A new era: Impending legalization of recreational cannabis in Maryland to grow market to more than 4.5 million adults

June 24, 2023 · Yahoo!News

A green fog won’t build above Maryland’s streets on July 1. The sidewalks won’t be littered with people gripping a joint or a bong, nor will everyone be enveloped in pungent smoke. For many, it will just be a Saturday.

But the date will mark a historical and pivotal occasion. Cannabis, long ostracized from public society and formally categorized alongside drugs such as heroin, will be legal in Maryland for the first time in modern history. As a new era dawns, the state will seek to right past wrongs — when certain groups, especially Black people, were disproportionately punished for marijuana usage — and aim to regulate a robust new industry that has seen, in other states, the advent of large “gray markets.”

By a large majority, Maryland voters approved legal cannabis in November and last month, the General Assembly passed a bill outlining a regulatory system for the new industry. Maryland is now among 23 states, plus Washington, D.C., to legalize recreational cannabis.

“This is part of, I think, a national change that has been happening,” said Del. Luke Clippinger, a Baltimore Democrat who co-authored the 2022 bill that placed a referendum on last year’s statewide ballot. “I think July 1 is certainly going to be a day where everybody will know that that’s happened. But I think that from a bigger-picture perspective, it’s one step in a larger national discussion about this.”

In some ways, legal weed will have a limited overt effect. Medicinal users will continue to use cannabis for health reasons, as they have since 2017. Many recreational users will continue to smoke, albeit now legally. But legalization opens the door for easier — and safer — access, allows the industry to be taxed and regulated and could continue to remove the stigma that has been attached to the drug since it was popularized in the U.S. by 1960s counterculture.

Ninety years ago, alcohol was nationally legalized after 13 years, 10 months, 19 days, 17 hours and 27 minutes — news reports noted the exact length of Prohibition. Despite antipathy for the “great experiment,” the return of legal consumption was subdued. Some people kept showing up at speak-easies, as had been their habit over the previous decade, while others scoffed at the high price of taxed alcohol (65 cents a shot).

It wasn’t evident that John Barleycorn, a euphemism for alcohol, had been missed, stated one Baltimore Sun article after Prohibition was repealed in 1933.

“It was just a matter of bringing him into the parlor to meet the members of the family — after having peeped from behind the back-room curtains during his period of punishment,” the article read.

On a smaller scale, the legalization of cannabis ends a formal prohibition of the substance in Maryland.

Rod Phillips, a professor at Carleton University in Canada, teaches a course on the history of alcohol and to explain Prohibition to his students, he has likened current attitudes toward cannabis as being similar to alcohol a century ago.

“There were the same kind of arguments. The damage it will do to individuals, the damage it will do to society, people will just be drunk all the time or high all the time,” said Phillips, author of “Alcohol: A History.” “And then the sky didn’t quite fall in.”

Green Thumb Industries, a Chicago-based cannabis company of which Gov. Wes Moore was formerly a board member, operates four Maryland dispensaries. Painted on the wall of one of its Illinois shops is a timeline of the history of cannabis entitled, “End of Prohibition.”

“It’s part of what we’re about because we think Prohibition is ending again,” said Green Thumb CEO Ben Kovler, whose great-grandfather invested in and owned bourbon distiller Jim Beam after the end of Prohibition.

Marijuana spent much of the last century as a pariah of society. In 1987, a Supreme Court nominee, Douglas Ginsburg, withdrew from consideration upon the revelation that he had smoked marijuana. When a photo appeared publicly in 2009 of 23-year-old Michael Phelps, the Olympic swimming phenom from Baltimore, apparently smoking weed, one official said he “let down the world.”

During the 20th century’s war on drugs, many people, particularly people of color, were imprisoned for possession of the substance.

But cannabis’ public perception has shifted significantly. And in the coming decades, boosted by legalization, the stigma is likely to continue to erode. There are still negative health outcomes from cannabis abuse — including use by adolescents or drivers — but it boasts many health benefits and the majority of Americans favor of its legalization.

