During the November midterms, over 65% of Maryland voters chose to legalize adult-use cannabis.
This means that starting July 2023, adults over 21 can possess up to an ounce-and-a-half of marijuana and 10 grams of cannabis concentrates. Criminal penalties for possession of up to 2.5 ounces will be removed and prior convictions for offenses now legal will be automatically expunged.
Among the largest multi-state operators already operating in the state’s medical marijuana market are Curaleaf CURLF, Verano VRNOF, Terrascend TRSSF and Trulieve TCNNF.
What does recreational marijuana legalization in Maryland mean for these operators and other cannabis businesses? What does it mean for the state? Benzinga wanted to find out, so we spoke with Matt Darin, CEO of Curaleaf, and James Leventis, EVP of compliance and government affairs at Verano.
“There is a lot of room for growth by operators of all sizes while ensuring that the state meets its social equity goals,” Darin told Benzinga. “Maryland borders a legal state so this gives the local industry an opportunity to gain back market share by allowing consumers to buy closer to home. Cannabis generates important tax revenues, creates local jobs, provides additional solutions for the various health and wellness needs of MD citizens and supplies necessary funding for social equity initiatives. “
Curaleaf plans to continue its collaboration with state regulators when the Cannabis Business Assistance Fund and Cannabis Public Health Fund are established, Darin added.
Leventis agreed, pointing out that adult-use cannabis “will bring tremendous economic growth, tax revenue and career opportunities benefiting businesses, individuals and communities statewide.” He noted that the start of recreational cannabis sales should benefit cannabis operators of all sizes.
What’s Next? Medical Patients Still First
“The Maryland adult-use market is expected to generate $550 - $600 million in its first year and potentially up to $1 billion by fourth year,” Darin said. “We look forward to identifying opportunities for growth in the state after adult-use regulations are established, and intend to remain a leading provider of cannabis in the state to both medical and adult-use customers.”
Curaleaf is operating the maximum allowed number of dispensaries in Maryland – four. It also runs a wholesale business. The Wakefield, Massachusetts-based company has been helping other states with medical marijuana programs, such as Arizona and New Jersey, transition to adult-use, “by relying on our infrastructure and experience in offering a variety of premium, innovative, highly tested products,” Darin said.
“It’s important that the transition to adult use does not alter the commitment to our medical patients, who have been the heart of the state’s program prior to adult-use legalization,” he added. “It’s also important that regulations ultimately support jobs and business opportunities for the communities most impacted by the War on Drugs.”
Chicago, Illinois-based Verano strategically invested in the Maryland cannabis market earlier with plans to extend its footprint once the state transitions from a medical to a recreational cannabis program. Maryland was one of the states that was most expected to approve legalization this year, as recent polls confirmed majority support on several occasions.
“In the past year, we’ve had open dialogue with the state to discuss program parameters, share feedback from other state programs, and collaborate on solutions that will ensure a successful adult use program in Maryland. We look forward to continuing our conversations as the program regulations develop,” Leventis said.
Is Federal Reform On The Horizon?
As Maryland and Missouri become the 20th and 21st states to legalize adult-use cannabis, they have further confirmed nationwide support for reform. According to Gallup’s most recent poll from November 2022, as many as 68% of U.S. residents support cannabis legalization. The figure is the same as last year, which is the highest percentage of support ever revealed in a national Gallup poll. It looks like a large majority of Americans are ready for federal reform, so, is it coming?
“The Maryland and Missouri election results send a signal to the federal government that there is widespread public support for cannabis legalization,” Darin said. “Seeing more Republican-leaning states like North Dakota and Arkansas continue to have cannabis on the ballot is also encouraging. With 21 adult-use states now, the next step we need to see is SAFE banking, along with sensible legislative reform that provides relief for cannabis businesses of all sizes, and we’re encouraged by the bipartisan support we’ve seen on that front of late.”
Other industry experts also agree that SAFE Plus might be the first important cannabis-related bill to gain President Biden’s signature.
Leventis also believes that Maryland’s overwhelming approval “demonstrates Americans’ growing support for cannabis legalization and reform. As more states consider introducing medical and adult use programs, we look forward to any incremental progress in favor or cannabis legalization and reform, including legislation that would allow us to gain access to traditional banking resources and uplist on a U.S.-based exchange.”
Curaleaf shares closed Thursday market session 5.11% higher at $6.13 per share.
Verano shares were up 4.69% at $5.58 per share at the closing hours Thursday afternoon.
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