

Maryland Medical Cannabis License Types and Fees

Grower

  • Allowed to grow cannabis in a commercial facility. 
  • Grower license: $6,000 (stage 1: $2,000; stage 2: $4,000) application fee, $125,000 annual license fee
  • Grower and dispensary license: $11,000 (stage 1: $3,000; stage 2: $8,000) application fee, $165,000 annual license fee

Dispensary

  • Allowed to sell cannabis for medicinal uses to patients and caregivers. 
  • $5,000 (stage 1: $1,000; stage 2: $4,000) application fee, $40,000 annual license fee

Processor

  • Allowed to take raw cannabis plants and create new products like concentrates, topicals, and edibles. 
  • $6,000 (stage 1: $2,000; stage 2: $4,000) application fee, $40,000 annual license fee

Converting Medical to Recreational Cannabis License

To participate in the adult-use cannabis sales starting July 1, 2023, existing cannabis businesses must convert their medical licenses to new standard cannabis licenses. These converted licenses are valid for five years and allow businesses to grow, process, and sell cannabis to those aged 21 or older. Licenses that don’t convert can’t operate beginning July 1. For more information about this, check here.

On the first day of adult-use retail, 94 out of 100 existing medical dispensaries switched to serve adult-use customers. They collectively generated $3.6M in adult-use sales and over $900K in medical sales. Overall, Maryland retailers sold over $10.4M worth of cannabis during the three-day weekend, serving both markets.

Recreational Use Legalization

Voters in Maryland approved Question 4 on November 8, 2022, making it the twentieth state to legalize recreational marijuana usage. 

Question 4 was introduced as House Bill 1 in January 2022. HB 1 is accompanied by two pieces of companion legislation: HB 837, which is sponsored by Rep. Luke Clippinger, and SB 833, which is sponsored by Senator Brian Feldman. HB 837 and SB 833 include details for initial steps for legalization, such as limits on possession and home cultivation, limited expungement, and funding for businesses owned by minorities and women. These provisions are contingent on voter approval of HB 1. They do not establish a license or regulating structure, and their policy does not involve the cultivation of cannabis at home. The possession of between 1.5 and 2.5 ounces of marijuana would simply result in a civil fine and would not be deemed a criminal violation. In April 2022, HB837 was enacted while SB 833 died. 

Recreational Cannabis Program Opportunities

There will be an initial round of applications for cannabis business licenses starting on November 13, 2023, and remaining open for 30 days, closing on December 12, 2023. During this round, over 175 standard and micro cannabis grower, processor, and dispensary licenses will be exclusively reserved for social equity applicants.

Maryland Adult Use Cannabis License Types

The Marijuana Control Agency has set the following limits for each standard or micro cannabis license category in Round 1:

Micro licenses: 24 grower licenses, 24 processor licenses, and 8 dispensary licenses. 

Standard licenses: 16 grower licenses, 32 processor licenses, and 75 dispensary licenses

Round 2 for standard and micro cannabis licenses will include the addition of on-site consumption licenses.

Both standard and micro licenses in Maryland allow businesses to grow, process, or sell cannabis. Micro licenses are for smaller businesses with limited cannabis operations, and micro dispensaries can also offer delivery services to patients and consumers.

How to get a dispensary license in Maryland

All eligible applicants, meeting the minimum licensure requirements, will enter a randomized lottery based on license type and the county or region of their application submission. The number of standard dispensary licenses available in the first round are:

Jurisdiction

Licenses Available

Baltimore City

11

Montgomery

9

Prince George’s

9

Baltimore

6

Anne Arundel

5

Calvert

3

Harford

3

Howard

3

Frederick

3

Washington

3

Carroll

2

Cecil

2

Charles

2

St. Mary’s

2

Talbot

2

Wicomico

2

Allegany

1

Caroline

1

Dorchester

1

Garrett

1

Kent

1

Queen Anne’s

1

Somerset

1

Worcester

1

On September 1, 2023, the Maryland Cannabis Administration and the Office of Social Equity revealed the next steps for those looking to obtain a cannabis license in the state. 

