The Real Deal - Fall 2023
Date: December 11, 2023
Recreational Cannabis in Maryland (Part 2 of 2)
How Will Counties Use Their Land use Regulations to Limit Dispensary Locations?
Since July 1, 2023, state licensed cannabis dispensaries have been permitted to sell cannabis products for adult recreational use. Prior to this, dispensaries were limited to selling medical cannabis products to individuals with prescriptions. Now, however, any person over the age of 21 can legally purchase cannabis from a licensed dispensary. With this new consumer base comes the need for additional dispensary licenses to accommodate the demand.
The Maryland Cannabis Administration (formerly, the Maryland Medical Cannabis Commission) is the State agency that oversees licensing. Maryland currently has 97 licensed dispensaries opened to the public. These dispensaries were State licensed medical cannabis businesses that converted their licenses adding adult recreational use. The following chart provides a breakdown of the number of current dispensary licenses per jurisdiction.
| Existing Dispensary Licenses Per Jurisdiction | |
| Allegany County | 2 |
| Anne Arundel County | 9 |
| Baltimore County | 18 |
| Baltimore City | 9 |
| Calvert County | 0 |
| Caroline County | 0 |
| Carroll County | 2 |
| Cecil County | 2 |
| Charles County | 3 |
| Dorchester County | 1 |
| Frederick County | 6 |
| Garrett County | 0 |
| Harford County | 5 |
| Howard County | 7 |
| Kent County | 0 |
| Montgomery County | 17 |
| Prince George’s County | 9 |
| Queen Anne’s County | 1 |
| St. Mary’s County | 2 |
| Somerset County | 0 |
| Talbot County | 0 |
| Washington County | 1 |
| Wicomico County | 1 |
| Worchester County | 2 |
This past November, the Maryland Cannabis Administration opened the first round of new license applications in which 75 new dispensary licenses are available. The first round is limited to social equity applicants. To qualify as a social equity applicant, the individual must have (1) lived in an area that has been disproportionately impacted by the war on drugs; (2) attended a public school in a disproportionately impacted area within five of the last ten years; or (3) attended a university in the State for at least two years where 40% of the students were eligible for a Pell Grant. For a company to be eligible for a license during this round, at least 65% of the ownership interest must be held by one or more qualified applicants. Per the Medical Cannabis Administration, as of November 20th, 1,500 individuals have been verified as qualifying.
In January 2024, the Maryland Cannabis Administration will begin issuing the 75 new dispensary licenses based on a lottery system of the qualified applicants. The licenses have been allocated among Maryland jurisdictions with an emphasis placed on communities disproportionately impacted by the war on drugs. Baltimore City, Prince George’s County, Montgomery County, and Baltimore County have received the largest number of allocations. The following chart provides a breakdown of the number of allocated dispensary licenses per jurisdiction in the first round.
| Allocated New Dispensary Licenses Per Jurisdiction | |
| Allegany County | 1 |
| Anne Arundel County | 5 |
| Baltimore County | 6 |
| Baltimore City | 11 |
| Calvert County | 3 |
| Caroline County | 1 |
| Carroll County | 2 |
| Cecil County | 2 |
| Charles County | 2 |
| Dorchester County | 1 |
| Frederick County | 3 |
| Garrett County | 1 |
| Harford County | 3 |
| Howard County | 3 |
| Kent County | 1 |
| Montgomery County | 9 |
| Prince George’s County | 9 |
| Queen Anne’s County | 1 |
| St. Mary’s County | 2 |
| Somerset County | 1 |
| Talbot County | 2 |
| Washington County | 3 |
| Wicomico County | 2 |
| Worchester County | 1 |
A second round of new license applications is expected to open in May 2024 and will be available to all applicants. No official number has been set regarding the number of licenses available in the second round. It is anticipated, however, that the second round will include over 100 new dispensary licenses.
With this explosive growth, one open question is where local jurisdictions will permit these new dispensaries to be located under their respective zoning ordinances. The State cannabis law provides some restrictions regarding locations that apply in all jurisdictions. Under the State law, new dispensaries may not be located within 500 feet of a primary or secondary school, childcare center, playground, recreation center, library or public park. They also cannot be located within 1,000 feet of another cannabis dispensary. The State statute permits local jurisdictions to decrease these distances. The State law also prohibits local jurisdictions from establishing zoning requirements that “unduly burden” a cannabis license. What qualifies as an “undue burden,” however, has yet to be established. Outside of this general state preemption, jurisdictions are free, through their individual enabling statues, to regulate the location of dispensaries as they see fit.
