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What’s Going On With Equity Licensing in Maryland

In Maryland’s inaugural round aimed at promoting social equity in the cannabis industry, a staggering 1,700 individuals sought licenses, a testament to the growing interest and potential of the market. However, only a fraction – 179 applicants – will ultimately secure the prized licenses or micro-licenses through a state-conducted lottery. This initiative comes on the heels of the state’s move to legalize recreational marijuana, driven in part by lawmakers advocating for social justice, particularly for communities disproportionately impacted by the war on drugs, notably Black communities.

Unlike some other initiatives, Maryland’s approach to social equity did not explicitly consider race in the application process. Instead, it adopted a geographic strategy aimed at fostering diversity while steering clear of legal concerns regarding race-based criteria. Eligibility was extended to individuals residing or attending public schools in specific zip codes where cannabis possession charges exceeded the state’s average by 150% or more over the past decade. Alternatively, candidates who attended Maryland universities where at least 40% of students received Pell Grants were also eligible. Applicants who did not progress to the lottery phase were notified recently.

Maryland officials celebrated the diversity of the applicant pool, with over half identifying as Black or African American. Additionally, 22% identified with a race other than White, showcasing a broad spectrum of applicants. Furthermore, around 84% of applying businesses identified as woman- or minority-owned, or both, with women constituting 41% of applicants. Speaker of the Maryland House, Adrienne A. Jones, hailed this diversity as a testament to the state’s commitment to social equity.

While the issuance of licenses is pending, the state has achieved a significant milestone in its pursuit of social equity in the cannabis industry. Although the bulk of licenses are yet to be granted, Maryland has already issued one “Pigford license” to an eligible applicant, a provision stemming from a class-action lawsuit against the U.S. Department of Agriculture for discriminating against Black farmers. Additionally, three dispensary licenses were awarded to businesses that previously secured grower licenses in a diversity-focused round for the state’s medical cannabis sector.

The process faced delays, with the social equity lottery originally slated for January but postponed due to the extensive review of applications received in December. The overwhelming response necessitated a meticulous evaluation process, prolonging the vetting period, according to William Tilburg, acting director of the Maryland Cannabis Administration.

Maryland’s recreational cannabis market has been operational since July, witnessing significant sales figures from existing medical marijuana companies transitioning into the adult-use market. However, the state has adopted a cautious stance, learning from the pitfalls experienced by other states in their equity licensing endeavors. Instances where equity licenses were swiftly acquired by corporations and investors in other states serve as cautionary tales.

Of the 1,708 applicants, 1,474 met eligibility requirements to advance to the lottery stage. Rejected applicants have the opportunity to seek a review with the agency to understand the reasons for rejection and address any concerns. Reviews will take place between February 15 and February 29, allowing rejected applicants to amend and resubmit their applications in the subsequent licensing round without incurring additional charges.

The lottery, comprising 44 pools for various license categories across different regions, is scheduled for March, marking another significant step in Maryland’s journey towards a more inclusive and equitable cannabis industry.

“8 of 10 Weed Firms Seeking Equity Licenses in Md. Are Minority- or Woman-owned.” Www.Washingtonpost.Com, 26 Feb. 2024, Accessed 26 Feb. 2024.