Lesson 1, Topic 1
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License Types

Grower License

Let’s dive into the world of Grower Licenses in the cannabis industry, outlining both the Standard and Micro Grower Licenses, their differences, and what they share in common.

What is a Grower License?

A Grower License allows you to cultivate and package cannabis, and it’s your ticket to legally providing cannabis to other licensed entities and registered independent testing labs. This license comes in two main types: Standard and Micro, each catering to different scales of operations.

Differences between Standard and Micro Grower Licenses

Standard Grower License:

  • Canopy Size: A Standard Grower License permits a larger operation, allowing an indoor canopy area between 10,000 and 300,000 square feet.

Micro Grower License:

  • Canopy Size: This license is designed for smaller operations, limiting the indoor canopy to a maximum of 10,000 square feet.
  • Conversion Option: Unique to the Micro Grower License, you have the ability to upgrade to a Standard License should your business grow and the need arises, as outlined in specific regulations.

Similarities between Standard and Micro Grower Licenses

  • Regulatory Reporting: Each year by October 1st, you must report your used canopy space to the Administration, ensuring you stay within your allocated limit.
  • Penalties: Misrepresenting your canopy size can lead to reductions in allowed canopy, fines, or even the seizure or destruction of plants grown beyond your limits.
  • Operational Guidelines: Both licenses require adherence to the same regulatory framework, ensuring that operations are conducted in a controlled and legal manner.
  • Annual Canopy Reporting: Regardless of the type, all growers must report their canopy usage annually, helping the Administration monitor and regulate the industry effectively.
  • Canopy Management: The calculation of canopy, whether leased, rented, or directly owned, follows the same guidelines under both licenses. For instance, canopy managed by another grower counts only for the grower in control of the square footage.
  • Single License Limit: Holders of either license are restricted to managing and operating only one grower license, maintaining competitive fairness and preventing market dominance.

Processor License

Welcome to our breakdown of Processor Licenses! Whether you’re considering a Standard or Micro Processor License, it’s crucial to understand what these licenses permit, their differences, and their similarities.

What is a Processor License?

A Processor License allows you to legally transform raw cannabis into various products or extracts. This includes the responsibility to package and label these products accurately and distribute them to licensed dispensaries and independent testing labs.

Differences Between Standard and Micro Processor Licenses:

  1. Production Capacity:
  • Standard Processor License: This license is suitable for larger operations, allowing you to process more than 2,000 pounds of cannabis per year.
  • Micro Processor License: Aimed at smaller scale processors, this license limits your production to no more than 2,000 pounds of cannabis annually.
  1. License Conversion:
  • Micro to Standard: If your operations grow, you can convert a Micro Processor License into a Standard Processor License following specific regulations, which we will cover in a later section.

Similarities Between Standard and Micro Processor Licenses:

  • Regulatory Compliance: Both licenses require adherence to state regulations.
  • Ownership and Management: For both license types, you can hold and manage one processor license. This control is crucial for maintaining standardized operations and compliance across your business.

Dispensary License

Let’s explore the intricacies of dispensary licenses, highlighting the differences and similarities between Standard and Micro Dispensary Licenses. Understanding these will help you determine which license suits your business needs.

What is a Dispensary License?

A Dispensary License allows businesses to sell cannabis legally. There are two main types of licenses: Standard and Micro, each catering to different business models and scales.

Standard Dispensary License Explained:

A Standard Dispensary License is ideal for larger operations. It authorizes the licensee to:

  • Operate a store at a physical location.
  • Acquire, possess, sell, or dispense cannabis products directly from a storefront to consumers and qualifying patients.

However, a Standard Dispensary cannot directly offer delivery services unless they partner with a micro dispensary.

Micro Dispensary License Explained:

On the other hand, a Micro Dispensary License is tailored for smaller, delivery-oriented operations. With this license, a licensee can:

  • Operate a delivery service without a physical storefront.
  • Employ no more than ten individuals.

This type of license restricts operations to specific regions and requires compliance with stringent regulations for delivery and storage outside the authorized areas.

