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More pot-growing licenses may be on the way

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Washington - Top Democrats in the Maryland legislature have agreed to expand the ranks of medical marijuana growers in the state as part of an overhaul of the burgeoning but beleaguered industry.

Lawmakers are still wrangling, however, over which businesses should have a shot at entry into the lucrative market.

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Fifteen companies preapproved last year by regulators can open cultivation sites as early as summer if they pass final inspections and background checks.

Five more growing licenses would be granted under a bill that passed the House of Delegates on Tuesday and is aimed at favouring minority-owned companies.

That bill will probably be amended in the Senate Finance Committee as early as Thursday. House and Senate negotiators say they're on the brink of a compromise over how many new licenses to issue and whether to shrink the total number of growers if any company fails inspection.

The Legislative Black Caucus of Maryland, the largest caucus in the legislature, is insistent on expanding minority participation in the industry, after the Maryland Medical Marijuana Commission failed to license any African American-owned growers.

Lawmakers are also trying to address the concerns of two other companies who sued the state after regulators rejected their applications in favour of lower-ranked bids from geographic regions of Maryland where no growers had been approved.

But the 15 businesses already given cultivation licenses have banded together to oppose expanding the market, saying their business plans and pitches to investors were based on having an early and exclusive foothold in the industry.

"The way this whole entire thing was handled by this commission was really screwed up, so really the legislature is trying to resolve a messy situation," said Sen. Thomas Middleton, D-Calvert, who chairs the Finance Committee that is amending the medical marijuana bill.

As written, the legislation passed by the House calls for an expedited study of racial disparities that could be completed in time to justify a race-conscious selection of five new growers as early as fall.

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The Black Caucus has dropped its demand that no medical marijuana businesses start operating until minority-controlled businesses got licenses.

"We don't want to delay the process," said Del. Cheryl Glenn, the Baltimore Democrat who chairs the caucus. "We do want the patients . . . to be able to get the medications."

Middleton says he is supportive of the House legislation, which has more licenses meant for minority-owned companies than the Senate version. But he and other powerful senators, including Senate President Thomas "Mike" Miller, D-Calvert, want to offer two additional olive branches to other industry players.

If any of the original 15 growers fail to pass inspections, they want to throw those licenses out of the pool rather than giving them to the next highest-ranked companies. This would effectively reduce the amount of competition among growers.

And they would also give licenses to Maryland Cultivation and Processing and Green Thumb Industries, the two companies denied in the name of geographic diversity.

Those companies have agreed to drop their lawsuits if a compromise is approved. If Middleton's proposal for as many as 22 grower licenses gets pushback, Glenn said, the Black Caucus will prioritize licenses for minority-owned companies over the applicants suing the state.

"They absolutely were wronged by the commission," Glenn said of Maryland Cultivation and Processing and Green Thumb Industries. "But I'm not willing to sacrifice any of the licenses that we have negotiated to be awarded to African Americans and other minorities."

A leader of the Maryland Wholesale Medical Cannabis Association, which represents preapproved growers and processors, said the association was opposed to "arbitrarily" increasing the number of licenses by nearly 50 percent to help applicants that fell short.

"Our members relied on commitments from the state when making their business decisions, and it is reasonable for them to expect that the state would honour those commitments," Jake Van Wingerden, president of Cecil County's SunMed Growers, said in a statement. "Many of our members are just months away from delivering medical cannabis to patients, and we are opposed to any changes that would cause additional delays to this important program."

The licensing changes are encountering some Republican resistance - although GOP lawmakers do not have a strong enough presence in the legislature to threaten passage.

"They want to do a lot of things in a very critical point for this industry, and I do not want to see that because I want to see the industry move forward," Del. Susan Krebs, R-Carroll. "I'm concerned about delays, and I'm also concerned about new lawsuits."

The legislation would restructure the marijuana commission as well.

It also contains a provision to bar lawmakers from working in the industry, in response to the ethics probe of Del. Dan Morhaim, D-Baltimore County, who was reprimanded by the House for trying to shape industry regulations without fully disclosing he was affiliated with a prospective dispensary.

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