Maryland Cannabis License Application

Maryland Cannabis License Applications are coming for late 2023 if House Bill 556 passes and becomes law. Maryland voters legalized cannabis for adult use in the 2022 election, which required the legislature to create an enabling statute. House Bill 556 provides for how the state will legalize cannabis.  In this article we go over how many licenses will be available and what type of application is required to get a license in Maryland.

Maryland Cannabis License Application Requirements:

To be considered for a license, social equity applicants must meet certain qualifications, pay an application fee, and submit an application developed by the Division. Here is a breakdown of the requirements and limitations:

1. Application Fee: The application fee for social equity applicants must be in accordance with § 36–403 of this subtitle. This fee is required to cover the cost of processing and evaluating the application.
2. Application Development: Social equity applicants must complete an application developed by the Division under this title. The application includes questions about the applicant’s qualifications, business plan, and other relevant information. This ensures that all applicants are evaluated on the same criteria.
3. First Round Lottery: For the first round of licensing, the Division will enter each social equity applicant that meets the minimum qualifications into a lottery. The number of licenses issued will be limited as follows:

For Standard Licenses:

• 20 Grower Licenses
• 40 Processor Licenses
• 80 Dispensary Licenses

For Micro Licenses:

• 30 Grower Licenses
• 30 Processor Licenses
• 75 Dispensary Licenses

10 Incubator Space Licenses will be issued.

Maryland Cannabis License Application Process: 

The Division shall evaluate applications for the lottery on a pass-fail basis, allowing them to determine whether an application meets all requirements:

1. Detailed operational plan for safe, secure, and effective cultivation, manufacture, or dispensing of cannabis.
2. Business plan demonstrating a likelihood of success, sufficient business ability and experience, and appropriate employee working conditions.
3. Detailed diversity plan to promote diversity in the cannabis industry.

Under the law, first round application submissions for all license types are limited to social equity applicants subject to paragraph (2) of this subsection.

If the Office of the Attorney General finds that license winners lack diversity, a disparity study will be done to identify measures needed to assist minorities and women in cannabis. Those applicants who meet minimum qualifications set by the Division are then put into a lottery for further consideration.

The lottery will issue licenses to the applicants not more than a certain number, depending on the license type. Here are the maximum numbers of licenses that can be issued for each license type:

For standard licenses:

• 25 grower licenses
• 25 processor licenses
• 120 dispensary licenses

For micro licenses:

• 70 grower licenses
• 70 processor licenses
• 125 dispensary licenses

Additionally, there are 10 incubator space licenses and 15 on-site consumption licenses available.

The Division evaluates lottery applications on a pass-fail basis to ensure they meet the minimum qualifications. The application must include:

1. A detailed operational plan for the safe, secure, and effective cultivation, manufacturing, or dispensing of cannabis;
2. A business plan demonstrating a likelihood of success and sufficient business ability and experience on the part of the applicant, and providing appropriate employee working conditions;
3. A detailed diversity plan; and
4. Remedial measures established in accordance with a disparity study.

Once the Office of the Attorney General has confirmed that the applicants who were granted licenses under subsection (D) of this section represent diversity, regardless of the results of a disparity study, the Division will include each qualified applicant in a lottery and award them no more than the following licenses:

For Standard licenses:

• 25 grower licenses;
• 25 processor licenses; and
• 120 dispensary licenses;

For Micro licenses:

• 70 grower licenses;
• 70 processor licenses; and
• 125 dispensary licenses;

With 10 incubator space licenses; and 15 on-site consumption licenses.

The Division will evaluate each application to determine if it meets the minimum qualifications for the lottery, based on a pass-fail system, and will consider the following factors:

1. A detailed operational plan for the safe, secure, and effective cultivation, manufacture, or dispensing of cannabis;
2. A business plan demonstrating the likelihood of success and sufficient business ability and experience on the part of the applicant, and providing appropriate employee working conditions;
3. A detailed diversity plan; and
4. For all license types except micro licenses, whether or not the applicant qualifies as a social equity applicant.

The second round of application submissions for micro licenses is focused specifically on social equity applicants. The Division will utilize a market demand study to award as many cannabis licenses after the initial lottery based on pre-determined factors they develop, and may limit some or all issued under this paragraph to Social Equity Applicants or Minority Businesses in order encourage larger industry diversity.

Accepting and Processing of License Applications

1. In response to a request for applications issued under this section;
2. Applications will be accepted for a period of 30 calendar days; and
3. The application period will begin on a date that is at least 60 calendar days after the date on which the division issued the request.
4. The division shall begin issuing first round licenses in accordance with subsection (D) of this section on or before January 1, 2024.
5. The division shall begin issuing second round licenses in accordance with subsections (E) or (F) of this section on or after May 1, 2024.

How much does it cost to apply for a cannabis license in Maryland

1. For a standard license, an incubator space license, or an on-site consumption license, the applicant shall pay an application fee of $5,000.
2. For a micro license, the applicant shall pay an application fee of $1,000.

It is important to understand the requirements and limitations that come with these licenses. By meeting the enumerated requirements outlined above, applicants can position themselves for success in the industry and help promote equity and diversity.

If you are a small business owner or social equity applicant interested in obtaining a micro license, we encourage you to research and understand the requirements in your state. Stay informed about upcoming license awards and deadlines, and be sure to submit a strong application that demonstrates your commitment to social equity and community engagement.

Together, we can work towards a more diverse and inclusive cannabis industry that benefits everyone involved.  Contact our offices today to speak with a cannabis lawyer that has won licenses before.