Maryland marijuana legalization expected to pass in November, but details pending

Maryland voters appear likely next month to approve the cultivation and sale of recreational marijuana, but state lawmakers must the pass legislation establishing a regulatory framework governing the new market.

Assuming the Nov. 8 ballot initiative passes, retail sales are expected to start in 2024 or 2025, with annual revenue likely totaling hundreds of millions of dollars soon after the market’s launch.

Based on the legislation establishing the ballot initiative, any new market would be crafted with an emphasis on social equity and a diverse makeup of businesses and entrepreneurs.

The latest polling shows a majority of Maryland residents support adult-use marijuana legalization.

But Eugene Monroe, the Yes on 4 campaign chair, isn’t resting until the ballot question goes to voters on Nov. 8.

“While we’re encouraged by recent polls, we are not taking any votes for granted,” Monroe, who is also a former NFL player for the Baltimore Ravens, told MJBizDaily via email.

Next month’s vote comes after Maryland lawmakers earlier this year referred the issue of recreational marijuana to voters.

Maryland is among four states where voters will decide next month whether to approve the cultivation and sale of recreational marijuana.

The other states are Arkansas, Missouri and North Dakota.

In South Dakota, residents will vote on a narrow referendum that would legalize possession and home cultivation.

But it would not pave the way for a commercial marijuana market.

Polls predict passage

In Maryland, prospects for passage of adult-use legalization appear good.

A Washington Post-University of Maryland poll of 810 registered voters last month showed 73% support legalizing “the use of cannabis” for adults 21 years of age and older by next July.

Legalization is favored especially by voters younger than 40, with 87% supporting the initiative.

“Maryland residents want to legalize cannabis because they know it will create good-paying jobs, boost the state’s economy, and empower local law enforcement to focus its limited resources on combating violent crime,” Monroe said.

If the campaign – which is financially supported by Florida-based multistate operator Trulieve Cannabis – is successful, sales won’t start immediately.

Instead, the proposed constitutional amendment instructs the Maryland Legislature to pass distribution, regulation and taxation laws for cannabis, according to Ballotpedia.

That process could be completed in next year’s legislative session, but some final details likely will need to be ironed out in 2024.

Among other things, lawmakers are unlikely to rush through the legislation before the expected release in mid-2023 of a so-called “disparity study” that will offer guidance on how to develop a diverse, equitable recreational marijuana industry.

In the meantime, adults would be allowed to possess up to 1.5 ounces of cannabis and cultivate up to two plants for personal use on or after July 1, 2023.

Market size

A recreational marijuana market in Maryland would likely approach $1 billion in retail sales not long after launch, based on the state’s robust medical cannabis industry and other states that have legalized adult use.

According to the 2022 MJBiz Factbook, medical cannabis sales via dispensaries in Maryland were between $525 million and $625 million last year,

They’re projected to reach $600 million-$725 million in 2022 and as much as $850 million by 2026.

Licensing

A number of local and multistate operators would compete for adult-use licenses – such as the existing medical cultivators and retailers already operating in the state, including Trulieve, Curaleaf Holdings, Green Thumb Industries and TerrAscend, which in April acquired Allegany Medical Marijuana Dispensary.

“I could not be happier about how well positioned we are for the possible launch of Maryland’s adult-use program in mid-2023,” TerrAscend Executive Chair Jason Wild said about the acquisition in a statement.

But it’s not yet clear if there will be a limited number of licenses or if medical operators will have first dibs.

“Where the existing medical cannabis businesses will be in the licensing process for adult use will of course be a huge question,” Olivia Naugle, senior policy analyst at Washington DC-based Marijuana Policy Project (MPP), told MJBizDaily via email.

“MPP will be advocating for not capping licenses to ensure lots of opportunity in the industry or having set aside licenses for social equity and/or a head start if there are caps, having low barriers to entry, and ensuring a bulk of the tax revenue is reinvested into the communities most impacted by prohibition.”

Social equity front and center

Monroe noted that Maryland’s marijuana ballot measure prioritizes social equity.

“Its passage would end future incarceration for cannabis possession convictions and expunge the criminal records of people whose only charge is cannabis possession,” he said.

Legislators have already passed bills that will take effect, such as the creation of a:

• Cannabis Business Assistance Fund to support minority- and women-owned small businesses seeking to enter the legal cannabis market.
• Community reinvestment fund to assist organizations serving communities disproportionately harmed by the war on drugs.

“These provisions will empower entrepreneurs from communities that have been disproportionately harmed by marijuana prohibition to enter the well-regulated and safe cannabis market, regardless of whether they have previously operated in the medical market,” Monroe said.

Stakeholders are also awaiting the results of a “disparity study” by the Natalie M. LaPrade Medical Cannabis Commission designed to help inform policies to improve diversity in both the medical and adult-use marijuana markets.

According to the legislation directing the study, it must be completed by March 1, 2023.

“Depending on the results, the study can be used as a tool to ensure diversity in an adult-use industry in Maryland,” MPP’s Naugle said.

Source: https://420-reports.com/wp-admin/post.php?post=3908&action=edit