In this subtitle, “Division director” means the director of the Field Enforcement Division of the Office of the Executive Director.

There is an Alcohol, Tobacco, and Cannabis Commission.

The Commission consists of five members to be appointed by the Governor with the advice and consent of the Senate. The presiding officer of either House of the General Assembly may recommend to the Governor a list of individuals for appointment to the Commission. Of the Commission members: one shall be knowledgeable and experienced in public health matters; one shall be knowledgeable and experienced in law enforcement matters; one shall be knowledgeable and experienced in the alcoholic beverages industry; and two shall be members of the public who are knowledgeable and experienced in fiscal matters and shall have substantial experience: as an executive with fiduciary responsibilities in charge of a large organization or foundation; in an academic field relating to finance or economics; or as an accountant, an economist, or a financial analyst. In addition to the members appointed under paragraph (3) of this subsection, the Secretary of Health and the Secretary of State Police, or their designees, may participate in the Commission as ex officio nonvoting members. At the time of appointment, each member of the Commission shall be: at least 25 years old; a resident of the State who has resided in the State for at least 5 years; a qualified voter of the State; and an individual who has not been convicted of or granted probation before judgment for a serious crime or a crime that involves moral turpitude. The term of a member is 5 years. The terms of members are staggered as required by the terms provided for members of the Commission on June 30, 2020. At the end of a term, a member continues to serve until a successor is appointed and qualifies. A member who is appointed after a term has begun serves only for the rest of the term and until a successor is appointed and qualifies. A member may not serve for more than two full terms. Subject to the hearing requirements of this subsection, the Governor may remove a member for cause. Before the Governor removes a member, the Governor shall give the member notice and an opportunity for a public hearing.

A member of the Commission may not: have a direct or indirect financial interest, ownership, or management, including holding any stocks, bonds, or other similar financial interests, in the alcohol, tobacco, or cannabis industries; have an official relationship to a person who holds a license or permit under this article or Title 16, Title 16.5, Title 16.7, or Title 16.9 of the Business Regulation Article; be an elected official; receive or share in, directly or indirectly, the receipts or proceeds of any activities conducted in the alcohol, tobacco, or cannabis industries; have a beneficial interest in any contract for the manufacture or sale of any device or product or the provision of any independent consulting services in connection with a holder of a license or permit issued under this article or Title 16, Title 16.5, Title 16.7, or Title 16.9 of the Business Regulation Article; or accept a contribution of money or property worth at least $100 from an entity or individual associated with the alcohol, tobacco, or cannabis industries with respect to the regulation of alcohol, tobacco, or cannabis. A member of the Commission shall file a financial disclosure statement with the State Ethics Commission in accordance with Title 5, Subtitle 6 of the General Provisions Article.

From among its members, the Commission annually shall elect a chair.

A majority of the full authorized membership of the Commission is a quorum. The Commission shall meet monthly at the times and places that the Commission determines. The secretary of the Commission promptly shall send the Governor a certified copy of the minutes of each meeting of the Commission. The minutes shall include a copy of each regulation that is adopted. Each member of the Commission is entitled to reimbursement for expenses under the Standard State Travel Regulations, as provided in the budget of the Commission. With the advice of the Commission, the Executive Director may employ staff in accordance with the State budget. The staff of the Commission is in the State Personnel Management System.

The Commission has the powers and duties set forth in this section. The Commission shall: educate the public, by resource sharing and serving as an information clearinghouse, on such topics as: recent increases in alcohol content for popular beer and other beverages; the proper limits of drinking for adults; the adverse consequences of surpassing those limits; parental or adult responsibility for serving alcohol to underage individuals; and comparable topics relating to smoking, vaping, tobacco, other tobacco products, electronic nicotine delivery systems, cannabis, and cannabis products; and subject to federal approval, ensure that all alcoholic beverages sold in the State with an alcohol content exceeding 4.5% by volume bear a large and conspicuous label stating the percentage of alcohol content. The Commission shall conduct studies of: the operation and administration of similar laws in other states or countries; and federal laws that may affect the operation of the alcohol, tobacco, or cannabis industries, the literature on those industries, and the reaction of residents of the State to existing and potential features of those industries. The Commission shall submit to the Governor and, in accordance with § 2–1257 of the State Government Article, the General Assembly the studies required under this subsection.

The Commission shall develop best practices for: the dedication of a minimum effective portion of the budget of a local licensing board to administrative enforcement activities, such as inspections, compliance checks, overservice, operations, and trade practice violations; the carrying out of compliance checks for alcoholic beverages licenses, in which each license is checked at least once a year; the development of guidelines for the minimum capacity of inspections carried out by inspectors of local licensing boards, based on the number and type of licensed outlets in the licensing jurisdiction; ensuring that alcoholic beverages inspections be based on data such as the violation history of the license holder, and calls for emergency assistance, emergency medical service, or nonemergency service, so that resources are being allocated based on where the greatest need is; the reporting of aggregate data between local police and local licensing boards; the development of mandatory State–provided training for liquor inspectors; reporting by the State to the affected local licensing board of a State–issued license or permit within 10 days after the State receives an application; the development of a public health impact statement for all changes to the State alcoholic beverages laws; and ensuring that: all license holders, managers, and servers receive certification from an approved alcohol awareness program; and at least one employee who is certified in an alcohol awareness program be on the licensed premises at all times when alcoholic beverages are served.