Although the law has not stopped many from smoking cannabis in years past, legalization is likely to increase usage, given the availability and lack of a criminal deterrent. People in states with adult-use cannabis use it roughly 24% more frequently than those in states without it, according to a 2022 study.

And legalization will certainly lead to an increase in legitimate sales. Maryland’s cannabis industry, while limited to medical consumers, generated roughly $500 million in revenue last year. That number could triple or quadruple given the rise in possible customers. Currently, 163,000 Marylanders have a license to purchase medicinal cannabis, but Maryland’s adult population of more than 4.5 million will be eligible as of Saturday.

Curio Wellness, a Baltimore County cannabis grower, began to bulk up inventory months ago. It won’t be debuting products to greet the new, nonmedicinal crowd, instead ramping up production of existing ones.

“Conservatively, we think the market will double,” said Rebecca Raphael, Curio’s chief revenue officer.

That’s on par with an estimate from the Maryland Cannabis Administration, which projects $600 million in adult-use revenue in the first year.

Connecticut opened up adult-use sales in January and as of May, it was nearly as popular as medicinal. New Jersey launched recreational cannabis in April 2022 and by the end of that year, recreational sales generated 2.5 times as much revenue as medical. In Missouri, which started adult-use in February, recreational cannabis sales have outpaced medical 3-to-1.

Each state is different, though, and Maryland already has a substantial medicinal market, with roughly 100 dispensaries open in the state. Of those, at least 94 have converted their licenses from medical-only to adult-use, which will allow them to sell to recreational users starting Saturday.

More licenses will be awarded by Jan. 1, with up to 80 dispensaries receiving a standard license via a lottery system. In an effort to equitably dole out licenses in a lucrative industry, lawmakers limited this round of licenses exclusively to “social equity applicants.” To qualify, 65% of an applicant’s ownership must have lived in a “disproportionately impacted area” by cannabis prohibition for at least five of the past 10 years, gone to high school in such an area, or attended a public university with a substantial population of low-income students.

The criteria are “race and gender neutral,” noted Christina Betancourt Johnson, the founder and CEO of Standard Wellness Maryland, a cannabis cultivator.

The “historic piece of legislation” allows those who live in communities “negatively and disproportionately impacted by the war on drugs to participate in the economic upside of adult-use in Maryland,” she said.

Enforcement of marijuana laws has a long history of perpetuating racism nationally. In Maryland in 2018, Black people were 2.1 times more likely than white people to be arrested for cannabis possession, a rate lower than the national average.

Another benefit of legalization, supporters say, is to end unfair enforcement.

Jamel Holley, a former New Jersey assemblyman who was involved in the legalizing cannabis for recreational use in that state, said “minorities, in particular, always had to watch over their shoulders.” Legalizing marijuana lifts that burden, he said.

“We do see a shift in urban communities, with people feeling free from not being probed by law enforcement,” he said.

Maryland’s 2023 law also creates a Cannabis Business Assistance Fund, which will financially aid small, minority and women-owned businesses in the recreational industry.

One concern, despite legalization, is the advent of a “gray market” in which people continue to buy cannabis — that’s untaxed and unregulated — through less-than-legal channels. States with disorganized rollouts or high taxes have seen especially large gray markets.

“Every adult-use state has run into this problem,” said Vanderbilt Law School professor Robert Mikos, an expert on cannabis policy.

Maryland lawmakers initially proposed an adult-use tax (medical customers are exempt) that would begin at 6% and then increase annually until it reached 10%. But they opted instead for a 9% tax — equivalent to that of alcohol and lower than in many other states. Maryland is likely to have a gray market, but one that pales in comparison with New York, for example, where a slow rollout fostered a booming underground market.

There are other complications from legalized cannabis. One woman in Washington, D.C., successfully sued her neighbor over the smell of his cannabis usage reaching her home.

And cannabis remains illegal federally, categorized alongside incongruent substances such as ecstasy and bath salts. Leah Sera, co-director of the University of Maryland, Baltimore’s Medical Cannabis Science and Therapeutics program, is among those who “absolutely” hopes that changes. (Full Story)

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