Maryland Cannabis Market: Plenty of New Opportunity

The First Cannabis Licenses Have Been Issued – What’s Next?

We have been all abuzz about the latest cannabis news out of Maryland. The first adult-use cannabis licenses were issued to 174 lucky social equity micro and standard grower, processor and dispensary applicants on March 14. Congratulations to those who won! 

Now what happens? Is cannabis all done in Maryland? What should people who have been awarded a license do? Here we’ll look at all this and more on what to expect in the market in the coming weeks and months.

 

Another Maryland Licensing Round is on the Horizon

Rest assured, you will have other opportunities to apply, or even have your own already submitted application be drawn in upcoming licensing rounds. This first drawing was a social equity qualifying round, for those who met the requirements and were verified as being social equity businesses. The next stage of licensing as of this writing is in May. This will be for non-social equity applicants, and we don’t know at this time if there will be simultaneous awarding of additional social equity licenses too. 

The Maryland Cannabis Association (“MCA”) asked social equity applicants if they would like to have their application housed for upwards of a year following submission. To us, this indicates that individuals may have a chance at having their submitted December 2023 applications be drawn at any other point throughout 2024.

 

3 Things Applicants Should be Working on Now

In the meantime, it’s important for prospective license holders (if they are social equity applicants or not) to start thinking ahead and planning strategically. There are three key pieces to this we would recommend now for prospective applicants—property exploration, financial modeling, and business planning.

1) Cannabis Property Exploration

Unlike in other states, the MCA is issuing licenses without a property being necessary. That is good news for applicants as it means they don’t have to worry about potentially securing a property (through a lease or mortgage) that may wind up not being used for a cannabis business if their application isn’t drawn in the lottery. With this in mind, MCA is issuing licenses based in part on jurisdictions and regions in the state.

Factor In Regional Competition

The number of licenses issued, too, is determined based on the region or jurisdiction, with those with a larger population receiving more licenses. So, while a property may not be required, it is worth spending time looking at where you may want to locate your business and take into consideration your potential competition—in business operations and in the lottery itself.

 

2) Cannabis Financial Modeling

When it comes to finding investors and also for your own knowledge and edification as a business owner, financial modeling can go a long way. MCA required social equity applicants to have figures identified for the expenses and sales of the business, and having realistic numbers and figures as opposed to best guesses can help with qualifying for the lottery.

Don’t Forget Long-Term Investor Appeal

Financial modeling also has the advantage of making investors more comfortable with the feasibility of a business operation and helps license seekers better understand the costs and benefits of the operational side of cannabis.

 

3) Cannabis Business Planning

As well, a business plan, which has been required material for social-equity applicants, can help establish the buildout of the business. Elements often included in a business plan include market analysis, team staffing and backgrounds, facility buildout needs, and more.

Plans Are An Integral Part

Paired with a financial model, a business plan can also dive deeper into marketing and sales strategies for profitability and assessing the use of funds. There are ample steps that individuals interested in a Maryland license can be doing now, with plenty of opportunities to be had prior to the next licensing round.

Current Maryland License Winners: Now the Real Work Begins

If you have won a Maryland cannabis license in the latest social equity round, you are one step closer to finally opening up your cannabis business. But, the work isn’t done yet. Yes there were required plans—such as a Business Plan and Operating Plan—for the application, but by all indications, licenses holders will need to begin working on and devising additional plans and standard operating procedures to address multiple necessary business functions such as hygiene, sanitation practices, security, and more. 

Proper Business Logistics Are Crucial

In addition to these plans, individuals and business will need to line up ownership and control of the business, likely an LLC, and recruit any additional investors to financially make the opening of the cannabis operation possible. Real estate, regulatory compliance and local ordinance compliance will also then be necessary before proceeding. As well as building out the team and hiring the right individuals from cultivation directors to dispensing technicians or budtenders.

 

We’re Here to Help Build Your Maryland Cannabis Business

This can all be a bit overwhelming but thankfully you do not have to do this on your own! At Canna Advisors, we are well positioned to help you as a prospective license holder and as a newly licensed operator to set you on the path to successful and profitable operations. We’re also nimble enough to offer smaller hourly consultations or a complete development from start to finish.

Reach out to our team of cannabis experts and licensing consultants to take the next steps toward opening your cannabis business.