Here are the cannabis license application qualifications criteria and acceptable verification documentations:  

Cannabis License Application Qualifications Criteria

The Cannabis Reform Act mandates that all Round 1 applicants must qualify as social equity applicants. A social equity applicant is an applicant with at least 65% ownership and control held by individuals who meet one or more of the following criteria:

Criteria 1: Resided in a disproportionately impacted area for a minimum of five years out of the past ten years. Review ZIP codes meeting the criteria here.

Criteria 2: Attended a public school located in a disproportionately affected area for a minimum of five years. Review open Maryland schools meeting criteria here.

Criteria 3: Attended a four-year higher education institution in the State for a minimum of two years, where at least 40% of the attendees are eligible for a Pell grant. Review the list of higher education institutions meeting criteria here.  

You can locate the minimum qualifications for a cannabis business license application in the Evaluation Worksheet available here.

To check eligibility as a social equity applicant, you can use the Social Equity Verification Portal, available until November 7. To access the portal, complete the Cannabis Business Licensing Interest Form

Documents Accepted for Each Criteria

The following documents will be considered acceptable by the MCA for verifying an individual’s eligibility based on the criteria mentioned above:

Criteria 1: Two of these documents, showing the candidate’s address for five years from 2014 to 2023, will suffice for verification:

  • Residential Lease
  • Driver’s License or government-issued ID with a valid address
  • Mortgage loan
  • Bank statement
  • Utility bill in the applicant’s name
  • W-2/1099
  • Income tax returns
  • Court documents
  • Credit card statements
  • Housing Authority Records

Criteria 2: Any of these documents confirming enrollment in a public school for five or more years will suffice. These records must be obtained from a public school and include the school’s address.

  • School transcripts
  • Enrollment records

Criteria 3: Two years of transcripts or school records from any of these institutions are required. Records must be obtained from the listed institutions.

  • Bowie State University
  • Coppin State University
  • Morgan State University
  • The University of Baltimore
  • University of Maryland – Eastern Shore
  • Washington Adventist University

How To Apply For A Dispensary License In Maryland

In addition to meeting the criteria above and submitting relevant documents for verification, an applicant must submit an operational plan, business plan, and diversity plan. 

You can find templates for all the necessary attachments here:

Applicants must also submit an application fee of either $5,000 for a standard license or $1,000 for a micro license. 

The detailed instructions on the requirements for submitting an application can be found here.

 

Key Dates for Obtaining a Maryland Recreational Cannabis License

As of July 1, 2023, existing medical cannabis businesses in Maryland have the option to transition into providing cannabis and cannabis products to consumers aged 21 and above.

Between July and August 2023, the newly established Maryland Cannabis Administration (MCA), in collaboration with the Office of Social Equity, will be engaged in outreach, training, and guidance efforts to assist individuals interested in applying for new cannabis licenses.

Starting November 13 to December 12, 2023, there will be a 30-day window for individuals and businesses to apply for standard or micro cannabis licenses during Round 1. The MCA will also review the submitted applications, conduct outreach if necessary, and conduct a lottery to select Round 1 applicants who will receive licenses.

Starting from January 1, 2024, the MCA will commence notifying the selected Round 1 applicants of their license awards.

In May 2024 or later, the MCA will announce the commencement of Round 2, which will include the availability of standard and micro cannabis licenses, potentially including licenses for on-site consumption.

Final Thoughts

We anticipate many new events through 2024 to unfold that will affect when and what recreational legalization will look like. By adding yourself to our Maryland Cannabis Mailing List (below), we will keep you updated on all relevant news, and not so easy to find news and comments related to Maryland Legalization below. This includes but is not limited to:

  • How much will it cost to open a dispensary in Maryland?
  • What are the requirements to get a marijuana business license and open marijuana dispensaries in Maryland?
  • What special programs will be available?
  • And more

 

Just fill out the information below to get access.

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