Weeding out the Free Market
Maryland legislators are going to screw up the cannabis market by making the same heavy-handed mistakes that have been made elsewhere
Maryland legislators say they want the state’s embryonic legal cannabis market to be a national model, but they appear to be on track to repeat the same mistakes other states have made in creating their legal markets.
Delegate C.T. Wilson and Senator Brian Feldman dropped the bill codifying the rules of Maryland’s legal cannabis market last week. Senate President Bill Ferguson held up New York as the rhetorical foil to the “national model” he says Maryland’s nascent market will be for other states. “We’ve seen what happened in places like New York where there are over 1,400 unlicensed dispensaries,” said Ferguson.
However, New York’s cannabis market rules are very similar to the rules Maryland is proposing. Both states cap the number of dispensary licenses New York (150), Maryland (300). And, both states are applying an “equity lens” to the first round of dispensary license applications, prioritizing “social equity applicants.”
New York’s Seeding Opportunity Initiative regulations prioritized dispensary license applications from “equity-entrepreneurs” with prior cannabis-related criminal offenses, who also have a background in owning and operating a small business.
Similarly, Maryland’s first round of dispensary applications will be limited to “social equity applicants.” Wilson and Feldman’s bill define “social equity applicants" as those who went to school or lived for at least the past five years in a jurisdiction disproportionately impacted by the war on drugs. Translation: this is Maryland’s end run around the 14th amendment.
One of the reasons why New York has seen over 1,400 unlicensed dispensaries is because government is incapable of moving at the speed of the market in efficiently delivering goods customers desire. New York approved legal cannabis in March 2021, yet it was 20 months until the state approved the first dispensary licenses in November 2022, and even then only 36 licenses out of 900 applicants were approved. Thirty more licenses were approved in January of 2023.
Cannabis consumers base their purchasing decisions based on factors of cost, quality and convenience. In response to New York’s glacial pace of licensing, thousands of illegal dispensaries stepped in to meet the consumer demand the government-sanctioned market could not. Maryland legislators, wearing their opaque equity lenses appear to be stumbling into the very same mistake New York made.
Maryland legislative leaders say they will have the state’s market up and running by July 1, 2023–in just five months. When Maryland voters approved sports wagering in November 2020, it took over a year for the first retail sportsbook to open, and two years before mobile sports wagering licenses were approved and operational—due to fretting over equity.
Come July 1, and you’re looking to purchase your weed from a licensed cannabis dispensary near you… don’t bet on it.