As Cannabis Legalization Takes Effect in Maryland, Who Will Benefit?

On July 1, adult-use cannabis legalization officially takes effect in Maryland. Adults over 21 can legally purchase and possess cannabis, and grow plants at home. Adult-use dispensaries will be open around the state, and arrests should fall rapidly. Advocates see plenty to celebrate. But there are questions over how Maryland will address past convictions—and whether it’s offering Black, Brown and lower-income residents fair opportunities in the new industry.

Maryland voters approved Question 4 to legalize cannabis in the 2022 midterms. This essentially gave the stamp of approval to a bill lawmakers had previously passed in the legislature, which set basic rules like possession limits for cannabis—at 1.5 ounces legally, and up to 2.5 ounces without criminal penalties—and a home-grow limit of up to two plants. Question 4 also requires a special advisory council to study health impacts of legalization on youth, and a community reinvestment fund that will prioritize money for communities most harmed by marijuana arrests and incarceration.

A problem here is that expungement of marijuana records is not automatic.

People currently in prison for cannabis convictions are eligible to be re-sentenced and released early, and those with past records can have them expunged. Possession records are immediately eligible, but those convicted of “possession with the intent to distribute” must wait until three years after they completed their sentence.

A problem here is that expungement of marijuana records is not automatic. Individuals must request an expungement themselves—and figuring out what to do and which court to file a petition with can often be a difficult process. Many people may not know their rights under the new law to begin with. And working-class and lower-income residents, especially, may avoid the process if they think there are fees or lawyers’ costs involved. (The state requires a $30 filing fee, though may waive it for some individuals.)

Much like literally anywhere else in the country, Black Marylanders have suffered decades of racist drug enforcement, with higher arrest and incarceration rates than their white neighbors. Before legalization, according to the American Civil Liberties Union (ACLU), Black residents were twice as likely as whites to be arrested for marijuana possession, despite both groups having similar use patterns. These inequalities may be even starker depending on where you live—Black residents were four times likelier to be arrested in Baltimore County, for example.

Justice for Marylanders of color was a powerful motivator for advocates like Kevin Ford Jr., who leads the Uplift Action Fund. Filter previously reported on how his organization targeted predominantly Black areas like Baltimore, Prince George’s County and Charles County, to turn out Black voters in support of legalization. The strategy worked: According to public polling ahead of the vote, legalization enjoyed overwhelming support among under-40s and Black and white voters alike. Question 4 won 67 percent support on election day.

Thirty-five percent of the revenue that’s left over must be set aside for “community reinvestment.”

What Question 4 did not do, however, is create rules for licensing and taxing of cannabis businesses. This has only come in the months since, as lawmakers approved legislation around a regulated market. As adult-use dispensary doors open, Marylanders concerned with social justice will be asking who owns these businesses, and whether their profits will benefit all communities.

In May, state lawmakers and Governor Wes Moore (D) agreed on bill to set licensing and tax rules for cannabis businesses, and the new Maryland Cannabis Administration (MCA) issued its first set of regulations. The new law creates a 9 percent state sales tax on cannabis products. The revenue will first pay for the MCA’s operating costs, then 35 percent of what’s left over must be set aside for “community reinvestment.”

Cities and counties will have some discretion over how to use this money, but it must “[fund] community–based initiatives intended to benefit low–income communities” and “disproportionately impacted areas.” Money must not be used for law enforcement, or any other general expenses like fire departments or roads. Baltimore lawmakers have already set up a commission that will use funding to address racial disparities.

Maryland previously legalized medical marijuana in 2014, giving some business owners the opportunity to open medical dispensaries years before full legalization. According to Marijuana Moment, the state has now approved 94 of these medical dispensaries to “convert” their stores so they can immediately also sell adult use products.

“I’m wholeheartedly concerned,” Ford told Filter of Maryland’s medical dispensaries getting a head start.

Any new business owners looking to open a dispensary will have to wait, however. The state will issue more retail licenses in a two-part process, beginning January 1, 2024. The first batch of new licenses must be reserved for “social equity” applicants—defined as having prior residence in a neighborhood with the high marijuana arrest rates, having been to school in these areas or having attended a college with a lower-income student body. Successful applicants under this program will be eligible for a Social Equity Partnership Grant Program and reduced licensing fees. They must own at least 65 percent of their business, and can apply for a standard business license ($5,000 fee) or a micro business ($1,000 fee).

As states across the country have legalized first medical and then adult-use cannabis, it’s a common pattern for governments to give medical marijuana companies a “first mover” advantage over newer and smaller businesses. It’s been one of the biggest and most persistent barriers to creating equal opportunities in the industry.

“I’m wholeheartedly concerned,” Ford told Filter of Maryland’s medical dispensaries getting a head start. “I know there were a lot of scare tactics that were used to try and make that decision, one being that if we don’t allow these businesses to transfer as soon as possible, we’re going to see the ‘illicit market’ take over. I do believe allowing these businesses to go first without waiting for the equity businesses to come online really takes away from the idea of a fair and equitable market.”

Because some of the dual licenses just granted to medical companies count toward the total number the state will have, Ford cautioned there will be fewer social equity licenses than expected in the next round. The state is planning to give out 80 standard retail and 10 micro retail licenses to equity applicants.

“I do believe Maryland has done a good job carrying out the will of the voters,” he said, “number one making sure we have a legal market by July 1, and trying to ensure that equity is the intent of the bill. It’s important that we look at opportunity more than we do fear, and I think some of the decisions here have been made out of fear. I hope that fearfulness won’t stop some of those who should be in this industry having an opportunity to participate.”

 

---

 

Photograph via PublicDomainPictures.net