A proposed expansion into recreational marijuana for adults could be hampered by a limit on licenses in the medical cannabis industry.
The issue of licenses is expected to be a flashpoint as lawmakers consider the growth of the legal marijuana industry. All but one available medical cannabis license in Maryland has been issued.
Ensuring adequate supply and prices that won’t be undercut by the black market present a challenge. Maryland has already seen high demand for the medical product. Existing growers and processors will likely want to move into an expanded market. The expansion is similar to the legalization of sports betting that so far has benefited the established players in the industry — casinos and other existing gaming facilities — as newcomers and minority groups hope to claim a piece of the action.
In the medical marijuana industry, additional licenses probably are needed.
“Our hands are very much tied when it comes to trying to further facilitate equity in the industry because there’s no licenses we have the ability to award,” Will Tilburg, executive director of the Maryland Medical Cannabis Commission, told the Senate Finance Committee Tuesday.
The General Assembly is considering legislation that could legalize recreational marijuana. A package of House bills would put the issue to voters in November. Those bills have hearings Wednesday in the Senate Finance Committee.
House Speaker Adrienne Jones insists that the state’s cannabis expansion, as with sports betting, include opportunities to build generational wealth through licenses for Black and women owners.
Maryland isn’t alone in struggling to ensure ownership diversity in the fledgling industry.
“In our contemplation of adult use there’s been a lot of discussion related to equity and .. both growers and processors … kind of have a corner on the market or a monopoly,” said Sen. Antonio Hayes, D-Baltimore and a member of the Finance Committee.
Hayes said he and other lawmakers want “to eliminate or overcome those barriers “where people may not feel like they get a fair shot, and create greater equity in the market.”
The state struggled with inclusion of minority owners in the medical cannabis industry. A 2018 law made Maryland just the second state to make a serious attempt to solve the issue.
The law expanded the number of grower licenses from 15 to 22. The new law added 13 to the 15 already issued. About half of each were then set aside for applicants who fell below the cut when the first round of licenses were awarded.
All of the licenses created in the law ultimately went to “minority or disadvantaged” owners, Tilburg said. One license remains available and has been the subject of an administrative appeal by one applicant who was initially rejected.
Tilburg said the 2018 law also “prevents the commission from even telling (the legislature) if we think there should be additional licenses. Not until 2024 are we able to submit a report on whether the demand is such that additional licenses would be necessary. “
Tilburg told the committee that the issue of equity is in the forefront of the minds of the commission.
“It’s something that a lot of states are facing challenges with: How do we increase equity? How do we assist the businesses that are more diverse that do have licenses?” said Tilburg. “But in terms of the current medical program and what the commission can do, we don’t have the ability to issue any more licenses.”