How to Open a Dispensary in Maryland

After legalizing medical cannabis in 2014, Maryland has long awaited the approval of an adult-use program, which most residents support.

An ongoing state cannabis legalization referendum shows much interest and support for shifting cannabis-related tides. The “Yes on 4” campaign recently revealed that 69% of surveyed eligible state voters support the referendum’s proposal. Thus, complementary legislation to implement regulations for cannabis would be triggered if approved. 

Furthermore, nearly 60% of survey respondents display a significant interest in cannabis legalization. 

Another recent poll showed that 75% of registered voters in the state want to legalize legal cannabis, with democrats and republicans showing substantial support. 

Compared with other states who’ve already legalized the adult use of cannabis, the question of how to open a dispensary in Maryland has a murkier answer. Still, medical dispensaries are legal. 

With legalization on the cusp of being a reality, it's wise to start familiarizing yourself with Maryland's cannabis landscape to help prepare yourself for the adult use licensing process. This guide will help teach you how to open a dispensary in Maryland. Let's jump in.

In November 2022, Maryland voters will answer whether they favor legal cannabis use for individuals 21 and over.

If voters help pass this legalization referendum, another bill will be implemented to regulate the adult-use market. Maryland Governor Larry Hogan allowed this all to come to fruition without his signature. 

The complementary law would legalize the purchases and possession of a maximum of 1.5 ounces of cannabis for adults. Criminal penalties for possession up to 2.5 ounces would also be removed. Additionally, adults of 21 and over will be legally allowed to grow a maximum of two cannabis plants for personal use and as a gift. 

While Maryland is relatively late to the party regarding adult-use legislation, medical cannabis has been legal in the state since 2014. Moreover, decriminalization for possessing under 10 grams of cannabis was enacted that same year.

Since recreational marijuana isn’t yet legal in Maryland, you can’t open a dispensary that isn’t for medical use.

So, the rest of this guide is meant to help people enter the medical cannabis sector. However, keep the above information in mind because the landscape is on the precipice of wide-sweeping changes. Thus, it's best to get ahead of such a massive transformation and prepare for the likelihood of legalization.

First, we’ll point out that medical cannabis in Maryland operates via the Natalie M. LaPrade Maryland Medical Cannabis Commission (MMCC).

As the regulatory agency for Maryland’s medical cannabis industry, the MMCC covers all policies, regulations, and procedures involving medical cannabis across the state.

Opening a legal medical cannabis dispensary in Maryland involves the following processes to satisfy the requirements of the MMCC:

• Submit an application to the MMCC, pay the application fee, and provide the potential dispensary's physical address and legal name.
• Each principal officer and director must provide their name, date of birth, and address. None of these individuals can be associated with a dispensary that’s had its license revoked.
• You must explain your intended operation procedures. 
• The commission must prioritize minority business enterprise applicants. 
• The numbers of women and minority owners must be reported by dispensaries. Dispensaries also must report the number of minority and women employees and if there’s any interest in ownership shown by minorities or women:
  • Failure to submit these reports to the commission before June 1 and failing to submit the annual report can lead to a $5,000 fine per violation, license revocation, suspension, or both. 
• A single person can only have ownership interests in a maximum of four dispensaries.
• Initially, dispensary licenses last for six years. Once they’re renewed, licenses are valid for four years. 
• Dispensaries are subject to commission inspections, which can lead to a loss of license or other penalties in instances of non-compliance. 
• Owners must supply quarterly reports containing the following: 
  • Total number of patients served, on top of each patient’s county of residence and qualifying medical condition
  • Amount and type of dispensed medical cannabis
  • Clinical outcome summary
  • Q1 to Q4 Report, Yearly Annual Agent Report, Clinical Director Report, and Organization, Ownership, and Control Disclosure Report.
• No identifying patient information can appear in quarterly reports.

Similarly to many medical states without an adult use program, the key is going to be keeping your ear to the ground for new updates on the legislature. Although adult use cannabis appears to be on the verge of legalization, there is no clear framework for how licensing will operate. As a general rule of thumb, it's wise to familiarize yourself with the state's existing medical program, as some of the license application requirements will likely parallel the ones from the medical round. 

As for medical dispensaries, there’s an extended waiting game involved. The licensing timelines and processes vary across Maryland, and the MMCC isn’t accepting any dispensary applicants as of this writing. The last round of applications closed in 2019, with many successful applicants delayed getting started due to regulatory issues.

After legislation is passed and the specific processes for adult use license applications are announced, you’ll apply through the MMCC. At this time, you'll need to start preparing your leadership team, figuring out your financials, and assembling the resources you'll need to prepare the application.

Below is a list of potential medical cannabis licenses you can obtain from the MMCC during eligibility periods and how much you'll pay for each. Please consider that these are fees for the medical program, not for a potential adult use program, which will likely have a different fee structure.

• Grower-only fees:

• • $6,000 application fee ($2,000 for stage 1, $4,000 for stage 2)
  • $125,000 annual license fee

• Growing and dispensary fees:

• • $11,000 application fee ($3,000 for stage 1, $8,000 for stage 2)
  • $165,000 annual licensing fee

• Licensed processor fees:

• • $6,000 application fee ($2,000 for stage 1, $4,000 for stage 2)
  • $40,000 annual license fee

• Licensed dispensary fees:

• • $5,000 application fee ($1,000 for stage 1, $4,000 for stage 2)
  • $40,000 annual license fee

Maryland uses Metrc (Marijuana Enforcement Tracking Reporting Compliance) as their medical cannabis tracking and tracing system. Anyone aspiring to run a medical cannabis dispensary will need this system for compliance, as it is state-mandated.

Metrc is a software platform that's web-based and designed to track the cannabis supply chain end-to-end, from seed to point of sale. Included under Metrc's umbrella are the following:

• Manufacturing
• Production
• Testing
• Distributing
• Selling

We can't be 100% sure Metrc will be in play once adult use is legalized, but we hypothesize it will.

Opening a dispensary in Maryland will involve hiring staff or “agents.”

Before volunteering or working at a dispensary, anyone selling medical cannabis in Maryland must be 21 or older and registered with the MMCC. Furthermore, agents will be subject to background checks and drug screens.

Opening a dispensary in Maryland is not straightforward because of the uncertainty around the timeline for adult use legalization. However, the licensing application process is sure to be arduous, as it is in other states with comparable cannabis programs to Maryland.

While we wait for legislation updates in Maryland, we recommend getting a jump start preparing for the application process by structuring your leadership team, sorting out your finances, and formulating an application strategy for when it becomes available. We've helped clients in various states like Virginia, New Jersey, Pennsylvania, Massachusetts, and others to prepare for application submission and obtain licensure. We can help advise you on your options in states like Maryland that have not yet come online with their adult-use program.

We’re eager to answer any questions you have about opening a dispensary in Maryland. Reach out to MOST today to learn more about our processes and how we can help you obtain a license.