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

Key Takeaways

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. It also includes insights on upcoming developments.

Overview of Cannabis Legalization in Maryland:

Maryland became the 20th state to legalize marijuana for recreational use when voters approved Question 4 in the November 2022 referendum by a 65 percent to 35 percent margin. The new law, allowing people to possess and grow cannabis for personal use, took effect on July 1, 2023. This law coincided with the enactment of HB1071, which prevents police from using the smell or possession of marijuana alone as a reason for searches, and HB0232, which protects the parental use of cannabis from being considered neglect.

Pre-Legalization Developments:

  • July 2021: House Speaker Adrienne Jones announced the intention to place marijuana legalization on the 2022 ballot. A 10-member legalization workgroup, chaired by Rep. Luke Clippinger, was formed to study and establish the legal framework for cannabis reform.
  • September 8, 2021: The legalization workgroup began its efforts, discussing the history of legalization in the country and strategies for crafting legislation for a regulated marijuana market.
  • 2021 Legislative Session: The legislative push to legalize marijuana began with bills such as HB 32 and SB 708. Despite discussions, no votes were held, and focus shifted towards the 2022 ballot.
  • February 25, 2022: The Maryland House of Delegates passed House Bill 1 with a vote of 96 to 34, moving the bill forward to the Senate and ultimately to the voters as Maryland Question 4.
  • April 1, 2022: Maryland legislators officially placed Maryland Question 4 on the November ballot, outlining a transitional period from January 1 to July 1, 2023, during which fines would be levied for possession of small amounts of cannabis.
  • June 14, 2022: A legislative hearing was conducted to discuss the initial regulatory framework that would take effect if the voters approved the ballot measure. This session included expert testimony to guide future licensing and regulatory approaches.

Post-Legalization Key Developments:

  • November 8, 2022: Maryland voters approved Question 4, legalizing recreational marijuana and setting the groundwork for the regulation of cannabis starting July 1, 2023.
  • September 8, 2023: The Maryland Cannabis Administration (MCA) announced the first round of new cannabis business licenses, available exclusively to social equity applicants, from November 13 to December 12, 2023.
  • October 16 and 17, 2023: The MCA released guidelines for creating operational, business, and diversity plans. Comprehensive guidance on application requirements was also provided through the OneStop portal.
  • January 8, 2024: Maryland reported a significant increase in marijuana sales, totaling nearly $700 million within six months of legalization. This period also marked the introduction of 75 new dispensary licenses focused on enhancing social equity and market diversity.

Ongoing and Future Actions:

  • 2024 and Beyond: Maryland continues to refine its regulatory framework, with ongoing adjustments and the introduction of additional licensing rounds expected to further shape the cannabis market landscape.

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 cracked down on on-site cannabis consumption before the state’s recreational marijuana legalization took effect in July 2023. 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 Council members voted to change the distance of how far dispensaries can be from each other, decreasing it from 2,500 feet to 1,000 feet, in accordance 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.

As of April 5, 2024, Maryland has 126, 322 cannabis patients. There are a total of 166 licenses: 25 Ancillary Business, 96 Dispensary Business, 18 Grower Business, 4 Independent Testing Lab, and 23 Processor Business.

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 had the option to 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, 2023. 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 the initial steps for legalization, such as:

  • Limits on possession and home cultivation
  • Limited expungement
  • 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

The first round of licensing was exclusive to social equity applicants. It occurred from November 13, 2023, to 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:

JurisdictionLicenses Available
Baltimore City11
Montgomery9
Prince George’s9
Baltimore6
Anne Arundel5
Calvert3
Harford3
Howard3
Frederick3
Washington3
Carroll2
Cecil2
Charles2
St. Mary’s2
Talbot2
Wicomico2
Allegany1
Caroline1
Dorchester1
Garrett1
Kent1
Queen Anne’s1
Somerset1
Worcester1

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, 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 was  a 30-day window for individuals and businesses to apply for standard or micro cannabis licenses during Round 1. The MCA also reviewed the submitted applications, conducted outreach, and held a lottery as part of the selection process to choose Round 1 applicants who will receive licenses..

Starting from January 1, 2024, the MCA commenced 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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