Md. Code Regs. 14.17.17.04

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

Section 14.17.17.04 - Application for Receivership

A. A prospective receiver shall apply for and receive approval from the Administration to serve as a receiver under this chapter.

B. The applicant for receivership shall submit to the Administration a completed application, in a form developed by the Administration, accompanied by the following:

(1) Documentation establishing the applicant's qualifications and ability to oversee the orderly disposition of the secured license in a manner that facilitates continuity of the licensee's operations to the extent possible.

(2) A list of all owners and principal officers of the applicant and supporting documentation, including:

(a) Certificate of incorporation;

(b) Bylaws;

(c) Articles of organization;

(d) Operating agreements;

(e) Certificate of limited partnership;

(f) Resolution of a board of directors; or

(g) Other similar business formation documents;

(3) Documentation establishing that the individual or entity is eligible to do business in Maryland throughout the term of the receivership;

(4) Criminal history record information demonstrating that the applicant for receivership does not have any disqualifying criminal conviction applicable to licensees under this subtitle;

(5) Financial records, including a record of tax payments in all jurisdictions in which an applicant has operated a business for the 3 years before the filing of the application;

(6) An affidavit confirming that the applicant does not have a financial or ownership interest in any licensee in Maryland;

(7) A disposition of license plan, subject to Administration approval, which includes:

(a) A detailed description of the plan for the orderly disposition of the license and associated business assets to satisfy the security interest in the right to the proceeds from the sale of the license; and

(b) A proposed timeline for the orderly disposition of the license of the associated licensee; and

(8) Any additional information requested by the Administration.

C. The application shall be accompanied by a non-refundable receivership application fee specified in COMAR 14.17.21.

D. Administration Determination of Receivership.

(1) Upon receipt of a completed receiver application and associated fee, the Administration shall either approve, deny, or request additional information from the applicant.

(2) If the applicant fails to provide any additional requested information to the Administration within 30 days of the request, the application shall be considered denied.

(3) The approved receiver:

(a) Shall maintain compliance with the eligibility requirements under this chapter, as evidenced by submitting an annual report to the Administration attesting to continued compliance beginning 1 calendar year after the date the receiver is approved;

(b) Shall be a third party that is not affiliated with a creditor that has or asserts rights regarding a Maryland cannabis licensee; and

(c) May not have a financial or ownership interest in any Maryland cannabis licensee during the period the receiver is actively carrying out its responsibilities under this chapter.

Md. Code Regs. 14.17.17.04

Regulation .04 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.