Maryland lawmakers are considering legislation that would regulate medical and recreational cannabis in the state. Here are a few takeaways from Senate Bill 516:

• Emphasis on Social Equity: Within the Alcohol, Tobacco, and Cannabis Commission (the Commission), the Office of Social Equity oversees the Commission’s social equity program. The Commission will reserve $5 million each fiscal year to give as grants to existing licensees who enter into qualifying partnerships with social equity licensees. There is also a Capital Access Program to incentivize financial institutions and credit unions to make loans to small businesses and social equity licensees. All licensees are required to provide an annual report to the Cannabis Regulation and Enforcement Division (the Division) disclosing (1) the number of minority and women owners on the license, (2) the ownership interest of any minority and women owners of the cannabis licensee, and (3) the number of minority and women employees of the cannabis licensee.
• Existing License Holders and Social Equity Applicants: The Division shall convert medical cannabis grower, processor and dispensary licenses, including businesses preapproved for licensure, into dual licenses on or before July 1, 2023, if they pay a conversion fee. This conversion fee is calculated based on the licensee’s total gross revenue in 2022 and whether it was operating before October 1, 2022. A set number of licenses have been set aside for those who currently own a medical grower, processor or dispensary license, as well as social equity applicants.
• On-site Consumption Licenses: In addition to the standard grower, processor and dispensary licenses, there are also on-site consumption licenses. The Division shall issue no more than 50 on-site consumption licenses. An on-site consumption establishment may operate only if the county or municipality where the business is located has issued a permit or license that expressly allows the operation of an on-site consumption establishment. If an individual is thinking of applying for an on-site consumption license, it is important to understand and stay up to date with local rules and regulations.
• License Limitation: Individuals in the market to acquire other licenses should think twice. Under this bill, a person may have an ownership interest in or control of, including the power to manage and operate, in no more than 1 grower license, 1 processor license, 2 dispensary licenses, 2 incubator space licenses and 2 on-site consumption licenses. A person who owns or controls an incubator space licensee or an on-site consumption licensee may not own or control any other cannabis licensee. The Division will adopt regulations to limit a person or fund from acquiring a non-majority ownership interest to enforce the license limitation.
• Blackout Period: A cannabis licensee may not transfer ownership or control of the license for at least 5 years following licensure unless the transfer is necessary due to the death of an owner.
• Regulations: The Division plans to adopt emergency regulations by July 1, 2023.

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