When Marylanders vote in November, they are expected to overwhelmingly support a referendum that would legalize adult-use cannabis. But that doesn’t mean you’d be able to walk into a dispensary and buy a joint the next day.
A medical cannabis industry group is sounding the alarm that if lawmakers don’t hammer out details this summer, the recreational industry won’t launch until 2025 — or later.
In addition to the pending statewide referendum, the General Assembly still needs to agree on a regulatory framework, rules need to be put in place, licenses need to be awarded, and businesses need time to get off the ground. The Maryland cannabis industry hit about $600 million in revenue last year, according to state regulators. Some believe that number could eventually triple or more with a recreational cannabis industry.
Lawmakers who spoke to The Baltimore Sun were hesitant to put a firm date on when the recreational industry could be up and running. They said they want to avoid a repeat of the start of the medical cannabis industry, which was dominated by white-owned businesses. A group of House lawmakers will begin meeting Tuesday for preliminary discussion, but a disparity study considered essential to setting up the industry already is expected to be finished late — perhaps not until the middle of the 2023 legislative session.
Under a bill passed this session, the Maryland Department of Transportation is expected to begin in July the disparity study of the medical cannabis industry. The study must be complete before any recreational cannabis licenses could be awarded.
Republican Gov. Larry Hogan previously ordered a disparity study of the industry in April 2017 after all 15 of the initial medical marijuana cultivation licenses went to white-owned businesses. It took nine months before that study was released.
The cannabis bill passed this session requires the new study to be completed in five months, with a targeted released date in November. But Sen. Antonio Hayes, a Democrat from Baltimore, said “there’s a good chance it won’t be done” by the start of the General Assembly session in January.
Hayes said he hopes it will be completed during the session, at which point lawmakers can figure out how to award licenses in the new industry.
“For many members of the Black Caucus, [the disparity study] could be an obstacle to advancing legislation,” Hayes said.
Sen. Jill Carter, a Democrat from Baltimore, said that if the General Assembly was truly committed to equity, the details around licensing and addressing racial disparities would have been sorted out before passing a bill setting up a referendum.
“Prohibition of marijuana has had a devastating impact on Black people across Baltimore and Maryland … If we are honest and sincere about building our cities and communities in the future, then we need to repair the damage to Black people and Black communities ... ,” Carter said. “You can’t have rich white people suddenly making millions or billions of dollars for the same behavior that Black people have been criminalized for.”
Carter voted against the cannabis referendum bill this session. She knows that the referendum will likely boost voter turnout this November, but she believes it was more important to hammer out the details of licensing and community reparation funds.
“We can’t wait much longer because we can’t afford to lose the revenue,” Carter said. “We have a brand-new industry and a total opportunity to repair the damage caused by prohibition. To me, that’s the critical thing here.”
The next few months are key to building consensus among lawmakers, said Del. Luke Clippinger, a Democrat from Baltimore.
“Everybody wants to know when they’re going to be able to start using this, presuming the referendum passes,” Clippinger said.
He said he expects most of the details will be sorted out in 2023, but there will be unresolved questions that need to be addressed in the 2024 session.
Debby Miran has experience setting up a cannabis industry. She was one of the original members of the Maryland Medical Cannabis Commission and is now an industry consultant.
Miran said this time will be much different from the launch of the medical cannabis industry, when a reluctant then-Gov. Martin O’Malley, a Democrat, set up a toothless commission.
“He didn’t staff it or fund it,” Miran said of the commission. “That’s the oldest trick in the book.”
It took the commission about two years to get the initial regulations for medical cannabis in place, Miran said, but the Maryland Medical Cannabis Commission now has a robust staff. She expects much of the work of setting up a recreational industry and regulations would be carried out by these state workers — whether it’s at the commission or as part of a different state agency.
According to Miran, there’s chatter within the existing medical cannabis industry that lawmakers will make current license holders pay a fee to enter the recreational cannabis industry. For cultivators, Miran said, that fee is expected to cost about $1 million.
Some cultivators already are ramping up production in anticipation of the recreational market, she said, and the price of a pound of cannabis flower has been dropping.
Meanwhile, if voters approve the November referendum, certain changes would come. Starting in July 2023, possession of cannabis for personal use would be decriminalized and Marylanders would be able to grow two cannabis plants at home.
The Evening Sun
That could be problematic for the existing medical cannabis industry, said Mackie Barch. Barch is the head of the Maryland Wholesale Medical Cannabis Association and runs Culta, a vertically integrated grower, processor and dispensary business with a location on Key Highway in Federal Hill.
“Demand for cannabis is constant. It has been for 20 years,” Barch said. “It’s just a question of who fills that demand.”
If it takes multiple years to get the recreational market started, Barch predicts an unregulated market would fill that void, made up of cannabis legally bought in neighboring states, homegrown cannabis, and hemp-derived psychoactive products such as Delta-8.
The existing industry would lose revenue, and Black and minority-owned businesses would continue to wait on the sidelines, Barch said. The only winners, he added, would be the illegal market and large, publicly traded cannabis companies that can weather such uncertainty.
If Maryland lawmakers are able to act decisively, Barch said a recreational industry could be up and running as early as 2024.
He wants all new licensees to be social equity applicants, meaning people who are economically disadvantaged or have been disproportionately harmed by the war on drugs. He wants lawmakers to allow the existing medical cannabis industry to participate in the recreational cannabis industry, but cap the amount of plants that cultivators can grow to carve out an opportunity for new licensees.
“Maryland has an opportunity to have the most progressive social equity bill in the country,” Barch said. “And we should attack it and we should attack it now and not wait.”