With the advice and consent of the Senate, the Governor shall appoint an Executive Director of the Commission. The Executive Director serves at the pleasure of the Governor. The Executive Director shall: have the training and experience, including knowledge of the Maryland alcohol, tobacco, and cannabis regulatory system, that is needed to direct the work of the Commission; and devote full time to the duties of office and may not engage in another profession or occupation. The Executive Director may be a sworn police officer with the powers granted to an officer or employee of the Field Enforcement Division under § 1–313 of this subtitle. The Executive Director is entitled to the salary provided in the State budget.

In this section, “Advisory Board” means the Advisory Board on Medical and Adult–Use Cannabis. There is an Advisory Board on Medical and Adult–Use Cannabis. The Advisory Board shall: consider all matters submitted to it by the Office of Social Equity, the Governor, the Maryland Cannabis Administration, or the General Assembly; and study and make recommendations on: the impact on the legal medical and adult–use cannabis industry in the State if the federal government: reschedules cannabis from Schedule I to Schedule III under the federal Controlled Substances Act; or removes cannabis from the list of controlled substances under the federal Controlled Substances Act; measures to protect and promote the legal medical and adult–use cannabis industry in the State if cannabis is: rescheduled from Schedule I to Schedule III; or removed from the federal Controlled Substances Act; measures to enable standard and micro cannabis licensees and small businesses to compete in interstate commerce related to the cultivation, manufacture, distribution, and testing of cannabis and cannabis products; methods to ensure that there is an adequate supply of affordable cannabis and cannabis products for qualifying patients, including cannabis and cannabis products containing varying levels of potency; and methods to assist social equity applicants, social equity licensees, and small, minority, and women–owned businesses to: access funds for operating or capital expenses associated with a business participating in the medical and adult–use cannabis industry; obtain financing from a lender, as defined in § 36–1401 of this article; and partner with operational cannabis licensees in ways that the social equity applicants or licensees or small, minority, or women–owned businesses retain ownership and control of the licenses and businesses. The Advisory Board consists of the following members, appointed by the Governor with the advice and consent of the Senate: three members that have substantial experience in one or more of the following: cannabis law, science, or policy; public health or health care; agriculture; finance; or addiction treatment; one academic researcher with at least 5 years of experience in social or health equity; one representative of an independent testing laboratory registered under § 36–408 of this article; two representatives who hold a standard grower license under § 36–401 of this article; two representatives who hold a standard processor license under § 36–401 of this article; two representatives who hold a standard dispensary license under § 36–401 of this article; two representatives who hold a micro grower license under § 36–401 of this article; two representatives who hold a micro processor license under § 36–401 of this article; two representatives who hold a micro dispensary license under § 36–401 of this article; one representative who holds an incubator space license under § 36–401 of this article; one representative who holds an on–site consumption license under § 36–401 of this article; one representative of an organization that advocates on behalf of patients who engage in the medical use of cannabis; one representative of an organization that advocates on behalf of consumers who engage in the adult use of cannabis; and one health care provider who is registered to certify patients to obtain medical cannabis under § 36–301 of this article. The Advisory Board shall elect a chair from among its members. The President of the Senate and the Speaker of the House may recommend to the Governor a list of individuals for appointment to the Advisory Board. The term of a member of the Advisory Board is 4 years. At the end of a term, a member continues to serve until a successor is appointed and qualifies. An appointed member may not serve more than two full terms. The positions for members appointed under subsection (d)(1)(vii) through (xi) of this section become effective when the first licenses are issued under those respective license types. An appointed member of the Advisory Board must be: at least 25 years old; a resident of the State who has resided in the State for at least the immediately preceding 5 years before the appointment; and a registered voter of the State. The Advisory Board shall establish at least two subcommittees to focus on medical and adult–use cannabis. To the extent practicable and consistent with federal and State law, the membership of the Advisory Board shall reflect the racial, ethnic, and gender diversity of the State. The Maryland Cannabis Administration shall provide staff for the Advisory Board.

The Executive Director and all employees in the Office of the Executive Director may not accept a contribution of money or property worth at least $100 from an entity or individual associated with the alcohol, tobacco, or cannabis industries with respect to regulation of alcohol, tobacco, or cannabis.