Differences Between Standard and Micro Licenses:

The key differences lie in the operational scale and the nature of services:

  • Physical Storefront: Standard dispensaries can operate one, while micro dispensaries cannot.
  • Delivery Services: Micro dispensaries are primarily for deliveries, whereas standard dispensaries require a partnership with a micro dispensary to offer delivery services.

Similarities Between the Two Licenses:

Despite their differences, both licenses share some common ground:

  • Regulatory Compliance: Both must adhere to state regulations, ensuring they operate legally. We’ll review these state regulations in more detail in a later lesson of this course.
  • Ownership Limits: Individuals can control or have an ownership interest in no more than four dispensary licenses, whether they are standard or micro.

Future Possibilities:

Micro dispensaries have the unique option to convert to a standard license as they expand or as market conditions evolve, providing flexibility in business planning.

Incubator Space License

Let’s talk about what an Incubator Space License is and how it works in Maryland, focusing on the rules laid out in the Maryland’s cannabis regulations.

First off, an Incubator Space License allows the licensee to run a facility where micro licensees—these are smaller, often start-up cannabis businesses—can operate legally. It’s kind of like a shared workspace but specifically for the cannabis industry.

Here’s what you can’t do if you have an Incubator Space License: hold any ownership or control in any other type of cannabis license. This ensures that the incubator spaces remain impartial and accessible to micro licensees without conflicts of interest.

Before these licenses are handed out, the Maryland Economic Development Corporation will pick out regional sites for these incubators. This is part of their strategy to promote economic development across different regions.

Now, what can you do with an incubator space? Quite a bit:

  1. You can provide secure storage for cannabis or cannabis products, especially for licensed micro dispensaries.
  2. You can offer commercial kitchen space where licensed micro processors can create their cannabis products.
  3. You can also have space where licensed micro growers can cultivate cannabis.

As for regulations, you’ve got to stick to several important ones:

  • Keep the premises secure.
  • Maintain sanitation standards for any cannabis products made there.
  • Ensure the safety of any cannabis grown, including proper pesticide use.
  • Store cannabis and cannabis products correctly.
  • Implement a seed-to-sale tracking system.

As the owner or operator of an incubator space, you’ll need to make sure all cannabis, products, and other materials are secure and that there’s no theft or illegal diversion happening on your premises.

In terms of finances, you’re allowed to charge fair market rent for using or storing at the facility, but here’s the catch: you can’t take any equity stake, ownership share, or control of a micro licensee as part of the rental agreement.

Finally, while you can manage up to two licenses for incubator spaces, you need to ensure you don’t exceed this limit to maintain regulatory compliance and fairness in the market.

On-Site Consumption License

Let’s dive into what this license is all about and how it functions under Maryland’s regulations.

First off, what is an On-Site Consumption License? This license allows a business to let customers consume cannabis right on the premises, much like how you can enjoy a drink at a bar. But, there are specific rules that outline how these establishments can operate.

Now, it’s important to note that not every area in Maryland automatically allows these businesses. The local county or city must specifically approve these establishments by issuing a permit or license that says, “Yes, you can operate here.”

However, holding this license comes with certain “don’ts”:

  1. You can’t grow your own cannabis.
  2. You can’t process cannabis or make cannabis-infused products.
  3. And, you definitely can’t add cannabis to any food items prepared or served at your place.

If you’re thinking about getting into this type of business, keep in mind that you can’t have a stake in any other type of cannabis license if you own or control an on-site consumption spot.

Thinking about moving your establishment? That’s possible too. You’d need to apply for a change of location with the necessary documentation showing you have approval from the new area and that the new spot meets all legal and zoning requirements.

Here’s something critical: the state won’t start giving out these licenses until after May 1, 2024. And if you already have a different type of cannabis license, you can’t just decide to allow consumption at your current premises—this is strictly for those with an On-Site Consumption License.

Before you open your doors to cannabis enthusiasts, you’ll need to secure your on-site consumption license. Once you’ve got that, you can source your cannabis and related products from licensed growers, processors, and standard dispensaries.

Lastly, a little note on ownership: you can control up to two on-site consumption licenses, but no more—just something to keep in mind as you plan your business strategy.