Maryland’s attempt to promote diverse ownership in its medical cannabis industry has attracted more than 160 applications from firms seeking to score one of the state’s 14 new licenses.
More than a year after state lawmakers and Gov. Larry Hogan passed a law to boost participation by minority- and women-owned businesses, the Maryland Medical Cannabis Commission announced that competition will be fierce for four cannabis growing licenses and 10 for processing the plant into medical products.
Despite the healthy interest by companies, the new application process — like so many other milestones in Maryland’s medical marijuana market — has been marred by malfunction that regulators will work on fixing by Friday.
Many applicants faced technical problems with their submissions as the state’s online portal was inundated at last Friday’s 5 p.m. deadline, commission officials said. But they assured applicants that the technical issues should not prevent anyone from getting a fair shot at a stake in a fast-growing industry that generated $109 million in sales last year.
“We know how hard folks have worked over the past several months to put together highly qualified applications,” said commission chairman Brian Lopez. “The commission does not intend to penalize applicants who would have submitted completed packages on time if they had not encountered system errors beyond their control.”
Lopez said all applicants that submitted their $2,000 application fees will be notified by Friday whether their packages were completed properly or if additional information is required.
Executive Director Joy Strand said the commission will “work with each and every applicant” to address whatever technical issues they might have faced.
“The commission has stressed fairness and transparency throughout the application period, and we remain committed to providing all applicants and stakeholders with a transparent view of the process,” Strand said.
More than two years ago the commission faced significant criticism and lawsuits for how it picked the first 15 companies to grow cannabis. And the state’s Legislative Black Caucus was outraged that companies owned by African Americans did not win any of the preliminary growing licenses.
A state-commissioned “disparity study” confirmed that minorities and women had been shut out of the industry, an analysis that provided the legal support needed to implement “race- and gender-based measures to remediate discrimination,” the study stated.
Strand, Lopez and commission staff have spent much of the past year traveling the state to raise awareness of the new licenses within the minority business community at forums and seminars at community centers, historically black colleges and other places.
Del. Cheryl Glenn, a Baltimore Democrat who has been involved for years in developing industry regulations, said she is hopeful the state’s efforts will result in a more diverse industry.
Glenn praised the commission, the Attorney General’s office and black caucus for devising a process that should add more minority- and women-owned companies to an industry that recorded nearly $50 million in sales for the first three months of this year, four times more than in the same period in 2018, when many dispensaries weren’t open yet.
“We went as far as we could legally to make sure the diversity piece would be real this time, understanding that you can’t set aside licenses,” Glenn said. “Now we have to wait for the final outcome.”
Not everyone has been pleased with the process. Curio Wellness, a Baltimore County cannabis grower started by prominent Democratic supporter Michael Bronfein, sued the commission in March over the process. He asserted the state was jeopardizing the company’s $10 million investment by violating regulations that originally promised a “strictly limited number” of licenses. Bronfein dropped the lawsuit amid criticism from lawmakers, regulators, patients and other growers that it would derail the yearlong effort to improve diversity in the industry.
As of last month, there were 15 licensed growers, 16 processors and 75 retail stores called dispensaries across Maryland with an additional three growers, two processors and 32 dispensaries in preapproval stage.
Once the technical issues are resolved, the commission will turn over review of the applications to “an independent panel of subject matter experts” that will evaluate each based on multiple criteria through July 26.
“I’m sure the commission understands the importance of making sure that we have the diversity that we should have in Maryland,” Glenn said. “I’m hoping most of the licenses will be awarded not only to minorities, but to Maryland minorities. That’s the whole reason we’re doing this.”