Maryland’s medical marijuana regulators said Tuesday that the General Assembly likely will have to clarify whether state rules governing the cannabis industry were meant to prevent big out-of-state companies from dominating the market by taking over homegrown firms.
The Maryland Medical Cannabis Commission’s policy committee on Tuesday deferred voting on a proposal to amend existing regulations to make clear that companies cannot own more than one license in each of the industry’s three categories: growing cannabis, processing it into products and selling it at dispensaries. Commissioners said they expected the General Assembly to weigh in and decide the matter during the annual 90-day legislative session that begins Wednesday.
Several companies — mostly well-financed, experienced operators from outside of Maryland — have gained control of multiple licenses across categories by entering into “management agreements” with licensed firms for fees or revenue sharing in a state market that generated nearly $100 million in sales in 2018, the industry’s first full year.
Currently regulators must approve any ownership changes that represent control of 5 percent or more of a licensed company. But the state’s regulations do not explicitly address management agreements. The cannabis commission has held that such deals are permissible under the state’s rules so long as ownership of a license does not change hands.
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