How to Start a Cannabis Business in Maryland?

Understand regulatory and legal requirements. Do market research.

Research the laws and regulations governing adult-use and medical-use cannabis for more information about the regulatory requirements for obtaining a license for your cannabis business.

Maryland Cannabis Legalization

On November 8, 2022, Maryland voters passed a ballot referendum legalizing cannabis use for individuals 21+ on/after July 1, 2023. HB 556 and SB 516 established a new agency, the Maryland Cannabis Administration (MCA), to regulate cannabis businesses in the State. Emergency regulations were approved by the Joint Committee on Administrative, Executive, and Legislative Review (AELR) on June 23rd and took effect on July 1st, 2023 to expire on June 30th, 2024.

Maryland Cannabis Market

Decide the type of cannabis business. Choose a location. Check local zoning regulations.

Cannabis Licenses Types available in Maryland

Standard Grower

“An entity licensed by the MCA that cultivates or packages cannabis; and is authorized by the MCA to provide cannabis to a processor, dispensary, or independent testing laboratory.” (up to 300,000 square feet of canopy indoors or 1.2 million square feet outdoors, except that some existing medical growers may be larger)

Application fee: $5,000
License fee: $50,000 every 5 years

Micro Grower

“An entity licensed by the MCA that cultivates or packages cannabis; and is authorized by the MCA to provide cannabis to a processor, dispensary, or independent testing laboratory.” (under 10,000 square feet indoors or under 40,000 square feet outdoors)

Application fee: $1,000
License fee: $10,000 every 5 years

Standard Processor

“An entity licensed by the MCA that transforms cannabis into another product or extract; and packages and labels cannabis.”

Application fee: $5,000
License fee: $25,000 every 5 years

Micro Processor

“An entity licensed by the MCA that transforms cannabis into another product or extract; and packages and labels medical cannabis.” (<1,000 pounds/year)

Application fee: $1,000
License fee: $10,000 every 5 years

Dispensary

“An entity licensed by the MCA that acquires, possesses, transfers, transports, sells, distributes, dispenses, or administers cannabis, products containing cannabis, related supplies, related products containing cannabis including edible cannabis products, tinctures, aerosols, oils, or ointments, or educational materials for use by a qualifying patient or caregiver or individuals 21+.”

Application fee: $5,000
License fee: $25,000 every 5 years

Micro Dispensary

“An entity licensed by the MCA that sells cannabis or cannabis products without a physical storefront, provided that the licensee employs not more than 10 employees.”

Application fee: $1,000
License fee: $10,000 every 5 years

On-Site Consumption

“An entity licensed by the MCA that operates a facility on the premises of which individuals can smoke outdoors, vape, or consume cannabis in accordance with regulations.” (Not authorized until second licensing round (after May 2024).)

Application fee: $5,000
License fee: $10,000 every 5 years

Incubator

“An incubator space license authorizes the holder of the license to operate a facility within which a micro licensee may operate in accordance with regulations.”

Application fee: $5,000
License fee: $10,000 every 5 years

Testing Laboratory

“An entity, or a site, licensed by the MCA that offers or performs tests related to the inspection and testing of cannabis and products containing cannabis.”

Laboratory registration fee: $5,000

The following businesses shall register with the Administration in order to provide services to a cannabis licensee: (1) a transporter; (2) a security guard agency; (3) a waste disposal company; and (4) any other type of cannabis business that is authorized by the Administration to provide plant or product–touching services to cannabis licensees.

Cannabis Delivery in Maryland

Medical cannabis can be purchased and delivered. Adult-use cannabis businesses can also apply for a micro-dispensary license, which would enable them to run a delivery service without having a physical storefront. The first of these licenses is set to be awarded by January 1, 2024.

Cannabis Delivery Service by State
Cannabis Non-Storefront Business by State

Develop a solid cannabis business plan. Secure financing.

Application requirements include a detailed business plan demonstrating a likelihood of success and sufficient business ability and experience on the part of the applicant.

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'70% ready to go' business plan templates

We offer a wide range of '70% ready-to-go' cannabis business plan templates that will help you prepare a professional cannabis business plan document supported with expert financials and an investor pitch deck. All our templates are completely open and editable and you can use Word, Excel and PowerPoint to work with them.

Prepare the required documents. Submit applications. Pay fees.

To apply for a Maryland adult-use cannabis growers license, you must submit an application form, pay the mandatory application fee ($5,000 for a standard grower, processor, or dispensary, or incubator space; $1,000 for a micro grower, processor, or dispensary license), and provide supporting documentation that proves you meet all the requirements.

Documentation that the applicant meets the criteria for a social equity applicant, if applicable.
An operational plan for the safe, secure, and effective cultivation, manufacture, or dispensing of cannabis.
A solid cannabis business plan, including financial plan.
A diversity plan, including objectives, timetables, and evaluation metrics that describes the steps an applicant will take to ensure that the applicant’s business will promote the meaningful inclusion of diverse groups.

You will also need to attend an interview with a panel of experts who will assess your suitability for a license. After submitting your application, you will need to wait for the decision of the Maryland Cannabis Administration.

Final approval. Obtain the required licenses.

Applicants selected in the lottery will receive a conditional licensee, which is valid for 18 months beginning from the day of award of the conditional license. During the conditional license period, a business must complete a supplemental application that includes:

Criminal history and financial background investigation on all owners and investors.
Verifying all information provided in the application, including ownership and control.
Identifying a physical location and demonstrating legal control of the premises.
Passing all health, safety, and security inspections.
Registering, if not already, with State Department of Assessment and Taxation.
Obtaining additional funding through grants, loans, or additional investors, if applicable.

Keep track of your ongoing compliance requirements.

Physical security measures, good production practices, packaging, labelling, transport and reporting requirements, taxes and more.

Maryland Cannabis Taxes

Cannabis products are subject to a 9 % sales tax.

Main steps in short

Understand regulatory and legal requirements. Do market research.
Decide the type of cannabis business. Choose a location. Check local zoning regulations.
Develop a solid business plan. Secure financing.
Prepare the required documents. Submit applications. Pay fees.
Final approval. Obtain the required licenses.
Register your business as an employer and a tax payer.
Keep track of your ongoing compliance requirements.