Marijuana Legalization Bill Sponsored By Maryland Senate Leaders Gets Hearing As Lawmakers Work To Merge With House Plan

A marijuana legalization bill backed by top Maryland lawmakers got its first hearing on Thursday, with much of the discussion focused not on whether to end prohibition but how specifically to do it—including ways to merge the legislation with a separate proposal in the state’s House of Delegates.

While the Senate Finance Committee did not vote on the measure—which is cosponsored by Senate President Bill Ferguson (D), Majority Leader Nancy King (D) and key committee chairs—lawmakers used the meeting to discuss provisions of the legislation and gauge the likelihood of its success.

“I wanted to get a little feedback from the committee,” said the bill’s lead sponsor, Sen. Brian Feldman (D), who is also vice chair of the panel that held the hearing. “I didn’t have a good take of where the committee is and where the committee’s concerns are.”

Under Feldman’s bill, SB 708, adults 21 and older would be able to purchase and possess up to four ounces of marijuana or products containing up to 1,500 milligrams of THC. They could also grow up to six cannabis plants at home for personal use.

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The bill is largely similar to House Bill 32, introduced late last year by Del. Jazz Lewis (D) and revised last month to better align with the Senate legislation. Though the two bills are now largely similar, important differences remain around business licensing, social equity and other regulatory matters.

Feldman told Senate colleagues he’s been working with Lewis to unify the two measures. “Delegate Lewis drafted his piece of legislation, he had a hearing and he has already amended his bill to make it look more like this bill,” the senator said. “By the same token, I’m working on a package of amendments myself to get this bill a little closer to Delegate Lewis’s.”

Feldman added that he has not yet introduced those amendments because he wanted to incorporate feedback from the committee. “If there is a will to move a bill this session, I commit to working with Delegate Lewis,” he said. “The differences now are actually very narrow, and I’m pretty confident we can come up with one bill.”

Most of the differences between the two bills center on the licensing and regulatory processes. The House bill, however, is the preferred bill among social and racial equity advocates, including Del. Darryl Barnes (D), chair of Maryland’s Legislative Black Caucus.

“Cannabis prohibition has devastated communities and has been a tool of racial oppression,” Barnes, who in past sessions has opposed legalization, said in a statement earlier this week. “I was ready to support the legalization bill after I saw how HB 32 would ensure Black communities that have been devastated by cannabis prohibition would benefit, in the form of community reinvestment, small business ownership, jobs training and good careers, along with expungement.”

Both bills would set up equity funds designed to help address the disproportionate impact of the war on drugs, which has been enforced unfairly against Black, brown and low-income people, along with other marginalized groups.

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“We’re talking reentry programs, scholarship assistance, money for HBCUs, housing assistance, homeownership, small business loans, community-based workforce development—that’s all in this bill,” Feldman said at Thursday’s hearing, claiming the proposal “would provide the strongest set of social equity programs of any state in the nation.”

Under both bills, existing medical marijuana businesses could pay a fee in order to be able to participate in the adult-use market. Those fees—$1 million under the House legislation and $750,000 under the Senate bill—would fund a Social Equity Startup Fund, which would provide application assistance and financing to social equity applicants.

Both bills would also give equity applicants an advantage when scoring license applications, and they would reserve access to certain license categories, such as transportation and delivery, exclusively to equity applicants.

But where they diverge, HB 32 tends to favor more inclusive measures. The bill would funnel more money into the newly created equity funds, for example, and create unlimited so called micro-grow licenses in an effort to expand access to the new industry. The Senate bill, by contrast, would set a hard cap on small grows.

“Capping micro-grow licenses reduces opportunity for small and minority-owned businesses and will prevent social equity producers and retailers from knowing they will be able to secure a cultivation license,” the advocacy group Marijuana Policy Project (MPP) explained in a post comparing the two bills. “This would put these new small businesses at a competitive disadvantage compared to large, vertically-integrated growers they would have to depend on for supply.”

HB 32 also includes a “race to the top” provision that would require marijuana businesses to show community benefits—related to diversity, labor practices, environmental stewardship and equity contributions—in order to expand beyond two locations. SB 708 does not contain that provision.

The House bill also includes language requiring a cannabis businesses to sign a peace agreement with a union after hiring its 10th employee, while the Senate bill does not.

