Maryland cannabis company Holistic Industries Inc. was fined $55,000 for failing to get approval before transferring ownership interests in its subsidiaries. The Maryland Cannabis Administration (MCA) announced the consent order in February.
They are a multistate operator. According to the companies own website, they have 15 legal stores in five different states including three in Maryland.
Holistic Industries, the parent company of several licensed cannabis businesses in Maryland, reportedly transferred ownership interests between July 2020 and July 2023 without notifying the MMCC (Maryland Medical Cannabis Commission) beforehand. These subsidiaries held licenses for processing, growing and dispensing medical cannabis.
According to Maryland regulations, since May 2020, all privately held cannabis businesses must seek and receive MMCC approval before transferring any ownership stake, regardless of size. However, Holistic Industries claims they acted on legal advice that such regulations didn’t apply in their case.
The consent order details the violations of specific Maryland regulations (COMAR) regarding ownership transfer procedures. The company must now:
- Pay the $55,000 fine.
- Ensure all future ownership transfers are approved beforehand.
- Submit a Standard Operating Procedure (SOP) outlining ownership transfer procedures within 15 days.
- Request retroactive approval for the past transfers within 45 days, or seek an extension if necessary.
Failure to comply with the order could lead to further actions, including suspension of the company’s cannabis licenses.