Maryland Cannabis Business Licensing Information: Everything you Need to Know

Who’s Running the Show

 

The Natalie Laprade Medical Cannabis Commission Regulations, passed on September 14, 2015, regulate the legal use of medical cannabis in Maryland. The regulations established the Maryland Medical Cannabis Commission (MMCC) to oversee medical cannabis cultivation, processing, and distribution.

 

What Licenses Will Be Available

 

The MMCC is responsible for authorizing three different types of commercial cannabis business licenses: Growers, Processors, and Dispensaries; The MMCC is also responsible for registering Independent Testing Laboratories.

 

What’s the Application Submission Timeline

 

The MMCC will be accepting applications for licensed growers and licensed processors between March 1 and April 30, 2019.

 

Patients

 

Patients in Maryland can be issued medical cannabis certification if they have a chronic or debilitating disease that causes:

 

●       Cachexia

●       Anorexia

●       Wasting Syndrome

●       Severe or Chronic Pain

●       Severe Nausea

●       Seizures

●       Severe or Persistent Muscle Spasms

●       Glaucoma

●       PTSD

●       Another chronic medical condition that is severe and other treatments have been ineffective

 

Patients must have an in-person visit with a registered provider; if the patient meets the provider’s criteria for treatment with medical cannabis, they can issue a certification.

 

How much can a patient access?

 

Once certified, patients are allowed a 30-day rolling supply of medical cannabis, consisting of 120 grams of cannabis or 36 grams of extract.

 

Caregivers

 

In Maryland, a caregiver is an individual who is registered to purchase and transport medical cannabis to a designated patient. A patient can have a maximum of two registered caregivers at a time. Patients must register caregivers through the MMCC’s online registry system. Patients under 18 years of age are required to have at least one caregiver.

 

 

License Details

 

The State of Maryland has three different types of commercial cannabis licenses available:

 

·         Growers

·         Processors

·         Dispensaries

·         In addition, Independent Testing Laboratories must be registered by the MMCC.

 

 

 

Growers

 

Growers are licensed to cultivate, manufacture, package, and distribute medical cannabis to other licensed cannabis entities.

 

NOTE: Unlike many other states with medical cannabis regulations, Maryland does not have a minimum or maximum on the amount of plants that growers must cultivate.

Fifteen Growers have been pre-approved by the Commission, but final licenses are contingent on extensive background investigations and regulatory requirements, and to date, no final approvals have been granted.

 

In 2019, the application process will reopen and the MMCC anticipates that four additional grower licenses will available.

 

Colocation

 

If an organization obtains a “grower” and a “processor” license, both activity types can operate at a single location.

 

Processors

 

Processors are licensed to transform medical cannabis into another product or extract and to package and label medical cannabis. Processors cannot process medical cannabis into an edible product.

 

The MMCC has pre-approved fifteen processor applications, but, as with Grower licenses, none of these applications have received final approval. Stage two of the approval process will involve working through extensive background checks and regulatory requirements before the Commissioners will hold a public vote to approve the licensure.

 

In 2019, the application process will reopen and the MMCC anticipates that ten additional processor licenses will be available.

 

Colocation

 

If an organization obtains a “grower” and a “processor” license, both activity types can operate at a single location. However, an organization with a “processor” and a “dispensary” license must operate in two separate units with separate addresses (but they may share one common roof).

 

Dispensaries

 

A dispensary is an entity that acquires, possesses, repackages, processes, transports, sells, distributes, or dispenses products containing medical cannabis. After receiving over 1,000 applications, the MMCC pre-approved 102 companies for dispensary licenses, and 69 licenses have been issued. The MMCC will not be accepting additional applications for dispensaries at this time.

 

Independent Testing Laboratories

 

Independent Testing Laboratories are facilities that perform tests of medical cannabis and products containing medical cannabis. Licensed growers are required to contract with Independent Testing Laboratories. For every batch of marijuana, the laboratories are responsible for providing a certificate of analysis with supporting data on the chemical profile and presence of contaminants.

