Pubdate: Mon, 12 Mar 2018
Source: Baltimore Sun (MD)
Copyright: 2018 The Baltimore Sun Company
Contact:  http://www.baltimoresun.com/
Details: http://www.mapinc.org/media/37

UNTANGLING THE KNOT OF MD. MEDICAL POT

A bill in the Maryland General Assembly had sought to add more black
firms to the state's regulated medical marijuana industry.

Instead it might end up favoring existing players -- nearly all of
whom are white-owned companies.

A bill in the Maryland General Assembly had sought to add more black
firms to the state's regulated medical marijuana industry.

Instead it might end up favoring existing players -- nearly all of
whom are white-owned companies.

Given how much the Legislative Black Caucus has complained about the
lack of minority-owned firms among Maryland's medical marijuana
growers and processors, it may seem crazy that the legislation
designed to address the issue that just passed overwhelmingly in the
House could lead to more white men getting licenses.

But we're in a messy situation with Maryland's medical cannabis
program, and there is no elegant solution. House Bill 2 clears up a
number of problems with existing law and reflects a good deal of
thought and deliberation about how to balance the legislature's goals
of diversity in the new industry with the needs of patients and the
legitimate interests of existing licensees. It may not be perfect, but
it's better than the status quo and a lot better than the original
version of the legislation that was introduced in January.

A couple of legal and practical realities have made the black caucus'
goal of ensuring African-Americans aren't shut out of the industry
difficult to achieve.

The state cannot legally institute race-or gender-based preferences
absent a study demonstrating that minorities or women have
historically been shut out of a particular industry.

Maryland now finally has such a study in hand, but preferences in the
licensure process aren't guarantees. Moreover, even if one or more
women-or minority-owned firms gets one of the new licenses the
legislature is considering authorizing, there is no certainty
whatsoever that an African-American company will get one.

A bill in the Maryland General Assembly had sought to add more black
firms to the state's regulated medical marijuana industry.

Instead it might end up favoring existing players -- nearly all of
whom are white-owned companies.

A bill in the Maryland General Assembly had sought to add more black
firms to the state's regulated medical marijuana industry.

Instead it might end up favoring existing players -- nearly all of
whom are white-owned companies. (Erin Cox)

The House worked out an end-around that would effectively guarantee
that a particular African-American owned firm, which now has a
processor license, would also get a grower's license. Simultaneously,
it would allow three companies with grower's licenses -- two of them
owned by white men, one by a family of South Asian descent -- to get
processor's licenses.

The remaining four new grower's licenses and seven new processor's
licenses would be up for grabs in a process that gives preferences to
women and minorities.

We don't love the idea of the legislature getting that involved in
deciding which particular firms get licenses. But there is a certain
logic to the way the proposal is structured. It allows any firm with a
processor license that ranked in the top 30 of grower applicants to
get a cultivation license, and any grower that ranked in the top 30
for producer licenses to get one of those.

That accomplishes a few things: It gets new licensees up and running
immediately without the year-plus delay that a new application process
will require. It recognizes the commission's judgment that the top 30
applicants for both types of licenses were highly qualified and that
the differences between them were often minor.

And it fosters more of a particular kind of vertical integration in
the industry, which should lead to lower consumer costs.

There isn't a better reader of the tea lives in Annapolis than Senate
President Thomas V. Mike Miller. He's been saying for a couple of
years now that legalization of recreational marijuana in Maryland --
something that seemed like a far-out idea when former Del. Heather
Mizeur made it a central...

There isn't a better reader of the tea lives in Annapolis than Senate
President Thomas V. Mike Miller. He's been saying for a couple of
years now that legalization of recreational marijuana in Maryland --
something that seemed like a far-out idea when former Del. Heather
Mizeur made it a central...

Several firms already have licenses both to grow and process marijuana
in Maryland. Many states don't separate those functions at all in an
effort to reduce the regulatory burden both for the government and the
industry; some even require a completely vertically integrated
structure from cultivation to retail sales. There's significant debate
in the industry about whether such complete integration is good for
consumers in terms of the quality, variety and cost of cannabis
products, but there is more general consensus that combining growing
and processing in one facility is beneficial, at least in the early
stages of a state's marijuana marketplace.

Other key features of this bill include clarification of what happens
when a company receives provisional approval for a cultivation or
processing license but is unable to commence operations within a
reasonable period of time; a gradual shift in the compensation of the
licensing commission that brings reforms without abruptly stopping the
process of considering new applicants; and sets a reasonable standard
for when and how the state might authorize new grower and processor
licenses. The original version of this bill would have required the
approval of a legislative committee to consider new licenses before
2028, which raised the risk that well-connected licensees could have
protected themselves from competition for a decade, to the detriment
of consumers.

The latest language allows the commission to undertake the process in
2024 and eliminates the Legislative Policy Committee's veto power.

If the state Senate has better ideas, we'd certainly be eager to hear
them. But what we don't want to see is another General Assembly
session end with these issues unresolved. The legislature's failure to
address diversity and other problems in the state's medical cannabis
industry last year was disappointing. Failing again this year would be
disgraceful.
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MAP posted-by: Matt