By Megan Sayles
AFRO Business Writer

The Maryland Office of Social Equity (OSE) hosted an informational event on Oct. 16 in Prince George’s County to brief aspiring social equity applicants about the upcoming round of cannabis licensing. 

Since the legalization of adult-use cannabis, Maryland has become the first state in the country to exclusively earmark the first round of new cannabis licenses to social equity applicants. The program was created to ensure those disproportionately impacted by the war on drugs have opportunity in the industry. 

Since the legalization of adult-use cannabis, Maryland has become the first state in the country to exclusively earmark the first round of new cannabis licenses to social equity applicants.

“The licensing round being held this fall is exclusive to social equity applicants. In order to apply, you have to have gone through the verification portal and been verified by the state as an eligible social equity applicant,” said Will Tilburg, acting director of the Maryland Cannabis Administration (MCA). “We’ve got about 450 people who have been verified through the portal at this juncture, and I would recommend for those who haven’t to start the process as soon as possible.” 

Social equity applicants must have lived in a disproportionately impacted area for five of the last 10 years, attended a public school in a disproportionately impacted area for at least five years or attended a Maryland college where at least 40 percent of the students are eligible for a Pell Grant. The OSE has a map defining qualifying zip codes and schools on its website. 

Aspiring growers, processors and retailers have until Nov. 7 to become verified as social equity applicants. They must also be registered with the Maryland State Department of Assessments and Taxation (SDAT) before applying. The application process will open  from Nov. 13 to Dec. 12. 

The OSE is also set to host free writing clinics to help social equity applicants navigate the application process. The clinic schedule is to  be announced on OSE’s website. 

“We want to do a breakdown of the application. We’re going to include application requirements. We’re also going to go over the generational instructions, as well as license types,” said Chanel White, economic opportunity officer for OSE. “Everybody has been asking what is required in the detailed business plan. You’re going to find that out in the writing session along with the operational plan and the diversity plan.” 

The first round of licenses will be awarded by the MCA through a lottery supported by the Maryland Lottery and Gaming Control Agency. Up to 179 licenses will be awarded. 

But, the licenses are conditional. Awardees have six months to raise the capital for starting their cannabis business as indicated on their applications. They also have 18 months to get their business up and running. 

“If selected in the lottery, you’ll undergo vetting. After being vetted, it’s the conditional award and license period,” said Tilburg. “That is 18 months in statute where if a business is not operational and does not reach the finish line, that license – under state law, is rescinded and goes back to the state to award to other businesses.” 

At this point in the process, presenters recommended that social equity applicants hold off on spending money or raising capital until they’ve received their license. They are not required to buy a building to house their business. 

“You don’t need to spend any money yet. Don’t spend any money besides the application fee,” said Hope Wiseman, founder and owner of Mary and Main, a Capitol Heights, Md. cannabis dispensary. “You may want to consult with an attorney and accountant just to start getting your wheels spinning. But, honestly, there’s so much information on the internet nowadays that I think until you know you’re going to win this license, I would just hold off.” 

For operating capital, Wiseman said, institutional funding and business loans will not be available, as cannabis remains a federal Schedule 1 drug. However, the Maryland Department of Commerce offers grants and loans through the Cannabis Business Assistance Fund. 

Its upcoming funding opportunity is the Social Equity Application Assistance Reimbursement Grant, which provides compensation for technical assistance used during the application process. The grant will amount to 50 percent of the eligible expenses up to $5,000, and applications will be accepted from Jan. 15 to Feb. 15. 

“It’s for out-of-pocket costs associated with attorneys, certified public accountants, financial advisors or other providers of technical assistance in completing the cannabis business application for a license,” said Andy Fish, senior director of finance programs for the Maryland Department of Commerce. “If you have consulting or advisory fees associated with writing your business plan or operational plan, those will be eligible costs.”

The OSE will hold two more informational sessions  virtually on Oct. 30 from 1-3 p.m. and on Nov. 6 at Bowie State University from 5-7 p.m. 

Megan Sayles is a Report for America Corps member.