Application Guide to Maryland’s Cannabis License Lottery

Enter the Cannabis Lottery Process

The East Coast and Midwest cannabis markets continue to heat up and we’re excited to help you get involved as both Maryland and Missouri hold lottery-based cannabis business licensing processes this year. Applications for Missouri’s new Microbusiness Cannabis License lottery must be submitted before the August 10, 2023 deadline and hinge mainly on social equity eligibility requirements. Maryland will release applications for their cannabis business license lottery in September of 2023 and hopeful applicants should be preparing now for a successful application based on the existing law and the Maryland Cannabis Administration (“Administration”) Emergency Regulations.

Obtaining a coveted cannabis business license is a challenging undertaking, and there are myriad avenues leading to licensure. The main processes for licensing are rolling, merit-based scoring, and lottery. Most jurisdictions use one or a combination of these methods, and no two licensing processes are the same nationwide. A lottery could require as many business minutiae as a merit-based application and merit-based applications might result in a lottery in the event of a tie. 

 

Core Variables to Keep in Mind When Entering a Cannabis License Lottery

While similar to traditional license application structures, lotteries do come with their own key evaluation variables to watch out for and stay competitive: 

1. Number of licenses available: It’s important to be aware of in any jurisdiction. Lotteries could have a few or a few hundred licenses to be awarded.
2. Number of applications allowed per applicant: If multiple applications are allowed, well-funded applicants can gain an advantage by applying multiple times.
3. Property Requirement: If the application requires a property to be secured, this can limit the number applications per applicant (even for well-funded groups) and can be a barrier to entry.
4. Application Fee: A low application fee will ensure hundreds of applicants in a lottery and social equity applicants often receive a discount.
5. Application Qualifications: Applicants must meet certain eligibility criteria and fulfill the requirements outlined by the jurisdiction. A lottery may require business basics or the full suite of corporate details.

 

Timeline for Cannabis Licensure in Maryland

Maryland voters legalized adult-use cannabis via a November 2022 ballot referendum, which was spurred and followed by legislative action. Under the new law, medical cannabis shops were able to convert to start adult-use sales as of July 1, 2023. The 30-day application window for new licenses will open at 12:00AM EST, November 13, 2023 and will close at 5:00PM on December 12, 2023. The Administration published Emergency Regulations, which also took effect on July 1st, and in many areas reference the existing medical cannabis regulations. Maryland applications will be accepted and reviewed by the Administration for pass or fail status before entering a lottery, and the licenses are set to be awarded on or before January 1, 2024.

Available Cannabis License Types and Maryland’s Application Components

Standard & Micro Cannabis licenses available in the first round:

• Standard Retail (Dispensary) Licenses: 75 
• Standard Cultivation (Grower) Licenses: 16 
• Standard Processor (Manufacturer) Licenses: 32 
• Micro Dispensary Licenses: 8
• Micro Grower Licenses: 24
• Micro Processors: 24 

Applications Allowed Per Applicant

An applicant may only be listed on one application per license type per application round and two applications for any license type per application round.

Property Requirement

The Administration may not require an applicant to possess or own any property or facility to operate a cannabis business at the time of the application.

Application Fee

$5,000 for standard adult use licenses; $1,000 for micro licenses 

Application Qualifications: Operating, Business, Diversity Plans, & Social Equity Status

In order to qualify for the lottery, applicants must submit:

1. Detailed Operational Plan

A detailed operational plan, which may require written descriptions of compliant processes for the applicant business according to the regulations, such as:

• • Security and Diversion 
  • Quality Controls 
  • Independent Testing
  • Product Plan 
  • Complaints, Adverse Events, Recall 
  • Records and Inventory 
  • Advertising and Marketing
  • Registered Agents and Training 
  • Packaging and Labeling 

2. Comprehensive Business Plan

A business plan demonstrating a likelihood of success and sufficient business ability and experience on the part of the applicant and providing for appropriate employee working conditions. This will likely require general business plan provisions and may require evidence of financial planning, sources of funding, and team experience.

3. Detailed Diversity Plan & Social Equity Status

A detailed diversity plan and (for first-round applicants) Social Equity status is also required. The Social Equity Verification Portal opened on September 8, 2023, which allows applicants to confirm eligibility prior to the opening of the licensing round. The Portal will close on November 7, 2023. To receive a link to the Portal, you must fill out a Cannabis Business Licensing Interest Form. If you’d like to learn more about the application and qualification process, watch our Industry Insights Webinar: Your Guide to Maryland’s Lottery with Bob Wagener.

Maryland’s Booming Cannabis Market Opened July 1 – Get in Now

Since opening its adult use sales July 1, Maryland’s cannabis market has seen $21 million in sales in the first week. Maryland’s cannabis license lottery offers an opportunity for entrepreneurs to potentially enter the lucrative east coast market and enjoy relatively low barriers to entering the lottery, such as the relatively low application fee and no property requirement. However, the written plans required are extensive and though they are graded pass/fail, applicants don’t want to take the chance of failing and missing out on the lottery altogether. Waiting for the next round is a gamble due to common delays in application processes as well as later round licensees foregoing initial profits and the ability to make a first-to-market impression on the Maryland industry.

 

Get Started on Your Maryland Cannabis Application with Canna Advisors

Utilizing a professional consultant can increase your chances of passing the initial round and entering the lottery with confidence. Additionally, we can help you strategize and anticipate your business needs through financial modeling and business planning to ensure you’re prepared for anything.

Contact Canna Advisors today to get started on your application.