Maryland Regulators Propose Emergency Rules for Adult-Use Cannabis Industry

Maryland regulators took a step toward launching the state’s adult-use cannabis market May 25, when the Maryland Cannabis Administration (MCA) announced proposed emergency rules for the forthcoming industry, which is expected to launch July 1.

Gov. Wes Moore signed legislation into law last month to implement Maryland’s voter-approved legalization measure, which passed in the November 2022 election.

That 100-page bill established the MCA to oversee both the medical and adult-use cannabis markets, as well as detailed the number and types of adult-use cannabis business licenses that will be available. The legislation also levied a 9% sales tax on adult-use sales and directed the revenue generated to first cover the cost of overseeing the cannabis program, with 35% of any additional funds flowing to a Community Reinvestment and Repair fund to support communities disproportionately impacted by the war on drugs.

Maryland’s roughly 100 medical cannabis dispensaries are able to convert their licenses to serve the broader adult-use market, and new adult-use licenses will be issued in two licensing rounds—the first launches Jan. 1, 2024, and is reserved for social equity applicants.

RELATED: Maryland Medical Operators Reflect on State's Adult-Use Rollout

The MCA’s proposed emergency regulations include provisions aimed at further implementing the adult-use market, according to an MCA press release, including:

• Allowing existing medical licensees to convert to a new license authorizing the cultivation, manufacturing, and sales of both medical and adult-use cannabis;
• Creating a single-supply chain for all products grown or produced in the state;
• Establishing the application and licensing process for new businesses;
• Establishing new license categories and types;
• Detailing procedures for the safe and secure sale and dispensing of cannabis to adult consumers; and
• Authorizing the dispensing of certain cannabis products to consumers over the age of 21.
  

The emergency rules also supplement the regulatory framework for the state’s medical cannabis program to ensure that registered patients and caregivers have an adequate supply.

According to the press release, these supplemental medical cannabis provisions include:

• Maintaining best practices for licensee security protocols, operations, safety, and product testing from the medical cannabis program;
• Establishing special accommodations for medical patients, including:
  • Reserved patient hours for medical-only dispensing;
  • Reserved patient lanes at the licensed dispensaries; and
  • Reserved products for medical patients.
• Maintaining the existing patient and caregiver registry and registration process;
• Ensuring all dispensaries retain clinical directors to provide education to patients on the medical use of cannabis; and
• Continuing the ability for medical patients to access products through delivery services.

The proposed emergency regulations also start rolling out social equity provisions by implementing the Social Equity Partnership Grant Program, creating reduced licensing and renewal fees for social equity businesses, and requiring existing cannabis businesses to distribute to or reserve distribution space for social equity businesses, according to the press release.

The rules are currently awaiting approval by the Joint Committee on Administrative, Executive, and Legislative Review (AELR), but the MCA expects the regulations to take effect by July 1, according to the press release.

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