With the passing of the Cannabis Reform Act and subsequent legislation, Maryland has established a framework for the legal adult-use sales of cannabis, creating exciting opportunities for entrepreneurs considering opening a dispensary in Maryland. However, it's essential to understand the intricacies of Maryland's cannabis laws and the cannabis license application process before you dive into the lucrative marijuana industry. In this blog, we'll address some of the most frequently asked questions about obtaining a Maryland Cannabis Dispensary License.
Q1. Who can apply for a Maryland Cannabis Business License?
Maryland’s Cannabis Reform Act (HB556/SB516) mandates that applicants in Round 1 must qualify as social equity applicants. This definition encompasses individuals or entities with at least 65% ownership and control held by those who meet certain criteria, including:
- Residence in a disproportionately impacted area for five of the past ten years.
- Attended a public school in a disproportionately impacted area for at least five years.
- Attended a Maryland 4-year institution of higher education for a minimum of two years, where at least 40% of attendees are eligible for a Pell Grant.
It's crucial for potential social equity applicants to understand the specific criteria and verification process for Maryland's cannabis licenses. Verification can be done through the Maryland Cannabis Administration's (MCA) Social Equity Verification Portal, which will be open for a period of 60 days from September 8 to November 7, 2023, and where you need to demonstrate your interest and understanding of the licensing process by completing the Cannabis Business Licensing Interest Form. After completing the Cannabis Business Licensing Interest Form, you'll receive a personalized application link via email within 1-2 business days.
Once verified as a social equity applicant, you'll receive a verification number and report, which you must submit with your cannabis dispensary license application. Note that verification doesn't guarantee admission to the Maryland cannabis application lottery or replace statutory application materials. This verification service is provided at no cost to prospective applicants and is a required component of the application process.
Q2. How do I apply for a Dispensary License in Maryland?
The application process for a Maryland Cannabis Dispensary License requires careful planning and attention to detail, and Maryland opened their social equity verification portal on September 8, 2023. Aspiring social equity applicants, ensure that you understand the license criteria, be prepared to verify your eligibility, and complete the Cannabis Business Licensing Interest Form before the cannabis license application portal closes on November 7. To stay informed and receive notifications when the application becomes available, you can sign up on the Maryland Cannabis Administration's website. Before applying, the state will conduct outreach and educational events to guide interested parties through the application process.
Q3. What is the cost of a Cannabis License in Maryland?
Applying for a cannabis business license is not cost-free. The application fee for a standard license is $5,000, while a micro business license requires a $1,000 fee. It's important to factor in this expense when considering your entry into the cannabis industry. Learn more about the cost of opening a dispensary.
Q4 . What is the Difference Between a Standard License and a Micro License?
Both standard and micro licenses offer entry into Maryland's cannabis industry, but they cater to different business scales. Standard licenses are suited for larger operations, while micro licenses are designed for smaller businesses. The latter have restrictions on the amount of cannabis they can grow or process, making them an attractive option for those seeking to start on a smaller scale. Maryland’s Cannabis Administration may award up to 80 standard dispensary licenses and 10 micro dispensary licenses in the first round of applications.
Q5. What is a "Disproportionately Impacted Area" according to Maryland's Cannabis Laws?
The term "Disproportionately Impacted Area" holds significant importance in Maryland's cannabis regulations. This designation refers to areas with a history of high cannabis possession charges, specifically those exceeding 150% of the state's 10-year average. These areas are crucial in determining eligibility criteria for social equity applicants.
Q6. What Documents are Required for Maryland Dispensary License Application?
To verify your eligibility as a social equity applicant, you'll need specific documents based on your chosen criterion:
- For residency, you'll need documents like a residential lease, driver's license, mortgage loan, or utility bills displaying your address.
- For attending a public school, provide school transcripts or enrollment records from a public school in Maryland.
- If you attended a Maryland 4-year institution, submit two years' worth of transcripts or school records from eligible institutions.
Apart from qualifying the social equity criteria, your Maryland cannabis license application must include several key components:
- Detailed Operational Plan: Outline how you plan to operate your cannabis retail business. Present a detailed long-term plan, including facility descriptions, activities scope, budget, resources, timeline, employee conditions, and more.
- Cannabis Business Plan: Provide a comprehensive dispensary business plan that covers your strategies, goals, and financial projections.
- Dispensary Security Plan: Detail the security measures you'll implement, including emergency protocols.
- Diversity Plan: Highlight your commitment to diversity and inclusion within your business.
- Ownership Structure: Clearly describe the ownership structure of your business, previous or existing cannabis licenses, and other relevant ownership details.
- Criminal and Financial History: Provide information about any legal matters involving the business, owners, or employees in the past five years, as well as financial statements and related documentation.
- Business History: Furnish a history of your business, premises diagrams, agreements related to profit sharing, and other relevant information.
Q7. How Does the Legalization of Adult-Use Cannabis Impact the Existing Medical Cannabis Program in Maryland?
The legalization of adult-use cannabis doesn't directly affect the existing medical cannabis program in Maryland. Patients can still access medical cannabis through licensed dispensaries, and individuals aged 18 and older can register for the medical program. The legislation ensures that registered patients have continued access to their required medication. Existing medical dispensaries have the option to convert to adult-use licensees if they wish to.
Q8. How is Maryland Addressing Social Equity in Cannabis Laws?
Maryland's legislation prioritizes equity in cannabis licensing, aiming to ensure that communities disproportionately affected by cannabis prohibition can access economic opportunities from legalization. The law achieves this by:
- Establishing exclusive social equity applicant licensing rounds.
- Providing access to capital and technical assistance to qualifying social equity applicants.
- Creating license categories and classes that require less capital.
- Eliminating non-violent cannabis convictions as employment barriers in the industry.
- Establishing an Office of Social Equity to aid applicants.
- Removing entry barriers for small businesses.
By embracing cannabis social equity, Maryland seeks to promote diversity and fairness within the cannabis industry, offering a level playing field for all stakeholders.
Q9. How will Maryland Support Equity and Community Reinvestment in the Cannabis Industry?
Maryland's commitment to social equity in the cannabis industry goes beyond licensing. The legislation establishes new funds to support social equity measures and community reinvestment. These funds include a business assistance fund to help small, minority-owned, and women-owned businesses enter the cannabis industry. Additionally, a community reinvestment and repair fund allocates a portion of adult-use sales tax revenue to communities disproportionately impacted by cannabis prohibition.
Q10. How can Interested Individuals stay informed about the Cannabis Licensing Process in Maryland?
For those eager to participate in Maryland's cannabis industry, staying informed is crucial. The Maryland Cannabis Administration plans to conduct extensive outreach and educational events to guide potential applicants through the licensing process. Interested parties can sign up on the cannabis administration's website to receive notifications and updates about the application process and industry developments.
As Maryland's cannabis industry evolves, prospective cannabis business owners have the opportunity to shape its future. By understanding the requirements, and processes of the cannabis licensing system, you can position yourself for success within this exciting and lucrative. Stay updated with the latest information from the Maryland Cannabis Administration, or click below to download Cova’s complete guide on opening a dispensary and embark on your journey into the cannabis business world.