With the end of the legislative session rounding the corner, Maryland lawmakers are in the final stretch in standing up a recreational cannabis market.

Voters overwhelmingly approved the legalization of recreational marijuana in a ballot referendum in November’s election. The referendum kicked House Bill 837 into effect, which gradually eased the state’s marijuana possession rules — but did not create a regulatory framework for selling or buying cannabis. That task was put on lawmaker’s plates for the 2023 legislative session, which is reaching its final days.

On Jan. 1, possession of up to 1.5 ounces for adults 21 and older was decriminalized, becoming a civil offense punishable by fine. On July 1 of this year, recreational marijuana will be fully legalized. With the legislative session ending on April 10, this means lawmakers are operating on a tight deadline if they hope to have a functioning market established by the summer.

Earlier this week, the state Senate’s finance committee approved their version of the framework legislation — Senate Bill 516  — with several amendments. The committee voted to create an independent Maryland Cannabis Administration to regulate the industry. This entity would operate separately from the Alcohol and Tobacco Commission. (The original Senate bill–as well as the House of Delegates bill which passed earlier this month– proposed including the Cannabis Commission as a division within the already existing Alcohol and Tobacco Commission.) Lawmakers also made a taxation change; instead of a graduated sales tax, starting at 6% and eventually landing at 10% by 2028, the state would implement a flat 9% sales tax once cannabis is legalized on July 1. Other amendments, however, like certain definition changes and other technical revisions, brought the bill further in alignment with the House legislation.

Now, the Senate’s version of the bill will move to the Budget and Taxation Committee, before reaching the full Senate for a vote. Meanwhile, the House of Delegates passed its own legislation, House Bill 556, earlier this month, which now awaits a full vote by the Senate.

Shortly before the House passed its legislation, Senate president Bill Ferguson said that any differences between the two companion bills will be resolved, potentially in conference committee, before the end of the session.

“I feel very confident that we’re going to get it done this year,” Ferguson said in a March 10 press conference.

Unlike the Senate’s newly amended bill, HB 556 would implement a 6% tax for the first fiscal year (starting July 1), and that would increase by 1% each year until capping off at 10% in 2028. Different from the amended Senate bill, it would create a cannabis division within the Maryland Alcohol, Tobacco, and Cannabis Commission, as opposed to creating an entirely new and independent body.

Both the House and Senate versions attempt to address the inequities that plagued the rollout of the state’s medical marijuana industry years ago. Maryland legalized medical marijuana in 2014, but it took years before the industry was up and running. When it finally got off the ground, not a single Black-owned business was included in the first round of licenses, despite Black residents making up nearly one-third of the state’s population and enduring the most signficant and long-standing impacts of the war on drugs.

Under the new framework, 30% of the revenue made from the marijuana tax would be put into a community reinvestment fund. The approach would also establish a program granting social equity applicants access to low-interest loans. Social equity applicants are businesses with at least 65% ownership by individuals who lived in or attended school in a “disproportionately impacted area,” or an area with high rates of cannabis possession charges.

If the lawmakers successfully enact legislation by July 1, Maryland would become the first state in the region to avoid the recreational weed purgatory. In D.C., while possession of marijuana was legalized in 2014, the District can’t tax or make money of its sale, thanks to a long-standing congressional rider. Giving away small amount of marijuana remains legal in the city, which is why D.C. has what some call a grey market. “Gifting” vendors will sell something like a digital print or a sticker, and along with that sale provide a “free” gift of marijuana. (A creative bill passed by the D.C. Council last year attempts to add more legitimacy to the gifting vendors, in the absence of a regulated recreational market.)

In Virginia, marijuana possession became legal in 2021, but the commonwealth still lacks a recreational market after lawmakers failed to pass legislation in the last session.

Meanwhile at the federal level, marijuana remains a Schedule 1 controlled substance, meaning a drug with no current medical use and high potential for abuse, so federal law prohibits its sale and distribution, and doctors can’t prescribe it. (For context, heroin is also a Schedule 1 drug.) President Joe Biden, who pardoned federal marijuana possession charges last year, has mentioned a potential review of marijuana scheduling, although the ultimate decision would need to come from the Drug Enforcement Administration.

Previously:
When Will Marylanders Actually See A Market For Legal Weed? It’s Complicated