WES MOORE, Governor Ch. 242
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Chapter 242
(House Bill 272)
AN ACT concerning
Cannabis Licensing and Registration – Use of Straw Ownership – Prohibition
FOR the purpose of prohibiting a person from applying for or holding a cannabis license or
registration under certain circumstances if an ownership interest in the license or
registration is for the limited purpose of satisfying certain requirements of
registration or licensure; requiring the Maryland Cannabis Administration to deny
a certain application or revoke a cannabis license or registration if the applicant,
licensee, or registrant is determined by the Administration to be in violation of this
Act or convicted of a violation of this Act; and generally relating to straw ownership
and cannabis licensing and registration.
BY repealing and reenacting, without amendments,
Article – Alcoholic Beverages and Cannabis
Section 36–101(a) and (o)
Annotated Code of Maryland
(2016 Volume and 2023 Supplement)
BY adding to
Article – Alcoholic Beverages and Cannabis
Section 36–1103
Annotated Code of Maryland
(2016 Volume and 2023 Supplement)
SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND,
That the Laws of Maryland read as follows:
Article – Alcoholic Beverages and Cannabis
36–101.
(a) In this title the following words have the meanings indicated.
(o) (1) “Control” means:
(i) the decision–making authority over the management,
operations, or policies that guide a business; or
(ii) authority over the operation of the technical aspects of a
business.
(2) “Control” includes: Ch. 242 2024 LAWS OF MARYLAND
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(i) holding a right to veto significant events;
(ii) the right or authority to make or veto decisions regarding
operations and strategic planning, capital allocations, acquisitions, and divestments;
(iii) the right or authority to appoint or remove directors,
corporate–level officers, or their equivalent;
(iv) the right or authority to make major marketing, production, and
financial decisions; and
(v) the right or authority to execute exclusive contracts or significant
contracts in the aggregate of $10,000 or greater on behalf of the licensee.
36–1103.
(A) IN THIS SECTION , “GENUINE OWNERSHIP ” MEANS AN OWNERSHIP
INTEREST IN AN APPLI CANT, A CANNABIS LICENSEE , OR A REGISTRANT THAT IS
EVIDENCED BY RECORD OWNERSHIP IN WHICH T HE OWNER, REGARDLESS OF THE
AMOUNT OF CAPITAL OR ASSETS THAT THE OWNE R CONTRIBUTES TO THE
APPLICANT, LICENSEE, OR REGISTRANT , ENJOYS THE CUSTOMARY INCIDENTS OF
OWNERSHIP AND SHARES IN THE PROFITS AND L OSSES OF THE CANNABI S LICENSE
OR REGISTRATION PROP ORTIONATE TO THE PER CENTAGE OF THE OWNER ’S
INTEREST IN THE CANN ABIS LICENSE OR REGI STRATION.
(B) A PERSON MAY NOT APPLY FOR OR HOL D A CANNABIS LICENSE OR
REGISTRATION UNDER T HIS TITLE IF AN OWNE RSHIP INTEREST IN TH E LICENSE OR
REGISTRATION IS :
(1) NOMINAL OR WITHOUT T HE BENEFITS AND RISK S OF GENUINE
OWNERSHIP OR CONTROL; AND
(2) FOR THE LIMITED PURP OSE OF SATISFYING THE REQUIRE MENTS
UNDER THIS TITLE FOR CANNABIS LICENSEES O R REGISTRANTS , INCLUDING
REQUIREMENTS FOR SOC IAL EQUITY LICENSEES OR REGISTRANTS .
(B) (C) A PERSON WHO VIOLATES SUBSECTION (A) (B) OF THIS SECTION
IS GUILTY OF A MISDE MEANOR AND ON CONVIC TION IS SUBJECT TO A FINE OF NOT
MORE THAN $2,500 OR IMPRISONMENT FOR NOT MORE THAN 1 YEAR OR BOTH.
(C) (D) SUBJECT TO THE HEARIN G PROVISIONS OF § 36–202 OF THIS
TITLE, THE ADMINISTRATION SHALL DENY AN APPLICATION FOR A CANNABIS WES MOORE, Governor Ch. 242
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LICENSE OR REGISTRAT ION OR REVOKE A CANNABIS LICENSE OR REGISTRAT ION
UNDER THIS TITLE IF THE APPLICANT , CANNABIS LICENSEE , OR REGISTRANT IS :
(1) DETERMINED BY THE ADMINISTRATION TO BE IN VIOLATION OF
SUBSECTION (B) OF THIS SECTION; OR
(2) CONVICTED OF VIOLATI NG SUBSECTION (A) (B) OF THIS SECTION.
SECTION 2. AND BE IT FURTHER ENACTED, That this Act shall take effect
October June 1, 2024.
Approved by the Governor, April 25, 2024.