During the 2020 legislative session, I, together with my Senate Champion, Sen. Jill Carter, jointly introduced HB 1449\SB 1012 “Health – Medical Cannabis Reauthorization Act.” The intent of the Act was to correct several structural deficiencies in Maryland’s Medical Cannabis Program by promoting fairness and equity through our celebrated “Free Market System.”
After spending years discussing the lack of diversity in the Maryland program with applicants and constituents, coupled with the disasters from the application process in 2019, in which most of the applicants had significant minority-equity ownership, we decided enough was enough.
The Act would have given Stage 1 Pre-Approvals to all 2019 applicants that met a minimum score in their applications. It is important to note that in the original application process and the one for 2019, the scores among the applicants that eventually won and lost were within fractions of a point. All of those entities should have been given the same opportunity to be successful or fail in this soon to be multi-billion-dollar industry for the state.
When the General Assembly first passed legislation to create the program, there were many disagreements as to how many initial licenses, and which type, to authorize. Compromises were made to come up with 15 licenses for growers, an unlimited number of processors and a limit of two dispensaries per Senate district.
Because the number of grower licenses was not based on any market analysis, the original legislation called for a supply and demand study to be conducted to determine the actual number of growers needed for the future. The 2-year window would allow the initial growers and processors time to get their businesses up and running before they would face competition. Unfortunately, that study was never conducted, and the industry has successfully lobbied over the years to artificially keep the number of growers to patients as the worst ratio in the nation.
Our patients pay more for medical cannabis than many other states due to these monopolistic practices. To make matters worse, in 2018, we inadvertently created even more monopolies by allowing the growers and processors to acquire up to three additional dispensaries. This put small, independent dispensaries in a perilous condition: Sell out to the new conglomerates or go out of business due to a lack of product supply from them.
Del. Julian Ivey and Sen. Joanne Benson tried to correct this wrong with HB 1317/SB 953 – “Medical Cannabis – Dispensary Grower-Processor License,” but that bill also ran into the same problems we experienced with the Act.
Let us talk about those problems. No Republicans signed onto the Act and only one courageous soul co-sponsored HB 1317. In our opinion, they have abdicated their own espoused conservative values by opposing a free market solution to the 2019 application problem and the industry as a whole.
The governor must own “his” medical cannabis commission. With one exception, he has appointed every member of this commission, including the chair, and all of the executive staff positions have been filled under his administration.
We credit the governor for commissioning the 2017 diversity study that found: “The evidence supports the conclusion that affirmative intervention is still needed to dismantle the exclusion of racial and gender groups from the private sector market. Maryland will likely be a passive participant in a discriminatory marketplace if it fails to continue to address the issue. Moreover, … there remain large and statistically significant disparities between the availability of M/WBEs and their utilization on State contracts despite the State’s aggressive current efforts. These results support the need for continued remedial action”
We agree and ask the governor to take leadership within his party to encourage and support the reforms we put forward it in the Act as well as the work of Del. Ivey and Sen. Benson. The time to act is NOW!
There are myriad legal challenges to the 2019 application process at both the state and federal level. We believe the courts may be waiting for us to create legislative solutions to address many of the problems that have been identified over the past several years. We have seen the pitfalls of limiting the number of licenses in the alcohol industry that has led to corruption, and unfortunately, we have seen some of those same occurrences in the medical cannabis program. A free market approach, without limits on the number of businesses, would mitigate the circumstances in which favoritism and bad actors come into play.
Lastly, we would encourage all stakeholders to acquaint themselves with Pigford v. Glickman – a class action lawsuit against the United States Department of Agriculture, alleging racial discrimination against African-American farmers in its allocation of farm loans and assistance between 1981 and 1996.
We cannot let this moment pass without implementing policies that create real change. Fixing Maryland’s broken medical cannabis industry and promoting fairness and equity has to be one of our goals as we move forward to a more inclusive society in all facets of American life.
— DARRYL BARNES
The writer, a Democrat, represents Prince George’s County’s 25th District in the Maryland House of Delegates and is chairman of the Legislative Black Caucus.