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  Marijuana  Maryland’s High-Demand Marijuana Market Stalled by Regulations and Delays
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Maryland’s High-Demand Marijuana Market Stalled by Regulations and Delays

Lars BeckersLars Beckers—March 14, 20250
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Maryland’s ambitious social equity marijuana program is struggling to get off the ground. Nearly a year after awarding licenses, not a single new business has opened. The problem? A mix of tough regulations, limited investment opportunities, and stringent ownership requirements that make it nearly impossible for social equity applicants to turn their licenses into operational dispensaries.

Investors Hesitate as Ownership Rules Restrict Returns

Launching a marijuana business isn’t cheap. Between licensing fees, real estate, security requirements, and product sourcing, the startup costs are significant. But Maryland’s rules make it hard to secure outside investors, a crucial element for any new venture.

The state’s social equity program requires that the original license holder maintain at least 51% ownership. That means potential investors can only claim a minority stake, limiting their control and potential returns. Even a separate social equity partner is capped at 14%, leaving just 35% of the company available for a non-social equity investor.

“It can be challenging to entice investors and raise capital if you can’t give them any ownership or control,” said Meg Nash, an attorney at Vicente law firm who specializes in cannabis regulations in Boston and Maryland. Without the ability to offer significant stakes, license holders are left scrambling to find capital in unconventional ways.

Real Estate Hurdles Add Another Roadblock

Finding a location for a marijuana business in Maryland is easier said than done. With zoning laws, local pushback, and landlords wary of leasing to cannabis companies, many applicants have struggled to secure real estate.

  • Some municipalities have banned dispensaries outright, cutting down potential locations.
  • Other areas have strict distance requirements, preventing cannabis businesses from opening near schools, parks, or residential zones.
  • Even when space is available, high demand has driven up rental prices, making it difficult for underfunded social equity licensees to compete.

With limited investment and sky-high real estate costs, the delay in getting these businesses operational is hardly surprising.

Five-Year Lock-In Raises Concerns

Maryland’s regulations also include a five-year holding requirement. This means social equity applicants cannot sell their licenses or transfer ownership for at least five years. The rule was put in place to prevent quick flips, a problem seen in other states where applicants sold off their licenses shortly after receiving them.

While the intention behind the rule is to maintain equity in the industry, critics argue that it further stifles growth. Holding onto a license for five years with limited investment options and mounting operational costs could push some applicants into financial distress before they ever get started.

Maryland’s Cannabis Market Remains in Limbo

The demand for legal marijuana in Maryland is strong, but the supply chain remains bottlenecked. Dispensaries and customers alike are waiting for new businesses to enter the market, yet the state’s regulatory framework is keeping doors shut. Until these restrictions are addressed, Maryland’s social equity program may remain an ambitious idea rather than a functioning reality.

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Lars Beckers

Lars Beckers is a distinguished senior content writer at MMJ Gazette, bringing a wealth of experience and expertise to the realm of medical marijuana and cannabis-related content. With a deep understanding of the industry and a passion for sharing knowledge, Lars's articles offer readers comprehensive insights and engaging narratives in the dynamic world of cannabis. Known for his meticulous research, clarity of expression, and commitment to delivering high-quality content, Lars brings a seasoned perspective to his work, educating and informing audiences on the latest trends and developments in the field.

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