Md. Code Regs. 14.17.05.05

Current through Register Vol. 51, No. 24, December 2, 2024

Section 14.17.05.05 - Issuance of a License or Rescission of a Conditional License

A. Conditional License Period.

(1) The conditional license period:

(a) Begins on the day that a conditional license is issued to the selected applicant; and

(b) Expires 18 months after the day that conditional license was issued or at the end of an extension granted by the Administration.

(2) A conditional licensee may apply for an extension of the conditional license.

(3) The Administration may approve a one-time extension of up to 6 months, if the Administration determines the conditional licensee has made consistent good faith efforts to establish a cannabis business.

(4) During the conditional license period, a conditional licensee shall:

(a) Complete a supplemental license application;

(b) Establish legal control of the proposed site, through lease, purchase, or other means, for the cannabis business;

(c) Notify the Administration of establishment of legal control of the proposed site;

(d) Within 6 months of being issued a conditional license, demonstrate adequate capitalization to enable the business to become operational;

(e) Gain zoning or planning approval from a political subdivision, if applicable; and

(f) Register the business with the State Department of Assessment and Taxation.

(5) During a conditional license period, a conditional licensee may not:

(a) Engage in purchasing, possessing, cultivating, manufacturing, or selling cannabis or cannabis products;

(b) Make any transfer of an ownership interest that causes a change in the individual or entity that holds the controlling ownership interest;

(c) Make any transfer of control, as defined in COMAR 14.17.01; and

(d) If the conditional licensee qualified as a social equity applicant, make any transfer of an ownership interest that causes the conditional licensee to no longer comply with the social equity applicant definition in COMAR 14.17.01.

(6) During a conditional license period, a conditional licensee may obtain additional resources by adding:

(a) Grants and loans from new or existing financial sources not listed in the initial application; and

(b) Owners and passive investors.

(7) Any additional resources obtained by a conditional licensee made under §A(6) of this regulation may not violate this subtitle or Alcoholic Beverages and Cannabis Article, Title 36, Subtitle 4, Annotated Code of Maryland.

B. Rescission of a Conditional License. The Administration may rescind a conditional license if a conditional licensee, or any individual or entity included in the supplemental license application:

(1) Has been convicted of or pleaded nolo contendere to a crime involving moral turpitude, whether or not any appeal or other proceeding is pending to have conviction or plea set aside;

(2) Fraudulently or deceptively attempts to obtain a license;

(3) Is ineligible to hold an ownership interest in or control of a business licensed under Alcoholic Beverages and Cannabis Article, Title 36, Subtitle 4, Annotated Code of Maryland;

(4) Fails to reveal any material fact pertaining to the conditional licensee's qualification for a license;

(5) Fails to submit a complete supplemental license application;

(6) Fails to become licensed and operational within:

(a) 18 months after the day the conditional license was issued; or

(b) If granted an extension, the day after the expiration of any extension granted by the Administration;

(7) Fails to comply with §A(4) and (5) of this regulation;

(8) Is not registered or in good standing with the State Department of Assessment and Taxation; or

(9) Has taxes in arrears in any jurisdiction.

C. The Administration may award a license on a determination that:

(1) The conditional licensee has submitted a complete supplemental license application;

(2) The supplemental license application, including any individual or entity included in the application, does not violate §B of this regulation;

(3) The license fee specified in COMAR 14.17.21 has been paid;

(4) All inspections are passed, and all the conditional licensee's operations conform to the specifications of the application as approved pursuant to this chapter; and

(5) The proposed premises:

(a) Are under the legal control of the conditional licensee; and

(b) Comply with all zoning and planning requirements.

D. A licensed business may not grow, process, distribute, dispense, or otherwise begin business operations without approval of written documentation under §C of this regulation by the Administration.

E. The Administration may not award a license to a business who has registered with the State Department of Assessment and Taxation using a legal name that:

(1) Uses the terms "cannabis", "marijuana", or other synonym related to controlled substances;

(2) Suggests the use of cannabis as an intoxicant; or

(3) Incorporates any copyrighted material or trademark or service mark attributable to another entity.

F. The Administration may suspend, fine, restrict, or revoke a license if:

(1) A licensee has fraudulently or deceptively submitted written documentation to the Administration;

(2) A licensee has violated Alcoholic Beverages and Cannabis Article, Title 36, Subtitle 11, Annotated Code of Maryland;

(3) A licensee began operations prior to Administration approval; or

(4) It is determined that a licensee has not complied with statements in the application, including statements about standards of operation or employment practices related to diversity, equity, and inclusion.

Md. Code Regs. 14.17.05.05

Regulation .05 adopted effective 50:14 Md. R. 559, eff. 7/1/2023 (EMERGENCY); adopted effective 51:14 Md. R. 676, eff. 6/7/2024, exp. 8/31/2024 (Emergency); adopted effective 51:14 Md. R. 678, eff. 7/22/2024.