Pot Cafés Will Open in July Under Maryland’s Recreational Marijuana Laws!

The long-awaited measure defining how the state of Maryland would establish its recreational marijuana market in the coming months was introduced by lawmakers in Maryland. As of July 1, stores with state licenses will be able to sell recreational cannabis to customers over the age of 21. The bill is 88 pages long.

This legislation establishes guidelines for the commercialization, control, cultivation, and distribution of marijuana in the state of Maryland. In addition, it establishes a fund to support minority-owned firms and outlines the process for allocating company licenses.

Bill Ferguson, the Democratic president of the Maryland State Senate and a representative for Baltimore City, expressed optimism about the legislation at a press conference last week. “It has the potential to serve as a model for the country.”

A “national model,” according to Bill Ferguson, could include everything from how other states with new cannabis legalization laws on the books construct new markets to how markets would be shaped if cannabis were legalized at the federal level.

At present, cannabis law differs from state to state, but it is still federally unlawful to transport the drug across state lines. Proposed sales taxes on recreational marijuana cannot be higher than 6%, but the measure allows for an increase to 10% in 2028.

The new law in Maryland will allow for up to 300 dispensaries, 100 marijuana processing facilities, and 75 cultivation facilities. More “micro-licenses” are issued, allowing for a wider variety of small, specialized businesses to flourish. For instance, micro-growers have a maximum annual yield of 1,000 pounds and can’t grow in an area larger than 10,000 square feet.

The measure legalizes consumption areas, which are illegal in many other jurisdictions. Fifteen licenses will be issued for establishments that will enable marijuana use in a social atmosphere, such as a café. Legislators in Maryland are rushing to meet a July 1 deadline for establishing the state’s new market.

When recreational marijuana sales begin in a few months, state lawmakers hope to discourage the growth of the black market and of dispensaries that operate on the fringes of the law by offering discounts and other incentives to customers who buy from state-licensed businesses.

We’ve seen what happens in places like New York, where there are over 1,400 unregulated dispensaries,” Ferguson added. Since the legal license has taken so long to complete, “the idea of having a sensible marketplace has totally disappeared in New York.”

New York City officials must deal with bodegas instead of state-licensed dispensaries because these stores “gift” marijuana to customers who purchase other items, such as mugs and t-shirts. Such businesses make it difficult for the state to control the sale of marijuana.

One of the biggest challenges, lawmakers say, is making sure minority and women-owned firms get their fair number of licenses. As part of its positive effects, the bill creates an Office of Social Equity to “promote and encourage full participation in the regulated cannabis sector by persons from communities that have previously been disproportionately disadvantaged by the War on Drugs.”

The office will provide applicants with free technical support and propose suggestions for streamlining the procedure. The Act also sets up a Cannabis Business Assistance Fund, which will provide loans to those businesses seeking to get off the ground. These loan recipients will be chosen by the Office of Social Equity.

Growers, processors, and dispensaries that now sell medicinal marijuana may sell recreational pots provided they pay a one-time conversion fee between $100,000 and $2.5 million based on the income brought in by the company. A recent report by Cannabis Public Policy Consulting, a research organization advising Maryland lawmakers on market matters, predicts that annual marijuana use in the state will be 1.8 million pounds.

In January, Michael Sofis, head of research at Cannabis Public Policy Consulting, told the House Cannabis Referendum and Legalization Workgroup that “the linear increase showed that the sales will approach $240 million per month, very fast.”

As the author puts it, “what it indicates is there’s a lot of unpredictability, in a good manner, a lot of room for growth, and that’s that first six months.” The House of Delegates will host a hearing on the marketplace bill on Feb. 17.