Maryland’s New Recreational Cannabis Market: 9 Things to Know
By Chava Gourarie April 12, 2023 3:18 pm
reprints
Maryland lawmakers on April 7 passed a bill finalizing the rules for the state’s legal recreational cannabis market, after Maryland residents voted to legalize its use last year.
The legislation sets up regulation, licensing and taxing for cannabis sales, and establishes a new agency to oversee the market, which will supplement the existing medical marijuana market. The state currently has 100 active medical dispensaries, which pulled in a total of $510 million in sales in 2022, per the state’s Medical Marijuana Commission.
Here are nine things to know about Maryland’s recreational market:
Start date. The market for recreational sales goes into effect this summer, starting July 1.
Only Maryland. While recreational marijuana use is also legal in both Virginia and Washington, D.C., neither has established a recreational weed market, making Maryland the first in the region to do so. Virginia lawmakers failed to pass a bill legalizing recreational sales in their legislative session earlier this year while D.C. is under the shadow of federal marijuana laws.
Licenses. The state will offer a limited number of licenses to four different stakeholders. It will offer licenses for 75 growers, 300 dispensaries, 200 delivery services, as well as an unspecified number of “micro-licenses” for smaller sellers and growers who will operate in smaller spaces.
Dispensaries. Existing medical dispensaries can pay a one-time fee of $100,000 or more, depending on their 2022 sales, to sell weed for recreational purposes once the market goes into effect.
Edibles. Maryland will allow on-site consumption, similar to a cafe or bar, but there’s a catch: the marijuana can only be eaten, not smoked, at these locations. (Maryland already has a medical cannabis lounge where you can smoke.)
Tax. Sales tax will be capped at 9 percent, and 35 percent of the tax proceeds will go to the Community Reinvestment and Repair Fund, a new fund for local organizations that support marginalized communities. (See next entry.)
Equity. Given how the war on drugs has disproportionately affected brown and Black communities, the Community Reinvestment and Repair Fund will provide support to minority retailers in the recreational weed market.
Testing. The newly-created cannabis sales agency will also establish a lab to test cannabis products to make sure they comply with state regulations.
Leasing. The new market is expected to add demand for warehouse space for growers, as well as retail storefronts for consumer-facing businesses. The University of Baltimore Law Review went into the details on what those commercial leases might look like.
Chava Gourarie can be reached at cgourarie@commercialobserver.com.