 

An Independent Testing Laboratory may register with the Commission after receiving a certificate of accreditation. The Independent Testing Laboratory is required to follow the methodologies, ranges, and parameters which are contained in the scope of the accreditation for testing medical cannabis. An Independent Testing Laboratory must be independent of all persons and entities involved in the medical cannabis industry.

 

Required Documents

 

In addition to the application, several required documents are necessary to receive a Grower, Processor, or Dispensary License from the MMCC.

 

Grower

 

In order to obtain a Grower License, an applicant must submit the following, in addition to the application:

 

●       A list of potential employees/volunteers

●       A list of each investor with more than a 5% stake in the business

●       A detailed business plan with an organizational chart

●       Documentation of adequate capitalization

●       If the applicant is a business entity, the application shall include a copy of the articles of incorporation and authorization to do business in Maryland

●       A record of tax payments in all jurisdictions in which the applicant has operated a business for the past 5 years

●       A description of the premises including a detailed site plan

●       A security plan

●       Details of the applicant’s experience/knowledge in horticulture/agronomic production

●       The varieties of medical cannabis expected to be grown

●       A plan for quality control

●       A plan for inventorying, safekeeping, and tracking

●       A disposal plan for medical cannabis waste

 

Processor

 

In order to obtain a Processor License, an applicant must submit the following, in addition to the application:

 

●       A list of potential employees/volunteers

●       A list of each investor with more than a 5% stake in the business

●       A detailed business plan with an organizational chart

●       Documentation of adequate capitalization

●       If the applicant is a business entity, the application shall include a copy of the articles of incorporation and authorization to do business in Maryland

●       Evidence that no tax obligations exist in any jurisdictions on the part of the applicant or any investor with more than a 5% stake

●       A description of the premises including a detailed site plan

●       A security plan

●       A plan for quality control

●       A plan for inventorying, safekeeping, and tracking

●       A training plan for employees/ volunteers

●       Details of the applicant’s experience/knowledge in running a laboratory, managing a pharmaceutical manufacturing business, or managing a consumer products business

●       A plan for the products to be manufactured and the process that will be used

 

Dispensary

 

In order to obtain a Dispensary License, an applicant must submit the following, in addition to the application:

 

●       A list of potential employees/volunteers

●       A list of each investor with more than a 5% stake in the business

●       A detailed business plan with an organizational chart

●       Documentation of adequate capitalization

●       If the applicant is a business entity, the application shall include a copy of the articles of incorporation and authorization to do business in Maryland

●       Evidence that no tax obligations exist in any jurisdictions on the part of the applicant or any investor with more than a 5% stake

●       A description of the premises including a detailed site plan

●       A security plan

●       A plan for quality control

●       A plan for inventorying, safekeeping, and tracking

●       A plan for the disposal of medical cannabis waste

●       A training plan for employees/ volunteers

●       A plan for counseling qualifying patients and caregivers in the use of medical cannabis

●       A plan of the products proposed to be dispensed with the proposed cannabinoid profiles

 

 

Background Checks and Proof of Residency

 

Approval of a commercial cannabis license is contingent on stringent background checks. Applicants must complete a criminal history check, which consists of two sets of legible fingerprints (in compliance with state standards) and a request that the applicant’s state and national criminal history record information may be forwarded to the commission.

 

In addition to the criminal history check, the Commission may review and verify all of the information that an applicant includes in their application. The regulations state that applicants must waive confidentiality and authorize any government agency to release and provide access to any information that has been submitted to any other jurisdiction during a commercial cannabis application process.

 

Applicants must also waive confidentiality with financial institutions to allow them to provide any financial, personal, and background information to the Commission that is relevant to the applicant’s capacity to manage a licensed commercial cannabis operation.

 

In addition to the background check requirements, applicants must be Maryland residents, Maryland business entities, or registered to conduct business in Maryland. For more information on registering a Maryland business, visit the Maryland Department of Assessments and Taxation here.

Security Requirements

 

In order to operate a commercial cannabis facility, growers, processors, and dispensaries must adhere to state regulations for security, addressing access, lighting, video surveillance, and alarm systems.

