This article will examine the Social Equity qualifiers for individuals who aspire to become cannabis business owners in Maryland. Additionally, we will thoroughly review the application process for a business license, which entails utilizing the Maryland Cannabis Administration’s Social Equity Verification Portal.
Background: The Cannabis Reform Act
The introduction of the Maryland medical marijuana industry in 2014 garnered both excitement and criticism. However, the commission tasked with issuing licenses to growers and processors was met with numerous challenges, including delays and a convoluted licensing process. It was evident that the commission was ill-equipped with an insufficient number of staff members, and a general lack of experience.
Many states that have legalized cannabis have faced criticism for the lack of minority-owned businesses in the industry. In 2022, only 15.4% of cannabis business owners in the United States were non-white individuals. This issue has been particularly noticeable during the implementation of medical and recreational cannabis industries nationwide.
In 2022, Maryland voters approved a referendum legalizing marijuana for adults. The Maryland Legislature subsequently passed the Cannabis Reform Act (H.B. 556/S.B. 516) in the spring of 2023. As the state with the most diverse racial population on the East Coast, Maryland is taking necessary measures to address the injustices brought about by the criminalization of marijuana. The focus of the state’s Adult Use cannabis industry is on social equity, as emphasized by Del. C.T. Wilson, the Democratic chair of the Maryland House Economic Matters Committee. The legalization of marijuana for adults in Maryland aims to “take cannabis out of the criminal stream of commerce, protect young Black men from being arrested and dying and, additionally, give back to the communities that were most disproportionately impacted by the war on drugs.”
Maryland law mandates that adult-use cannabis licenses should be granted before January 1, 2024. To ensure that 30% of cannabis businesses in the state are owned by minorities, the Maryland Department of Commerce initiated the cannabis business assistance fund. This fund facilitated grants and loans for small businesses owned by minorities, women, and vendors from communities that were disproportionately impacted by the criminalization of cannabis. Its primary goal was to support existing medical marijuana companies to transition into Maryland’s forthcoming adult-use cannabis market.
The Cannabis Reform Act (HB556/SB516) requires all Adult-Use applicants in Round 1 to qualify as Social Equity Applicants.
Social Equity Applicant Qualification
Licensing for standard and micro cannabis growers, processors, and retailers will exclusively be available to social equity applicants during the initial phase. The Maryland Cannabis Administration (MCA) has set eligibility standards for social equity applicants, which must be met to qualify. Aspiring candidates can verify their qualifications through the Social Equity Verification Portal introduced by the MCA.
Social equity applicants seeking cannabis business licenses in Maryland must control at least a 65% interest in the company and meet at least one of the following criteria:
- Lived in a disproportionately impacted area for at least five of the past 10 years;
- Attended a public school in a disproportionately impacted area for at least five years; or
- Spent at least two years at a four-year college or university in Maryland where at least 40% of enrollees received a Pell Grant.
The Cannabis Reform Act (HB556/SB516) defines a disproportionately impacted area as an area as having above 150% of the state’s 10-year average for cannabis possession charges.
Applying for a license in Maryland requires individuals to provide data that proves the qualifying geographic area meets Maryland’s definition of a disproportionately impacted area during follow-up communication with the MCA. This applies to Maryland residents and out-of-state applicants who must submit two documents to validate their address. These documents must indicate the move-in date as well as the move-out date.
Application Process and Key Dates
Prior to November 3rd, 2023
First, prospective Social Equity Applicants are required to complete the MCA’s Cannabis Business Licensing Interest Form. An individual must answer each question correctly to obtain a personalized link to the Social Equity Verification Portal.
September 8th to November 7th, 2023
Within two business days of Cannabis Business Licensing Interest Form submission, the link to the Social Equity Verification Portal will be sent via email. The portal will only be open for only 60 days.
November 13th to December 12th, 2023
The application round will be open for exactly 30 days. In addition to meeting the criteria for a social equity applicant, an application must include:
- A detailed operational plan
- A business plan; and
- A detailed diversity plan.
During this time, an applicant must submit an application fee of $5,000 for a standard license; or $1,000 for a micro license.
January 1st, 2024 (at the Latest)
Under the Cannabis Reform Act, the Administration will begin conducting the lottery on or before January 1, 2024. Any applicant who meets the minimum requirements for licensure, on a pass-fail basis, will be placed in a randomized lottery based on license type (grower, processor, or dispensary) and county or region for which the application was submitted.
The following licenses will be available in the first application round:
- 16 standard grower licenses;
- 32 standard processor licenses;
- 75 standard dispensary licenses;
- 24 micro grower licenses;
- 24 micro processor licenses; and
- 8 micro dispensary licenses.
For more details on the Maryland Adult Use Licensing process, see our detailed overview here.
Harvest 360 is a trusted partner in the often complicated process of cannabis licensing. We’re dedicated to helping prospective applicants initiate the application process efficiently and effectively, developing an application that not only wins, but is designed to be implemented.
Schedule a free support call with our team, or refer to our Social Equity Verification Guide to begin the process. Our comprehensive support will guide you seamlessly through each step of the Maryland adult use licensing process, help you navigate start-up processes, and plan for growth.