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Maryland Cannabis: 2024 Regulatory and Legislative Updates

5 July 2024 / Category: Blog

What Are the Recent Regulatory Changes?

Approval of Emergency Regulations

In June 2024, Maryland’s cannabis industry saw significant updates. Emergency regulations were filed with the Joint Committee on Administrative, Executive, and Legislative Review on March 11, 2024, and approved as of June 6, 2024. These regulations will be in effect until August 30, 2024. Proposed permanent regulations were published on May 3, 2024, and are pending final approval expected in September (source: Maryland Register).

Key Takeaways from the Emergency Regulations

The emergency regulations mandate that licensees demonstrate adequate capitalization within six months of being issued a conditional license. Additionally, management agreements have been defined and regulated to ensure that management companies must be registered and in good standing with the State Department of Assessments and Taxation. These agreements must not grant unilateral control or major decision-making authority to management companies, ensuring that licensees maintain significant control over their operations (source: Maryland Cannabis Administration).

When Did Legislative Changes Take Effect?

Legislative Changes

Three significant bills affecting the cannabis industry were approved during Maryland’s legislative session and took effect on June 1, 2024.

  • HB272: Cannabis Licensing and Registration – Use of Straw Ownership – Prohibition
    This bill prohibits the use of straw ownership in cannabis licensing, defining “genuine ownership” and imposing criminal penalties for violations (source: Maryland General Assembly).
  • HB805: Cannabis – Licensee Locations – Restrictions
    This bill restricts political subdivisions from adopting zoning requirements for dispensaries and growers that are more restrictive than those for liquor stores and hemp farms (source: Maryland General Assembly).
  • HB253: Cannabis Reform – Alterations
    Effective from April 25, 2024, this bill includes a variety of changes to the Cannabis Reform Act, such as the definition of cannabis and the introduction of cannabis nurseries (source: Maryland General Assembly).

Where Will the Legislative Changes Have an Impact?

Location and Zoning

HB805 impacts the ability of political subdivisions to impose zoning restrictions on cannabis dispensaries and growers. It standardizes zoning requirements to prevent excessive restrictions compared to those for other types of retailers, such as liquor stores. This bill allows local governments to set distance limitations for dispensaries and residential zones, affecting how and where cannabis businesses can operate (source: US News).

Why Are These Changes Important?

Impact on the Cannabis Industry

These changes are crucial as they address issues related to ownership, control, and the operational environment of cannabis businesses. By prohibiting straw ownership and ensuring genuine ownership, HB272 aims to create a more transparent and fair market. HB805’s restrictions on zoning ordinances protect cannabis businesses from overly restrictive local regulations, fostering a more supportive environment for their growth. The amendments in HB253 provide clarity and new opportunities, such as the establishment of cannabis nurseries (source: Forbes).

Who Will Be Affected by These Changes?

Affected Parties

Cannabis licensees, potential business owners, and political subdivisions in Maryland will be significantly affected by these regulatory and legislative changes. Current licensees must review their agreements and ensure compliance with new ownership and operational regulations. Local governments must adjust their zoning laws to align with the new state standards. Additionally, businesses looking to enter the market will need to navigate these updated regulatory landscapes (source: Maryland General Assembly).

How Will These Changes Be Implemented?

Implementation Process

The implementation process involves several steps. The approved emergency regulations are already in effect and will continue until the permanent regulations are finalized. Businesses must comply with these regulations and may need to adjust their operations accordingly. The legislative changes require immediate compliance, and businesses must review and potentially amend their current agreements and practices to align with the new laws. Local governments will also need to revise their zoning regulations to comply with state requirements (source: Maryland Cannabis Administration).


References

  1. Maryland Register: Emergency Regulations
  2. Maryland Cannabis Administration: Regulatory Updates
  3. Maryland General Assembly: Legislative Bills
  4. US News: Cannabis Industry Updates
  5. Forbes: Impact on Cannabis Industry