Growers

Access

Growers must construct premises to prevent unauthorized entry. When a visitor is authorized to enter a non-public area of the premises, a Registered Grower Agent must log the visitor in and out, retain and log a photocopy of the visitor’s identification, continuously supervise the visitor, and prevent the visitor from touching any plants or medical cannabis. A licensed grower must maintain a log of all visitors for two years.

Lighting

Licensed Growers must install and design lighting to ensure proper surveillance. This regulation does not apply to lighting in areas of the premises that are used to cultivate cannabis.

Video Surveillance

All Licensed Growers are required to maintain a motion-activated video surveillance recording system that operates 24-hours a day, 365 days a year without interruption. Images recorded by the surveillance equipment should be high quality and high resolution, making it possible to easily recognize facial detail, and every recorded frame should be time stamped.

 

Notice of surveillance equipment should be posted throughout the facility to advise visitors that they are being recorded. Surveillance equipment should be installed at the exit of the facility, and each entrance where cannabis is grown, tested, cured, manufactured, or stored.

 

All recordings of images captured by the surveillance equipment should be stored both at the licensed premises and at an off-site location. The storage of all recordings of security videos must be access limited, secured by an independent security alarm system, in a format that can be easily accessed for investigational purposes. All recordings must be retained for a minimum of 30 calendar days and any recordings of security video surveillance shall be made available to the MMCC or law enforcement as requested.

Alarm Systems

All Licensed Processors must install a security alarm system that covers all entry points and windows. The security system must be continuously monitored and capable of detecting smoke/fire and power loss, and it must be equipped with auxiliary power sufficient to maintain operation for at least 48 hours in the event of a power loss. Panic alarm devices should be installed at convenient locations throughout the licensed premises.

 

A second, independent security alarm system should be used to protect a location where records are stored on site, a location where records are stored off-site, and to protect a cabinet or room that holds medical cannabis.

 

Processors

Access

Processors must construct premises to prevent unauthorized entry. When a visitor is authorized to enter a non-public area of the premises, a Registered Processor Agent must log the visitor in and out, retain and log a photocopy of the visitor’s identification, continuously supervise the visitor, and prevent the visitor from touching any plants or medical cannabis. A Licensed Processor must maintain a log of all visitors for two years.

Lighting

Licensed Processors must install and design lighting to ensure proper surveillance.

Video Surveillance

All Licensed Processors are required to maintain a motion-activated video surveillance recording system that operates 24-hours a day, 365 days a year without interruption. Images recorded by the surveillance equipment should be high quality and high resolution, making it possible to easily recognize facial detail, and every recorded frame should be time stamped.

 

Notice of surveillance equipment should be posted throughout the facility to advise visitors that they are being recorded. Surveillance equipment should be installed at the exit of the facility, and each entrance where cannabis is processed, tested, packaged, and stored.

 

All recordings of images captured by the surveillance equipment should be stored both at the licensed premises and at an off-site location. The storage of all recordings of security videos must be access limited, secured by an independent security alarm system, in a format that can be easily accessed for investigational purposes. All recordings must be retained for a minimum of 30 calendar days and any recordings of security video surveillance shall be made available to the MMCC or law enforcement as requested.

Alarm Systems

All Licensed Growers must install a security alarm system that covers all perimeter entry points. The security system must be continuously monitored and capable of detecting smoke/fire and power loss, and it must be equipped with auxiliary power sufficient to maintain operation for at least 48 hours in the event of a power loss. Panic alarm devices should be installed at convenient locations throughout the licensed premises.

 

A second, independent security alarm system should be used to protect a location where records are stored on site, a location where records are stored off-site, and to protect a cabinet or room that holds medical cannabis.

 

Dispensaries

Access

Growers must construct premises to prevent unauthorized entry. Licensed Dispensaries must be constructed with a secure room to store the inventory in. The cannabis regulations include strict guidelines for how the secure room is constructed to restrict unauthorized entry.

 

All premises of Licensed Dispensaries will be divided into a public zone and an operations zone. The public zone will include a waiting room open to the public and a service area restricted to patients and caregivers. The operations zone will be divided into separate areas including medical cannabis storage, medical cannabis preparation and packaging, a “breakroom,” and employee lockers.

