Ask any economic expert about the most thriving sectors in Maryland, and they’ll speak to the state’s prowess in manufacturing, energy/utilities, life sciences, and construction. However, Maryland is gaining more notoriety for another commodity that can earn a substantial amount of revenue; legalized adult-use cannabis.
Many Maryland residents might hear about adult-use cannabis legalization and salivate over the many opportunities to partake in above-board adult usage. More entrepreneurial minds will veer toward a potential business venture.
Keeping the above sentiments in mind, we’ll explain how to open a dispensary in Maryland.
The Legal Landscape For Adult-Use Cannabis In Maryland
Like most of the US, adult-use cannabis in Maryland is murky. We can tell you that Maryland recently became the 20th state to legalize adult- use cannabis when voters approved Question 4 during the November 8th, 2022, referendum.
That news seems straightforward enough, but does this landmark referendum result mean that consumers and sellers of adult-use cannabis in Maryland can roam freely, weed in hand?
Unfortunately, not quite yet.
A significant amount of regulatory nuances and licensing structures must be hashed out via new legislation. Full legalization will only occur as of July 1st, 2023, when new possession laws are implemented.
Since these rules aren’t so cut and dry, we’ll delve deeper into this topic.
Is It Currently Legal To Consume Cannabis In Maryland?
You can’t legally consume non-medical cannabis until next July, but the state’s medical cannabis program is in full effect.
It’s worth noting that while adult-use cannabis isn’t yet legal in Maryland, it’s decriminalized. Possession of up to ten grams results in a $100 fine if you are caught. The maximum decriminalized amount will expand to 1.5 grams from January 1st, 2023, to June 30th.
What Kind Of Stipulations Will Exist When Adult-Use Cannabis Is Legalized In Maryland?
Upon July 1st, 2023, it will be legal to carry up to 1.5 ounces of adult-use cannabis in Maryland. That said, carrying over 1.5 ounces but less than 2.5 ounces will be punishable by up to a $250 civil fine. Holding over 2.5 ounces could be punishable by a maximum $1,000 fine and even six months in jail.
When Will Maryland Make Adult-Use Cannabis Available To Adults?
While adult-use in Maryland will be legalized in July 2023, sales won’t be immediately available.
A companion bill associated with the recent legalization outlines the oncoming phases of cannabis regulation (e.g., legal amounts and timing). Still, the lawmakers haven’t hammered out the framework to allow retail sales. This topic will likely be discussed during the pending General Assembly session in January 2023.
Medical Cannabis In Maryland
While statewide adult-use cannabis is being legalized as we speak, medical cannabis has been legal in Maryland since 2014–thanks to Bill HB 881.
The bill’s purpose was to allow patients with a prescription to legally obtain and use cannabis as a medical treatment. The bill included approved and certified physicians and state licensing for cannabis production/dispensing.
Additionally, the bill involved the development of an application review process. The Maryland Medical Cannabis Commission (MMCC) was appointed to oversee registration, regulation, licensing, testing measures, and inspection.
Patients are eligible when a provider recommends medical cannabis treatments for anorexia, cachexia, or other chronic conditions that haven’t responded to other treatments. Here’s a complete list of qualifying conditions.
The Medical Cannabis Landscape In Maryland
Between January 2020 and January 2021, Maryland’s medical cannabis program has grown from 87,019 to 123,525 registered patients.
22 licensed processors have been issued by the MMCC, which has also approved 22 licensed and 102 pre-approved medical cannabis dispensaries.
How To Apply For A Dispensary License In Maryland
No new medical cannabis license applications are being accepted by the MMCC as of this article being published.
While a bill was passed for the MMCC to approve additional permits a few years ago, an applicant felt their application was disqualified improperly.
Upon the applicant raising their concern, a judge enforced a temporary restraining order in September 2019. This decision prevented 14 licenses from being issued–and each of the 14 licenses will be investigated by the MMCC.
Given this muddying of the works, it’s unknown when the next licensing rounds will occur.
The ambiguity of medical and adult-use sales means keeping informed and in touch with the MMCC’s comings and goings will be vital if you want to sell any kind of cannabis.
Licensing Fees And Types
As we’ve established, adult-use licenses aren’t yet available in Maryland. Additionally, while medical cannabis can be legally sold, receiving a license isn’t currently possible. Furthermore, it’s unclear when the next rounds of medical licensing will occur.
Despite the above preamble, it’s wise to know the associated fees with obtaining your license to sell cannabis legally. This way, when an opportunity comes knocking, you’ll have a reasonable estimate of the appropriate budgeting.
Here are the licensing fees associated with selling medical cannabis in Maryland:
- A Grower License allows you to grow cannabis in a commercial setting. The annual licensing fee is $125,000. Stage 1 of the application process costs $2,000, and Stage 2 costs $4,000.
- For a Grower and Dispensary License, Stage 1 of the application process costs $3,000, Stage 2 costs $8,000, and the annual licensing fee is $165,000.
- A Dispensary License allows you to sell medicinal cannabis to patients and caregivers. Stage 1 of the application process costs $1,000, Stage 2 costs $4,000, and the annual licensing fee is $40,000.
- A Processor License allows you to create new products (e.g., concentrates, edibles, and topicals) from raw cannabis plants. Stage 1 of the application process costs $2,000, Stage 2 costs $4,000, and the annual licensing fee is $40,000.
How Lucrative Will The Cannabis Market Be In Maryland?
According to William Tilburg, the MMCC’s executive director, Maryland’s medical cannabis sales reached $1 billion after launching in 2017.
Around 125,000 prescribed users is a reasonable market size. That number is promising, especially considering the limited number of medical customers. Still, it limits the growth potential of a sector that could boom like a supernova with more legal customers.
Thus, it shouldn’t surprise anyone that pending legalization is expected to give Maryland’s cannabis market a significant jolt. To that point, it’s estimated by cannabis market research firm BDS Analytics that the state could achieve its next $1 billion in cannabis sales by 2024. Almost 70% of sales will likely stem from adult-use consumers.
The adult-use cannabis industry in Maryland might be in stasis for the time being, and medical licensing isn’t an option for many. Yet, the wheels are in motion for the industry to explode, and it’s wise to do what you can to get in on the ground floor.
How Can Green Space Accounting Help?
While you can’t open up your adult-use or medical dispensary in Maryland now, you can undoubtedly begin the planning process.
Part of the planning process would involve navigating the various financial and accounting hurdles. Managing these components before the market gets saturated will give you a leg up in showing decision-makers you’re a viable, above-board cannabis retailer.
Green Space Accounting has a vast knowledge of these financial and accounting nuances. Our guidance might give you a competitive edge in starting your cannabis business and receiving your license. Book a consultation today to find out more.
