Updated November 23, 2022
Maryland has become the 20th state in the nation to approve recreational marijuana on Tuesday, November 8, 2022. According to MJBizDaily estimates, the recreational cannabis market in Maryland will be a robust one, generating $550 million to $600 million in its first year, and potentially up to $1 billion in its fourth year. For anyone interested in gaining entry into the Industry, this is a State to watch.
Maryland ballot Question 4, passed legalizing marijuana for adults 21 years of age or older beginning in July 2023. Question 4 amends the Maryland Constitution to add Article XX, which:
- Allows individuals 21 years of age or older to use and possess marijuana.
- Authorizes the Maryland General Assembly to “provide for the use, distribution, possession, regulation, and taxation of cannabis within the state.”
- Establishes a process for expunging all cases in which possession of less than 10 grams of cannabis is the only charge, along with additional expungement provisions.
- Increases the amount of cannabis a person may possess that is subject to a civil fine rather than criminal penalty from 10 grams to 2.5 ounces (effective January 1, 2023.)
- Requires data collection and studies on cannabis use, impaired driving, and other health and safety issues.
- Establishes a new Cannabis Public Health Advisory Council, which must study and make recommendations regarding cannabis regulation to the General Assembly.
- Creates three new funds:
- A public health fund to address health effects related to legalizing cannabis.
- A business assistance fund to increase participation in the cannabis industry by small, minority, and women-owned businesses.
- A community reinvestment fund to provide funding to communities disproportionately impacted by cannabis prohibition.
Although the ballot initiative does not directly establish a commercial market for adult-use cannabis, the new law requires the General Assembly to establish a framework for regulating cannabis during the 2023 legislative session. Once an adult-use framework is enacted, rules will be established as well as a licensing process.
Since we don’t know enough information about licensing just yet, we highly recommend you find a consulting group that can help you navigate the application process. Cannabis business applications can be tedious and might involve subject matter that’s out of your wheelhouse. You don’t want to wait until you realize you need help with the application to find guidance.
If you need capital for your Maryland dispensary, don’t go to a traditional bank. Cannabis is still considered a controlled substance on the federal level, despite over half the country employing an adult-use marijuana program. This means traditional banks are disqualified from lending to cannabis businesses. So, you’re left with a few options: bootstrap it or find private investors. Considering some dispensaries cost millions of dollars to run, especially vertically integrated operations, most people don’t bootstrap.
There are plenty of private investors willing to invest in cannabis. You just need to convince them you’re the one who will give them the best return on investment.
Consider this: your average dispensary costs between $150,000 and $2 million. You might not be spending $2 million a year on your dispensary, but even the low end of $150,000 is still a significant investment. Don’t forget the startup costs associated with simply applying for licensure, too.
Cannabis is a fun and exciting industry, especially for those who have been waiting decades to see it legalized! While you may get many qualified job applicants interested in working in your dispensary, they will still require training for budtending, health and safety, security, and more.
One way dispensaries can ensure their staff is well-prepared is by developing a comprehensive training program. Your budtenders need to be comfortable answering questions from customers and recommending products based on their adult-use needs.
You also need to be willing to invest in your staff. Don’t pay minimum wage just because you can. Think about employee retention and how that impacts your bottom line, and pay a decent wage if you’re able. Maryland currently has a minimum wage of $7.25. This isn’t much, and considering you’re trusting your staff with customers’ needs, you need to pay them enough to ensure they stay committed to doing a great job.
The most important thing about sourcing products is trusting your supplier and knowing they will give you a high-quality product every single time. This is especially important for adult-use cannabis dispensaries: Your customers want quality products.
Establishing a great relationship with your supplier is important, too. It ensures an open line of communication and might even position you to receive better deals down the line.
Maryland has forbidden jurisdictions from banning the sale of cannabis, so you should be able to set up shop in your area. However, there are certain rules (which Maryland will release in the future) that forbid dispensaries from being within a certain distance from places like schools and daycares. So, before you get your heart set on a location, wait for the state to release its regulations and ensure you’re able to operate there.
Also, keep in mind: many states require dispensaries to have security cameras at all angles of the store, so you might consider reaching out to cannabis security companies and learning more about your options.
Other compliance considerations you’ll need to consider include health and safety, quality control, cash controls, and inventory management.
Marketing Your Cannabis Dispensary
Since Maryland’s business market will no doubt be more competitive than some other states due to open applications, it’s imperative you invest in marketing to differentiate your brand. How will anyone know you offer high-quality cannabis products if you don’t tell them?
Unfortunately, cannabis businesses’ marketing strategies are limited due to strict regulations. Throwing a picture of some gorgeous bud on your Instagram? Nope. You’ll get your account banned. Setting up a paid ad of customers smoking a joint? Don’t get too far in making that ad: they’ll just take it down. Marketing channels, aside from some exceptions, do not permit content surrounding controlled substances, which cannabis is still considered to be today. However, you can still use online marketing; you just have to keep some restrictions in mind and focus on organic growth over paid ads.
At Mary Jane Marketer, we can help you market your dispensary while staying compliant. We know how to navigate the constantly changing cannabis rules and regulations.
Nobody knows your business better than you, and nobody knows cannabis marketing better than us, so book your consultation today and let’s create something amazing!
Want to learn more about opening an adult-use cannabis dispensary in Maryland? Fill out the form.