Maryland’s cannabis regulators announced Friday plans to make it easier for those hoping to start businesses in the estimated $1 billion industry to determine if they qualify for special licenses intended to redress the effects of the drug’s criminalization.
Taking the guesswork out of eligibility for what’s called social equity licenses, the state will open a verification portal for 60 days, starting Sept. 8, at which entrepreneurs can check for free prior to paying thousands of dollars to apply for a license. It’s a small step closer to issuing the first additional round of business licenses for newly legalized recreational cannabis.
The cannabis reforms signed by Gov. Wes Moore this year generally established the criteria for geographical areas harmed by cannabis prohibition. But the Office of Social Equity had the job of locating which geographical areas that included. Maryland is one of the first states in the nation to reserve a round of licensing for social equity grower, processor and dispensary applicants.
The eligibility criteria posted on Friday included a list of ZIP codes and public schools in communities with an above-average number of cannabis-related criminal charges and Maryland universities with a significant percentage of students receiving needs-based federal Pell Grants.
The announcement comes just under a month after Office of Social Equity Acting Executive Director Audrey Johnson took on the job of ensuring that Maryland’s cannabis industry has a diverse pool of business owners.
Johnson said she’s seen a “huge commitment by the administration around getting this right.” Her office will look at the industry through a social justice lens and support entrepreneurs with technical assistance, she said.
According to the law, eligible applicants had to have lived in an area that experienced above 1½ times the 10-year average of cannabis possession charges, according to the last 10 years of court data. That’s the state’s formula for figuring out which communities were disproportionately policed during cannabis prohibition.
When they compared that criteria against court dates, they got a list of 85 ZIP codes in 20 counties. The bulk, over 64%, were in three jurisdictions, Baltimore City, Baltimore County and Prince George’s County.
Within these 85 ZIP codes are hundreds of public schools. If an applicant attended one of the schools on the list for at least five years, that makes them eligible.
Applicants can also qualify if for at least two years they attended one of Maryland’s four-year universities where 40% of students between 2012 and 2021 used Pell Grants to pay for school. Those schools are Bowie State University, Coppin State University, Morgan State University, the University of Baltimore, the University of Maryland Eastern Shore and Washington Adventist University.
The state has set aside $80 million in capital grants and loans for cannabis businesses, according to the Maryland Department of Commerce.
Johnson acknowledged the challenging road ahead in “repairing the harm that has been done, and giving those that would not normally have access to this industry an opportunity to participate and support them.”
But the first step was to streamline eligibility, she said.
“At first blush, Maryland’s portal appears to be a novel approach to the 38 states respective marijuana licensing programs,” said Steve Schain, an international cannabis attorney who practices cannabis law in the 38 states where weed has been made legal.
Schain warned about the downsides of the industry.
“While providing transparency and clarity to a license award process is helpful,” Schain said, “perpetuating delusions of grandeur is not.” The cannabis industry is an “extremely competitive and extremely narrowly profitable industry,” he said.
“Perpetuating unrealistic dreams of running a business is not necessarily helpful to entrepreneurs,” he said.
Trevor Edwards plans to apply for a license when applications open this fall. The 47-year-old business owner from Prince George’s County said he’s considering a processor or dispensary license for smaller businesses.
Looking at the online list of ZIP codes with a reporter, Edwards discovered that he was eligible, but he said he’d use the portal once it opens just to “check all the boxes.”
Edwards said he always has an “ear to the ground” for the latest news from the administration, especially for news on the application itself.
Will Tilburg, acting director of the Maryland Cannabis Administration, said the application process will start after the portal closes in November. Meanwhile, his team is working on developing the application.
“We’ll be ready to meet all of our projected timelines and deadlines,” he said.