Recreational cannabis legalization in Maryland is a done deal. The referendum on this issue is scheduled for this November will happen. After that, the real fight begins. The state parliament has until April 10, 2023 to decide on the regulation of the industry. There will be critical debates about taxes and criminal background checks. But the least understood and most important question will be how Annapolis determines which companies get licenses to grow, process and dispense the product, which in turn determines who benefits from legalization.
Legislators should introduce a location-based licensing system to ensure cannabis businesses are owned and located solely by residents of the state’s 25 poorest zip codes. These policies may be some of the most transformative our state has seen in decades.
In the state of Washington, whose population is only 25% larger than Maryland, the cannabis industry has become an unimaginable source of wealth. The industry generates over $2.7 billion in revenue and $876 million in taxes each year and employs 18,360 people. Maryland should expect similar numbers. If this huge industry is concentrated in the state’s poorest neighborhoods, it will generate enough economic growth to rejuvenate those communities.
For this reason, indoor growing and processing operations should be allocated and located in the poorest 15 urban zip codes, while outdoor and greenhouse operations should be allocated and located in the 10 poorest rural zip codes. To keep poor communities from being swamped with marijuana and to ensure that industry profits flow into those communities, not out of them, retail dispensaries should be located statewide, but they should also be owned by long-term residents of those communities its 25 zip codes. To further the economic impact, the taxes paid by all of these companies should remain in their communities and ideally be used to fund the Kirwan Commission’s recommendations on equitable schools.
These policies represent a significant break from the past. The 25 targeted ZIP Codes have bled manufacturing jobs dry for decades and are now responsible for over 50% of the state’s 560 annual homicides and 2,200 overdose deaths. Baltimore City, Prince George’s County, the East Coast and Western Maryland are the neediest parts of our state. Giving them ownership of this multi-billion dollar industry will create a new generation of companies and business owners who anchor these communities. As employees and owners of this new industry, people who might otherwise have left town or ended their lives managing operations in grocery chains or chicken factories will finally create generational wealth for their families, buy their homes, use their success to start more businesses and become leaders of their hometowns.
Of course, new businesses bring inevitable challenges, and some will fail. While ownership and business location remain restricted, Maryland needs to remove all unnecessary barriers to entry and regulations to ensure that like in California, people don’t have to take enormous financial risk but can start small, with as little as $10,000 and build their businesses organic looking. In Maryland’s medical marijuana system, established in 2014, some of the biggest cost drivers were a lengthy application process, FBI background checks, strict limits on the number of licenses, minimum size requirements for operations, and most importantly, unnecessary zoning restrictions. These burdens should be removed while more effective and less expensive safeguards such as seed-to-sale tracking, contamination testing and mandatory 24/7 video recording of all facilities should be consistently implemented. To continue to ensure that a large number of small businesses have the best chance of success, there should be a maximum size limit to prevent monopoly, and the state should provide funding for a startup accelerator to prepare budding entrepreneurs for the fundamentals of growth, Handling and management of a company.
When lawmakers make the rules for recreational cannabis next spring, they’ll face immense pressure from those already licensed in the Maryland medical system and from multi-state cannabis conglomerates. As residents, we must ensure that the legislature withstands this pressure. The new rules were intended to take a radically new, location-based approach to licensing. It’s time for Maryland to repair the devastation black and Hispanic families have caused by criminalizing cannabis. It’s time to replace the lost jobs in our deindustrialized and ailing rural areas. It’s time we gave our most vulnerable a real opportunity to build their own businesses and lift themselves and their communities out of poverty.
Amar Mukunda ([email protected]) is a Maryland native and former cannabis entrepreneur who has built successful cannabis companies in Washington, California and Maryland. Mr. Mukunda also serves as Associate Director of Roca Baltimore, a gun violence prevention program focused on serving Baltimore’s most vulnerable young men, and launches the nonprofit Baltimore Generational Wealth Initiative to promote home and business ownership in to promote the poorest neighborhoods of the city.