In general, local jurisdictions categorize uses as either (1) permitted uses or (2) special exception/conditional uses. A permitted use is one that is allowed by right in a designated zoning district. Special exception or conditional uses are only allowed in designated zoning districts after receiving approval through a public hearing process. As of now, there is no consistent zoning use category or definition among jurisdictions for cannabis dispensaries. Prior to the passage of adult recreational use, some jurisdictions considered medical dispensaries as a pharmacy or similar retail use and permitted them by right in commercial zoning districts. Other jurisdictions created a specific medical cannabis dispensary category and placed limits on where they could be located in commercial zones. At this point, no jurisdiction allows dispensaries in exclusively residential zones.
Some jurisdictions have taken proactive steps to update their zoning regulations to address recreational cannabis dispensaries. This past summer, the Baltimore County Council passed Bill 36-23, allowing dispensaries (medical and recreational) by right in most business districts, but only by special exception if the property is located in a designated Commercial Revitalization Zone. They are prohibited, however, from being located within 500 feet of a public or private elementary school, middle school, high school, or day care, or within 1,000 feet of another cannabis dispensary.
Like Baltimore County, Frederick County recently passed Council Bill 23-21, which amended its zoning ordinance to allow cannabis dispensaries (medical and recreational) by right in commercial zoning districts. They are, however, prohibited from being located within 1,500 feet of an existing public or private school, park, library, playground, recreation center, or childcare center. In addition, they cannot be located within 1,500 feet of a property owned by the County and planned to be used for those identified uses. Lastly, a dispensary cannot be located within 1,000 feet of another cannabis dispensary.
In Anne Arundel County, under Council Bill 56-23, cannabis dispensaries (medical and recreational) are permitted, subject to conditions, in all commercial districts and industrial districts. The County requires that there is direct access to an arterial road, that “no loitering” signs be posted, that cannabis cannot be visible to the general public, and that there can be no onsite physician to write prescriptions for medical cannabis products.
Based on a review of their respective zoning codes, Howard County, Montgomery County and Baltimore City do not appear to have any specific regulations related to dispensaries (medical or recreational). Medical dispensaries have likely been permitted under the pharmacy use category in zoning districts that permit that use. Until they are updated, recreational dispensaries will likely be permitted under the same policy used for medical dispensaries. In Howard County, the County Council did pass a resolution in June 2023, CR-104-2023, creating a Cannabis Workgroup that will study, in part, required updates to the zoning regulations related to recreational use.
In Charles County, cannabis dispensaries have been permitted in most commercial districts under a specific medical cannabis dispensary use category. They are prohibited from being located within 1,000 feet of any school, day-care facility, substance abuse rehabilitation center, or any other cannabis dispensary. The County is currently considering a zoning regulation text amendment, ZTA-23-180, that would limit the number of dispensary licenses (medical and recreational) permitted per County Commissioner district to 3.
In Prince George’s County, medical cannabis dispensaries are permitted as a special exception in some commercial and mixed-use districts. There does not appear to be any regulations specifically addressing recreational cannabis dispensaries. Some members of the Prince George’s County council, however, are attempting to restrict the location of new dispensaries. Legislation was introduced in October that would have limited new cannabis dispensaries to industrial zones. The legislation failed, but there is still a strong desire among some council members to continue to introduce legislation that will limit their location.
To conclude, outside of the limited state law restrictions and the vague prohibition that a local jurisdiction can not “unduly burden” a cannabis business, localities have extensive zoning power to regulate the location of dispensaries. Right now, dispensaries are generally permitted in commercial districts either by right or with conditions. As each jurisdiction gauges the impact of this new use on their respective communities, zoning laws will likely be updated. If you are considering opening a dispensary in any jurisdiction in Maryland, a good first step is to contact the local zoning office and clarify what specific codes and use category applies.
As always, if you need real estate or land use support for your growing business, do not hesitate to reach out to Whiteford’s team of real estate, business, and land use attorneys for legal representation.
The information contained here is not intended to provide legal advice or opinion and should not be acted upon without consulting an attorney. Counsel should not be selected based on advertising materials, and we recommend that you conduct further investigation when seeking legal representation.