Maryland officials released draft regulations to govern the adult-use marijuana industry that will be launched in July, in accordance with the legalization referendum approved by voters last year.
Weeks after Gov. Wes Moore (D ) has signed the cannabis sales legislation into law . The Marijuana Cannabis Administration submitted a set of first rules for the marijuana industry to the Joint Committee on Administrative, Executive, and Legislative Review on Friday.
This panel will have to review and approve emergency regulations that will be published in Maryland Register, before they are enacted.
The relatively rapid turnaround of the proposed regulations is a sign that Maryland plans to have an active recreational market in place by July 1, , the date set for‘s implementation of the voter-approved legalization.
The 41-page draft rule outlines the rules, defines, and codifies definitions. It also explains the licensing protocol, including for applicants who are seeking social equity, and clarifies penalties, enforcement authorities, and packaging requirements.
The focus is on the conversion of existing medical marijuana businesses into dual licenses in order for them to serve adult consumers. They would be forced to do this if they wanted to continue to operate. The rules cover different license types, such as microbusinesses or on-site consumption centers.
It also includes rules on delivery services, online orders, THC limits and advertising.
Jonathan Havens, an attorney with Saul Ewing LLP told Marijuana Moment, that the Maryland draft regulations have a unique “convert or perish” scheme. This requires medical cannabis dispensaries in Maryland to obtain a dual licence to serve both patients and adults by July 1, or cease operation.
Havens wrote in an email that MD does not abandon medical patients. Licensees are required to provide exclusive access for qualifying patients and registered caregivers at least for one hour each day the dispensary operates OR to have a dedicated service to serve only qualified patients and caregivers during the licensed premises operating hours.
“Again though, I find that the rules for ‘forced convert’ are a little unique,” he added.
Havens noted that the new rules would limit stores to operating for a maximum of 12 hours a day. This could cause problems with existing medical dispensaries that operate longer than this.
Moore said that while the law he signed “suggested management agreements between licensees, and third parties could be prohibited”, the emergency regulations allow them with certain restrictions.
MCA’s proposed regulations on inventory control and transfer limits for usable marijuana are more restrictive than current policies for medical cannabis operators. Usable marijuana transferred from a dispensary to a grower for the purpose of creating usable cannabis products could not exceed five pounds or one pound per package.
The licensed dispensaries could not have more than 10 lbs of usable marijuana in stock at any one time, “to create usable cannabis products”.
Only registered medical cannabis patients or caregivers can purchase marijuana products with more than 10mg of THC in each serving (or 100mg per package).
Havens pointed out, too, that the threshold of 65 percent for social equity business ownership is “higher” than in some states. Eligibility for this category will be determined by geographic factors like living or going to school in certain regions.
The licenses for medical marijuana dispensaries would only be valid for a period of five years, and they are not allowed to be transferred. According to Havens, this policy “will make raising the capital needed to maintain businesses very difficult.”
Meg Nash is a partner of Vicente LLP and told Marijuana Moment, “the proposed adult use regulations clarify the implementation of adult use licensing in the first round. They also clarify the timing to secure property after the lottery results.”
Businesses selected through the lottery system have 18 months to locate a site and obtain zoning approval. This time frame can be extended by six months if they show that they are making “good faith efforts” to secure a site.
Nash stated that “while this may appear to be a long road to become operational, in practice, it highlights the importance for applicants to start securing funds, identifying property, and researching local restrictions well before the application is released, to ensure their success on the market.”
The AELR Committee has not yet completed its review. It is unclear when the emergency regulations in the Maryland Register will be published. However, it appears the state will have the basic rules in place in time for the legalization of marijuana this summer.
Moore’s regulatory bill, which he signed earlier in the month, covers more ground. It sets a tax rate of nine percent on marijuana products and allocates specific tax revenues.
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The voter-approved referendum legalizes possession of up 1.5 ounces cannabis on July 1. This puts pressure on the regulators to implement the rules as soon as possible.
The House Cannabis Referendum and Legalization Workgroup was created in 2021 by Speaker Adrienne (D).
The members held a number of meetings to inform the future regulations after Maryland voters approved a legalization referendum during last year’s election. This triggered implementation of complementary legislation which covered rules for basic polices like possession and low level home cultivation.
The legislation will remove the criminal penalties for possession up to 2.5 ounces. Adults aged 21 and over will be able to grow two plants of cannabis for their own use, and can gift cannabis to others without payment.
Past convictions of conduct that is now legalized under the proposed legislation will be automatically expunged. People currently serving prison time for these offenses are eligible to resentence. People convicted of possession with intent for distribution can now petition the court for expungement after three years.
Some parts of the referendum came into effect at the start of the year. Possession of less than 1.5 ounces cannabis is now a civil offence punishable with a $100 fine. More than 1.5 ounces or up to 2.5 ounces are subject to a $250 penalty.
Maryland lawmakers began advancing adult-use legalization in 2021, but there were no votes. In 2021, the Senate Finance Committee heard a bill on legalization. This was followed by a House Judiciary Committee on a cannabis proposal.
Maryland legalized medical marijuana in 2012 through a law passed by the Maryland legislature. In 2012, Maryland legalized medical cannabis through an act of the legislature.
Moore has also allowed a recent bill to become law , which prevents the police from relying solely on the smell or possession of marijuana as a basis for a search.
Last week, he also signed a measure that ensures the state will not interpret parents’ and guardians’ use of marijuana in a responsible and lawful manner as “neglect” by children.
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