Almost three years after launching, Maryland’s medical marijuana industry is growing and maturing.
However, its growth, at least on the supply-side, is strictly limited by the state. The General Assembly capped the number of growers, processors, and dispensaries when it allowed sales to begin December 1st, 2017. Licenses are available for 22 growers, 28 processors, and 102 dispensaries. As of June 2019, the Old Line State has 18 growers, 18 processors, and 77 dispensaries.
The ways in which patients can take in cannabis increased this year, after Governor Larry Hogan signed “edibles” into law in the spring. Cannabis in food-form was originally banned. That is not to say that marijuana-infused brownies or gummy bears are on the shelves of local dispensaries now. The Maryland Medical Cannabis Commission is in the process of writing the complex regulations for medical cannabis’ manufacturing and sale. It is not expected to finish until year’s end. It cost the state $297,000 to start the edibles program and required the commission to initially hire three more staffers.
Currently, Maryland’s 67,000 certified medical cardholders can get their marijuana in a wide variety of forms—tinctures, salves, tablets, patches, cartridges, flowers, topically—in addition to traditional smoking or the recent trend of vaping. That’s only a little more than 1 percent of Maryland’s population. States with more mature programs see a 2–4 percent cardholding population; therefore, the commission expects the state’s number to more than double soon.
Cardholders are protected from criminal sanctions—although marijuana is still illegal at the federal level and U.S. authorities can prosecute anyone for marijuana use and possession. To stay within state law, cardholders must buy from a licensed Maryland dispensary and may possess a maximum of 120 grams of marijuana flower—four ounces—or 36 ounces of THC product. They can’t share their cannabis or cross state lines with it.
The Maryland General Assembly decriminalized the possession of small amounts of cannabis back in 2012. It is only punishable by fine now for Marylanders caught with cannabis who don’t have a valid medical card.
Beyond the headline-changing law allowing edibles, this year the General Assembly increased legal protections for academic institutions and medical facilities to research the therapeutic uses and health effects of cannabis. And, Congress fully legalized hemp. It enacted restrictions on advertising. For example, products cannot target minors. Ads cannot show anyone using cannabis or make unsubstantiated therapeutic claims either. It established rules for how many and what kind of industry licensees one person can hold. And, the law bars licensees from selling their rights until they’ve been in business at least three years.
The state also responded to complaints about lack of minority representation in the cannabis businesses by offering 14 new licenses for minority owners—four for growing and 10 for processing—after a disparity study showed that minorities and women were shut out of the budding industry. No African American-owned company won an initial license in 2017 out of the 160 applications for the new licenses.
Today, there is 57 percent participation of minorities and females in the state’s cannabis industry. Among employees, there is 75 percent participation. Those numbers drop to 35 and 58 percent minority representation, respectively, when women are removed from the equation.
The industry exceeded revenue projections by $19 million in its first 12 months of operation. Dispensary revenue, alone, was more than $100 million. Maryland is projected to rank 16th out of the 30 states (and the District of Columbia) with medical programs by 2020, according to the U.S. Cannabis Report produced by New Frontier Data, an independent industry data firm.
According to the Maryland Medical Cannabis Commission, patients paid an average price of $10.11 per gram for flower products, which is less than the national average of $11.40, and $39.39 for concentrate cannabis.
The National Organization for the Reform of Marijuana Laws (NORML), the long-established pro-legalization advocacy group, ranks Maryland at 19 in crop production. Anne Arundel County has three dispensaries (Gold Leaf, Green Point Wellness, and Manna Supply Co.), one grower (Forward Gro), and no processors.
How the industry is helping the state’s bottom line is hard to say because it’s only medical at this point, meaning it’s not subject to an excise tax, or even sales tax.
Therefore, there is no tax revenue derived from the medical cannabis program, according to the state commission.
The number of new states legalizing marijuana in some form hit a speed bump this year, and only Illinois joined the other nine states that allow recreational use. But a record number of states considered legislation to expand legalization or relax criminalization. However, already half the country allows at least medical marijuana. The anti-legalization movement made some headway this year, after a decade of setbacks. Its message that legalization actually hurts minorities, among other societal ills, resonated in some states.
But the industry and most outside observers believe such arguments will merely slow things down and make states take more thoughtful, careful approaches and corrections for negative, unintended consequences—such as what Maryland did with diversity concerns and is doing in writing edible regulations.
Legalization’s expansion is not stopping. A majority of Americans, and states, support it. Canada recently legalized recreational use nationally. The federal government has been slow to respond but will likely catch up in the next few years. There are numerous bills pending in Congress to chip away at marijuana’s illegal status at the federal level. In 2017, a bipartisan group of House members launched the Congressional Cannabis Caucus. Not so long ago, there wasn’t a single member of Congress willing to go on record as supporting decriminalizing marijuana.
