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Just over 1,700 people applied for a cannabis license in Maryland’s first round designed to foster social equity, which lawmakers championed as an argument for legalizing recreational marijuana in the state.

Only 179 of those admitted to a state-run lottery will ultimately receive a coveted license or micro-license in this round. This first major round of licenses since legal recreational sales began in July is tailored to benefit people from communities most affected by the war on drugs, which had a disproportionate impact on Black people.

Maryland’s social equity round did not take race into account; instead it worked to increase diversity without running afoul of legal advice against using race as a criteria for eligibility. The state opened the process up to people who either live or attended public school in Zip codes that exceeded the state’s 10-year average for cannabis possession charges by 150 percent or more, or those who attended a Maryland university where at least 40 percent of students received Pell Grants. Those who did not advance to the lottery were informed Friday.

Maryland officials last week touted the diversity of the applicant pool drawn in by the geographic approach. More than half of the applicants self-identified as Black or African American, according to statistics shared by the Maryland Cannabis Administration. Another 22 percent identified as a race other than White, with roughly 84 percent of the businesses that applied identifying either as woman- or minority-owned, or both. Women accounted for 41 percent of the applicants.

“The diversity of the applicants demonstrates our success in putting social equity at the center of the process,” Maryland House Speaker Adrienne A. Jones (D-Baltimore County) said in a statement on X.

Several steps remain before the licenses are granted, but if the new licenses end up in the hands of a diverse group of growers and dispensary owners, it will be a major success for a state that struggled to meet its social equity goals after launching a medical market.

Missing from Maryland’s legal marijuana growers? Black business leaders.

The General Assembly last year set a goal for the adult-use licensing process to begin on or before Jan. 1. Although the bulk of new licenses have not yet been granted, the Maryland Cannabis Administration did issue one so-called Pigford license to the only eligible applicant who was part of a class-action lawsuit filed against the U.S. Department of Agriculture for systemic discrimination against a dwindling group of Black farmers in the 1980s and ’90s. Another three dispensary licenses were awarded to businesses that secured grower licenses during a diversity round of licensing for Maryland’s medical cannabis industry.

The state agency had originally hoped to begin the social equity lottery in January, as well, but the Maryland Cannabis Administration said vetting the thousands of applications submitted in December took more time than anticipated.

“There were a lot of submissions, which is terrific news,” William Tilburg, acting director of the Maryland Cannabis Administration, said in an interview. But the high level of interest made a comprehensive review of each application a time-consuming prospect, he added.

Maryland’s recreational market has been up and running since July, when medical marijuana companies were allowed to transition their medical licenses into adult-use licenses. By December, those companies had made more than $331.8 million in adult-use sales.

Tilburg said Maryland officials have embraced a cautious approach after other states faced stunning failures in their equity licensing rounds. After Arizona granted 26 equity licenses, corporations and investors quickly bought the vast majority from the original applicants, so that fewer than two years later only eight were held by the people who won them, according to the Arizona Center for Investigative Reporting. Up to one-quarter of the equity licenses granted in Missouri went to ineligible applicants, the Missouri Independent reported.

Of the 1,708 verified applicants, 1,474 met the agency’s eligibility requirements to advance to the lottery stage. The rejected applicants will be able to request a review with the agency to understand why the application was rejected and raise any objections over how the application was evaluated. Those reviews will take place between Feb. 15 and Feb. 29, and any rejected applicants can amend and resubmit their applications in the second round of licensing without charge.

The lottery — which will consist of 44 lottery pools for different categories of licenses and micro-licenses for dispensaries, processors and growers in several regions of the state — will be held in March, Tilburg said.

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