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Maryland lawmakers dig into details of marijuana market, as legalization looms as a top issue

Maryland lawmakers have begun grilling experts on marijuana policy over the past week as politicians gear up for a looming legislative session where legalizing the drug for adult recreational use appears slated to be a top issue.

Delegates heard from an outside legal expert and the heads of the state’s alcohol and medical marijuana regulatory agencies at a Tuesday afternoon work group meeting aimed at exploring how Maryland might shape the rules around a recreational market.

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The lawmakers expressed concern at the meeting about how to ensure new startups — particularly small minority-owned ventures — can compete against established marijuana companies and capture a large share of the potentially lucrative recreational market.

House Speaker Adrienne A. Jones, a Baltimore County Democrat, created the work group earlier this year after throwing her support behind a potential statewide voter referendum next year on whether to allow adults to buy and use marijuana legally in the state.

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Polls in recent years have consistently shown a majority of Marylanders support allowing recreational marijuana.

Maryland politicians have studied recreational marijuana issues before, including a 2019 joint work group, but in past years have delayed on tackling the issue, including setting aside bills last spring from Prince George’s County Del. Jazz Lewis and Montgomery County Sen. Brian J. Feldman, both Democrats.

But Jones’ support put significant new momentum behind efforts to legalize recreational marijuana, something that Senate President Bill Ferguson already had endorsed. Jones said she harbors “personal concerns” about the possibly allowing recreational sales and use but that the “disparate criminal justice impact” of outlawing recreational marijuana had convinced her that “voters should have a say in the future of legalization.”

Ferguson, a Democrat from Baltimore City, pledged that his chamber would pass legislation on the issue this spring. Ferguson hasn’t explicitly endorsed an approach but has hinted that he’d prefer lawmakers act directly to allow recreational marijuana.

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At Tuesday’s meeting, delegates considered policies a number of other states have tried in recent years to try to guarantee that at least some of the licenses to grow, process or sell recreational marijuana end up in the hands of minority entrepreneurs and that larger corporations — including some that are publicly traded on Canadian stock exchanges — don’t dominate the market and gobble up the potential profits.

Suppliers and vendors in Maryland’s existing medical marijuana market also might have a substantial leg up if Maryland opens a legal recreational market as well, a possibility that appeared to worry some lawmakers who have hoped that licenses could spread around wealth to Black entrepreneurs and would-be business owners from lower-income communities.

“I don’t want these mature companies to blow up and stop these minority companies,” said Del. C.T. Wilson, a Charles County Democrat. “I don’t want them to be beaten out of the industry before they begin.”

Mathew Swinburne, at attorney with the Network for Public Health Law-Eastern Region who is advising the legislative work group about policy approaches taken in other states, pointed to licensing preference rules in places like New Jersey and Illinois that reserved some licenses for applicants from certain backgrounds or gave them a leg up in the process.

Swinburne pointed out that the federal ban on marijuana, although not enforced in states that have legalized the drug, has kept most banks and other financial institutions from offering loans or financing to marijuana-related businesses. That’s a major obstacle for smaller entrepreneurs without deep pockets who face six- or seven-figure licensing fees and other startup costs to try to enter the market but have few ways to secure business loans.

About 84% of marijuana businesses were launched using the personal savings of their founders, Swinburne said, something that heavily tilts the industry in favor of the wealthy and disproportionately keeps business owners from lower-income and minority communities out of the market. That’s been a particular issue for policymakers in part, according to Swinburne and several delegates at Tuesday’s hearing, because those communities have borne the brunt of the ‘War on Drugs.’

Another House work group hearing looking at marijuana taxation policy is scheduled for Dec. 1. Senators also are examining the issue.

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