Legislation that legalizes cannabis for recreational use and outlines provisions for recreational cannabis sales in Maryland was pre-filed by Delegate Jazz Lewis before the General Assembly convenes on January 13, indicating the growing likelihood that the legislature will vote on recreational cannabis in 2021.
As first reported by Marijuana Moment, Lewis released a draft of the legislation which would legalize possession of up to two ounces (about 57 grams) of cannabis flower or 15 grams of concentrate for adults over the age of 21 and permits individuals to grow up to six cannabis plants at home. Maryland medical cannabis patients are currently allowed to possess slightly less than five ounces of cannabis (120 grams) and up to 36 grams of concentrate.
The legislation would also immediately expunge all convictions for a personal use amount of cannabis, followed by standalone offenses and then cannabis offenses that accompany other charges.
Those incarcerated or under government supervision for simple possession of cannabis would be released. Parole, probation and pretrial release could no longer be revoked for state-legal cannabis activity.
Recreational cannabis sales would be subject to a 20 percent tax in addition to Maryland’s six percent sales tax, allowing local jurisdictions the option to tax cannabis sales by an additional 3 percent. According to the Maryland Medical Cannabis Commission’s annual report, the state’s medical dispensaries were projected to sell $450 million worth of cannabis in 2020, which is not subject to state taxes.
While 25 percent of cannabis tax revenue would go towards the state’s general fund, Lewis’ bill directs the majority of remaining revenue to minority business owners and communities that are economically disadvantaged or were disproportionately affected by the prosecution of cannabis use and sale prior to legalization. In 2019, Maryland’s Marijuana Legalization Workgroup decided against advocating for legalization during the 2020 session in part because the group argued that the racial equity element of legalization had not yet been figured out for the state. Lewis’ bill addresses this directly.
The Outlaw Report assembled a chart illustrating how much of the tax revenue collected from cannabis sales will be sent to the various programs that could be funded by the legalization of recreational cannabis.
The legislation directs 27 percent of tax revenue directed towards the Community Reinvestment and Repair Fund which would serve communities impacted by poverty, mass incarceration or racism through mechanisms including but not limited to housing assistance, reentry services for previously incarcerated individuals, and scholarship assistance for low income students.
Delivery and transportation licenses will be available for social equity applicants only, which include businesses with 51 or more percent of ownership by individuals who are racial minorities, live in economically disadvantaged areas, or have been previously affected by the prosecution of cannabis offenses. This also includes applicants with at least 10 employees where 60 percent reside in disproportionately impacted areas or have been arrested for a cannabis offense, according to the proposed legislation.
Social equity applicants will be prioritized for retail licenses with up to 20 percent of total application scores accounting for the aforementioned diversity factors. The bill also promises a “head start” for social equity applicants, who will be awarded cultivation and manufacturing licenses at least six to nine months prior to other applicants.
However, the first recreational cannabis licenses will be issued to medical cannabis businesses with existing cultivation or dispensary licenses because these applicants will be required to pay up to $1 million in application fees in order to fund the state’s Social Equity Start-Up Fund. Money from the start-up fund will be used for zero-interest loans and grants to social equity applicants who will be awarded licenses prior to all other non-medical licensed applicants.
The details of Del. Lewis’ bill will be subject to change as the legislation moves through the General Assembly, but this bill will likely serve as the building blocks for the legislators cultivating Maryland’s recreational cannabis industry.