Maryland Lawmakers Pass Bill Clarifying Marijuana Consumption Lounge Rules And Letting Owners Sell Cannabis Companies To Employees
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Maryland lawmakers have sent a bill to the governor meant to clear up policies around on-site marijuana consumption businesses and lay out the plan for a second cannabis licensing lottery round—while also revising rules to allow license holders sell their cannabis companies to employees ahead of a current five-year waiting period.
While the legalization law that Gov. Wes Moore (D) signed in 2023 already contemplated social consumption sites where people could use marijuana, regulators had asked lawmakers to pass a measure with a series of amendments to clarify the rules.
The legislation—which was filed by the chairs of the Senate Finance Committee and House Economic Matters Committee in January on behalf of the Maryland Cannabis Administration (MCA)—includes definitions and various mentions for what constitutes a “cannabinoid beverage” that could be offered at consumption lounges. Such drinks could not contain more than 5mg of THC in a single serving.
The measure also stipulates that on-site cannabis consumption lounges can operate as food service facilities, meaning they’d be able to offer non-infused food products in addition to the approved single-serve marijuana items.
Lawmakers amended the legislation to stipulate that, before operating as a food service facility, on-site consumption lounges would need to obtain building code permits, mechanical code permits, use and occupancy certificates and “any other applicable permits or licenses” that traditional vendors much acquire.
As originally introduced, smoking and vaping cannabis products would have been entirely prohibited at on-site consumption sites. But it was amended to make it so localities would have the authority to ban indoor smoking or vaping, but they apparently could permit smoking or vaping cannabis outdoors at the facilities.
Also, as the bill moved through the process, key provisions were removed that would have added a new permit category for temporary cannabis events. Registrants would have needed to partner with a separately licensed marijuana vendor, approved by MCA, in order to sell the products.
The legislation would also make it so that, before the state holds a second business licensing lottery round, a disparity study would need to be completed to determine whether or not there’s a “strong basis in evidence of business discrimination against firms owned by minorities and women in the Maryland cannabis market.”
If agencies find that such a disparity exists, the lottery would need to be facilitated with “remedial measures” in place to address the issue. If the study doesn’t demonstrate that there’s a disparity, all applicants would qualify for the lottery.
In both cases, the second lottery round would authorize the approval of up to 25 grower, 25 processor and 120 dispensary standard licenses. MCA could also issue up to additional 70 grower and 70 processor microbusiness licenses. And regulators could also approve 10 incubator space and 15 on-site consumption lounge licenses.
While the legislation maintains a current policy stipulating that marijuana business licenses generally cannot be sold for at least five years after they were issued, there would be a carve-out permitting the license transfer to employees through an employee stock ownership plan.
The measure would further allow medical cannabis dispensaries to continue delivering marijuana products to patients until July 1, 2026. Current law sunsets the delivery option in July of this year.
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Meanwhile, Maryland lawmakers recently gave final approval to a bill that would require state officials to automatically shield records for low-level marijuana convictions that have been pardoned from public access, and to more broadly expand expungement eligibility for certain other offenses.
Last year, the governor granted a mass pardon of more than 175,000 convictions around cannabis and paraphernalia offenses, the records of which would be blocked from public access under the bill that’s been sent to his desk. Pardons represent formal forgiveness from the executive, but such relief doesn’t remove the records.
In February, Moore discussed the bill the legislature has now passed, stressing that it would expand opportunities for people to have their criminal records for marijuana expunged by allowing people who violated terms of their parole or probation to petition courts to erase those records.
Separately, a Maryland House bill that would allow adults to manufacture marijuana edibles and concentrates for personal use has also been sent the governor.
Under the proposal, possession, cultivation and distribution of high-volume cannabis in excess of 50 pounds would no longer be considered a felony punishable by a mandatory minimum sentence of five years in prison. Instead, it would be a misdemeanor carrying a maximum 10 year sentence and/or a $50,000 fine.
The advancement of the legislation came about one week after the Maryland Senate passed a measure to protect for fire and rescue workers from being penalized for off-duty use of medical marijuana.
Employers could not “discipline, discharge, or otherwise discriminate against the fire and rescue public safety employee with respect to the employee’s compensation, terms, conditions, or privileges of employment” based solely on a positive screening for THC metabolites.
In January, officials in Maryland’s most populous county separately said they were moving to loosen marijuana policies for would-be police officers in an effort to boost recruitment amid a staffing shortage.
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