 

When a visitor is authorized to enter a non-public area of the premises, a Registered Dispensary Agent must log the visitor in and out, retain and log a photocopy of the visitor’s identification, continuously supervise the visitor, and prevent the visitor from touching any plants or medical cannabis. A licensed grower must maintain a log of all visitors for two years.

Lighting

Licensed Growers must install and design lighting to ensure proper surveillance. This regulation does not apply to lighting in areas of the premises that are used to cultivate cannabis.

Video Surveillance

All Licensed Growers are required to maintain a motion-activated video surveillance recording system that operates 24-hours a day, 365 days a year without interruption. Images recorded by the surveillance equipment should be high quality and high resolution, making it possible to easily recognize facial detail, and every recorded frame should be time stamped.

 

Notice of surveillance equipment should be posted throughout the facility to advise visitors that they are being recorded. Surveillance equipment should be installed and the exit of the facility, and each entrance where cannabis is packaged, tested, processed, stored, or dispensed.

 

All recordings of images captured by the surveillance equipment should be stored both at the licensed premises and at an off-site location. The storage of all recordings of security videos must be access limited, secured by an independent security alarm system, in a format that can be easily accessed for investigational purposes. All recordings must be retained for a minimum of 30 calendar days and any recordings of security video surveillance shall be made available to the MMCC or law enforcement as requested.

Alarm Systems

All Licensed Growers must install a security alarm system that covers all perimeter entry points. The security system must be continuously monitored and capable of detecting smoke/fire and power loss, and it must be equipped with auxiliary power sufficient to maintain operation for at least 48 hours in the event of a power loss. Panic alarm devices should be installed at convenient locations throughout the licensed premises.

 

A second, independent security alarm system should be used to protect a location where records are stored on site, a location where records are stored off-site, and to protect a cabinet or room that holds medical cannabis.

 

Fees

 

The following fees are established by the commission to operate a commercial medical cannabis facility:

 

●       Grower Fees

○        License as Grower Only

■       Application Fee- $6,000 (Stage 1: $2,000; Stage 2: $4,000)

■       Annual License Fee- $125,000

○        License as Grower and Dispensary

■       Application Fee- $11,000 (Stage 1: $3,000; Stage 2, $8,000)

■       Annual License Fee- $165,000

○        Grower Agent Fees

■       Registration Fee- $200

●       Replacement Identification Card Fee- $100

●       Licensed Processor Fees

■       Application Fee- $6,000

■       Annual License Fee- $40,000

○        Processor Agent Fees

■       Registration Fee- $200

■       Replacement Identification Card Fee

●       Licensed Dispensary Fees

■       Application Fee- $5,000 (Stage 1: $1,000; Stage 2: $4,000)

■       Annual License Fee- $40,000

○        Dispensary Agent Fees

■       Registration Fee- $200

●       Replacement Identification Card Fee- $100

●       Independent Testing Laboratory Fees

■       Registration Fee- $200

■       Renewal Fee- $100

○        Independent Testing Laboratory Employee Fees

■       Registration Fee- $200

●       Replacement Identification Card Fee- $100

●       Qualifying Patient and Caregiver Fees

■       Identification Card Base Fee- $50

■       Replacement Identification Card Fee- $100

●       Miscellaneous

○        Transfer of Ownership of Grower, Processor, or Dispensary License- $7,000

○        Change in location of Grower, Processor, or Dispensary Premises- $7,000

○        License reinstatement fee- $2,000

Taxes

Currently, there are not taxes imposed on medical cannabis in Maryland.

Transportation

All medical cannabis products must be transported by a registered transportation agent, with identification approved by the MMCC. The transportation agent shall accompany the shipment of products containing medical cannabis and ensure that the product is secure during transport. A medical cannabis transport vehicle should display current registration from the state and be covered by insurance as required by law. A medical cannabis transport vehicle may not display any sign or illustration related to medical cannabis.

 

All products should be tracked in an electronic manifest which will log the chain of custody throughout the shipment process. The electronic manifest will include details on the Licensee shipping and receiving the product, the weight and description of products, the name of the agent who prepared the shipment, and any handling instructions.

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