Maryland lawmakers have passed a new bill aimed at clarifying the rules for on-site marijuana consumption businesses and establishing guidelines for a second cannabis licensing lottery. The bill also allows cannabis company owners to sell their businesses to employees before the current five-year waiting period ends.
The legislation was prompted by requests from regulators who wanted clearer policies regarding social consumption sites, which were initially addressed in the legalization law signed by Governor Wes Moore (D) in 2023. This new bill, introduced by the chairs of the Senate Finance Committee and House Economic Matters Committee on behalf of the Maryland Cannabis Administration (MCA), includes specific definitions for what constitutes a “cannabinoid beverage” that can be served at consumption lounges. These beverages must not exceed 5mg of THC per serving.
Additionally, the measure allows consumption lounges to operate as food service facilities, giving them the ability to offer non-infused food alongside their approved marijuana products. However, these lounges will need to obtain various permits, including building code permits and occupancy certificates, before they can operate as food service establishments.
Originally, the bill prohibited smoking and vaping on-site, but it was amended to let localities decide whether to ban indoor smoking or vaping while permitting outdoor consumption. Key provisions that would have created a new permit category for temporary cannabis events were removed from the legislation.
Before the state can hold the second business licensing lottery, a disparity study must be conducted to evaluate potential discrimination against minority- and women-owned firms in the Maryland cannabis market. If the study indicates a disparity, the lottery process will include measures to address these issues. If not, all applicants will qualify for the lottery.
The upcoming licensing round will allow for the approval of up to 25 grower licenses, 25 processor licenses, and 120 dispensary licenses. The MCA may also issue an additional 70 microbusiness licenses for growers and processors, along with 10 incubator space and 15 on-site consumption lounge licenses.
While the bill maintains that cannabis business licenses cannot be sold for five years post-issuance, it includes a provision allowing for transfers to employees through an employee stock ownership plan. Moreover, medical cannabis dispensaries are permitted to continue delivering products to patients until July 1, 2026, despite current law set to end delivery options in July of this year.