SB 708 would prohibits regulators from increasing the number of available business licenses until 2026. Under the House proposal, regulators must consider demand and begin accepting applications for new licenses in February 2024.

Olivia Naugle, a legislative analyst for MPP, said in an email to Marijuana Moment that the group “urges SB 708 to be amended to mirror Delegate Jazz Lewis’ HB 32 and for the legislature to swiftly pass it.”

Supporters of legalization who spoke at the Senate hearing included Hope Wiseman, founder and CEO of Maryland medical marijuana company Mary and Main. Wiseman asked lawmakers to add an amendment clarifying whether cannabis taxes would be structured as a sales tax or an excise tax, however, and urged the panel to consider a flat tax rate, rather than the current plan of increasing taxes over time.

Under the Senate bill, taxes would climb from 10 percent to 20 percent over the first several years of commercial sales. The House measure would go from 15 percent to 25 percent over the same period. Both bills allow local taxes of up to 3 percent.  Supporters of the phase-in say the provision is designed to keep the cost of legal cannabis stable while remaining competitive with the illicit market.

Feldman said at the hearing that SB 708 could bring in roughly $300 million per year once the market is up and running.

Among those who testified against the bill, most said they were concerned about the health and social impacts that legalization might bring. Many said they were concerned legalization would lead to increased cannabis use, especially among youth.

“It seems that we may just be willing to forgo those risks and impacts mainly because our government has a spending problem,” said Sen. Stephen Hershey (R), a member of the committee. “It’s no secret that this bill is about generating revenue.”

Sen. Joanne Benson (D), said that she’s skeptical about the bill, noting that some members of the Legislative Black Caucus helped champion medical marijuana in the state but “feel like we were left with crumbs off the table” in terms of racial equity.

“Many of us are not feeling good about passing this bill, because we felt that we got a little stung” with the prior medical cannabis legislation, she said.

Feldman replied that both the House and Senate measure “have the strongest social equity concepts in the country,” adding that more money could be sent to state equity funds if the bill were amended. “If there’s interest in moving the bill,” he said, “we can set it however we want to set it.”

A number of other Maryland legalization supporters have pointed to nearby Virginia, where lawmakers recently sent a legalization bill to the governor.

“I applaud their commitment towards advancing a sensible legalization bill that includes social equity provisions,” Del. Lewis said in a press release. “Now it is the time for Maryland to follow suit by passing HB 32.”

I am thrilled that Maryland has a real opportunity now to pass consequential and equitable cannabis legalization. My legislation, HB 32 is our best chance to give justice to those incarcerated and create a new open cannabis industry.https://t.co/MuGIgfJBax

— Delegate Jazz Lewis (@JazzforMaryland) March 5, 2021

The reform push is also gaining momentum in neighboring Washington, D.C., where Mayor Muriel Bowser (D) and the chairman of the District Council recently introduced competing legal marijuana bills.

Maryland legalized medical marijuana through an act of the legislature in 2012. Two years later, a decriminalization law took effect that replaced criminal penalties for possession of less than 10 grams with a civil fine of $100 to $500. Since then, however, a number of efforts to further marijuana reform have fallen short.

A bill last year to expand the decriminalization possession threshold to an ounce passed the House last year but was never taken up in the Senate.

In May, Gov. Larry Hogan (R) vetoed a bill that would have shielded people with low-level cannabis convictions from having their records publicized on a state database. In a veto statement, he said it was because lawmakers failed to pass a separate, non-cannabis measure aimed at addressing violent crime.

Hogan has hesitated to take a strong stand on marijuana in the past, though he’s more recently signaled openness to the idea. In 2017, he declined to respond to a question about whether voters should be able to decide the issue, but by mid-2018 he had signed a bill to expand the state’s medical marijuana system and said full legalization was worth considering: “At this point, I think it’s worth taking a look at,” he said at the time.

As for Maryland lawmakers, a House committee in 2019 held hearings on two bills that would have legalized marijuana. While those proposals didn’t pass, they encouraged many hesitant lawmakers to begin seriously considering the change.

“There are now 15 states in the United States that have gone full-blown adult-use legalization, plus the District of Columbia,” Feldman said at Thursday’s hearing. “Just like we saw with medical cannabis, opinions are evolving dramatically very quickly.”

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