The Executive Director shall adopt regulations to discharge the duties under: this article; and Titles 16, 16.5, 16.7, and 16.9 of the Business Regulation Article. The Executive Director may adopt regulations regarding: labeling and advertising similar to the regulations adopted by the Alcohol and Tobacco Tax and Trade Bureau of the United States Department of the Treasury; nature, form, and capacity of containers; credit sales; records to be kept by license holders and others engaged in the business; the amount of deposit on returnable beer containers that manufacturers and wholesalers of beer charge and collect; and any other subject the Executive Director considers necessary for the proper administration of the duties of the Executive Director under this article, Title 16, Title 16.5, Title 16.7, or Title 16.9 of the Business Regulation Article, or the provisions of the Tax – General Article relating to the alcoholic beverage tax or the tobacco tax. Any violation of a regulation adopted by the Executive Director under this article, Title 16, Title 16.5, Title 16.7, or Title 16.9 of the Business Regulation Article, or the provisions of the Tax – General Article relating to the alcoholic beverage tax or the tobacco tax is grounds to revoke or suspend a license. The violator is subject to the penalties provided under § 6–402(a) of this article.

By regulation, the Executive Director may: establish or prohibit the maximum discounts that may be allowed by a manufacturer, wholesaler, or nonresident winery permit holder in the sale and distribution of wine and liquor; or prohibit the giving of discounts by a manufacturer, wholesaler, or nonresident winery permit holder in the sale and distribution of wine and liquor.

There is a Field Enforcement Division in the Office of the Executive Director. The Field Enforcement Division may employ officers and employees as provided in the State budget. The officers and employees of the Field Enforcement Division: shall be sworn police officers; shall have the powers, duties, and responsibilities of peace officers to enforce the provisions of this article relating to: the unlawful importation of alcoholic beverages, tobacco, and cannabis into the State; the unlawful manufacture of alcoholic beverages, tobacco, and cannabis in the State; the transportation and distribution throughout the State of alcoholic beverages, tobacco, and cannabis that are manufactured illegally and on which any alcoholic beverages taxes, tobacco taxes, or cannabis taxes imposed by the State are due and unpaid; and the manufacture, sale, barter, transportation, distribution, or other form of owning, handling, or dispersing alcoholic beverages, tobacco, or cannabis by any person not licensed or authorized under this article, provisions of the Tax – General Article relating to alcoholic beverages, tobacco, or cannabis, or provisions of the Business Regulation Article relating to alcoholic beverages, tobacco, or cannabis; may issue a citation or other charging document to a person who has committed a violation of: section 10–108 of the Criminal Law Article; Title 21, Subtitle 2D of the Health – General Article; Title 21, Subtitle 2E of the Health – General Article; and Title 21, Subtitle 2F of the Health – General Article; and may make cooperative arrangements for and work and cooperate with the Office of the Comptroller, local State’s Attorneys, sheriffs, bailiffs, police, and other prosecuting and peace officers to enforce this article. The Field Enforcement Division: shall consult with and advise the local State’s Attorneys and other law enforcement officials and police officers regarding enforcement problems in their respective jurisdictions; and may recommend changes to improve the administration of this article, provisions of the Tax – General Article relating to alcoholic beverages, tobacco, and cannabis, and provisions of the Business Regulation Article relating to tobacco.

The Executive Director may delegate authority under this article, provisions of the Tax – General Article relating to alcoholic beverages and tobacco, and provisions of the Business Regulation Article relating to tobacco to the Division director or a designee to issue or refuse to issue licenses and permits.

Except as provided in subsection (b) of this section, the Executive Director may delegate authority to conduct hearings on violations of this article or of any regulations adopted under this article, the provisions of the Tax – General Article relating to alcoholic beverages or tobacco, or the provisions of the Business Regulation Article relating to tobacco to the Division director or any other employee of the Executive Director’s office. The Division director or any other employee of the Executive Director’s office delegated authority to conduct hearings under subsection (a) of this section: may not impose a penalty provided for under this article or a provision of the Tax – General Article relating to alcoholic beverages; and shall report the findings and recommendations to the Executive Director to take the action that the Executive Director considers appropriate.

To provide a basis for annual comparison of the scope of the alcoholic beverages industry in the State and the consumption habits of residents of the State, the Executive Director shall submit to the Governor and, in accordance with § 2–1257 of the State Government Article, to the General Assembly, an annual report on or before December 1 of each year that includes statistical information on the alcoholic beverages business in the State that the Executive Director believes to be of interest to the public and the industry.

The Executive Director shall: maintain a record of: each license issued or approved under this article and Titles 16, 16.5, 16.7, and 16.9 of the Business Regulation Article; and any revocation, suspension, or cancellation of a license and any restriction imposed on a license with a brief explanation of the reason for the action; and allow any person to inspect the records at the Office of the Executive Director during regular business hours. The records of licenses required under subsection (a) of this section and any indices or dockets created to maintain the records: shall be retained for the later to occur of: 3 years after the date of the last record entry; or the date on which all audit requirements have been complied with; and may be destroyed after: the retention period in item (1) of this subsection has expired; and Title 10, Subtitle 6, Part III of the State Government Article has been complied with.

The Executive Director may: under § 6–202 of this article, inspect and search a building, vehicle, or premises where alcoholic beverages are authorized to be kept, transported, manufactured, or sold; under § 6–203 of this article, use certain equipment and other means to measure the quantity and quality of alcoholic beverages; and under § 6–204 of this article, issue summonses for witnesses for hearings and inquiries.

The Executive Director shall enforce the provisions of this article and provisions of the Tax – General Article relating to alcoholic beverages applicable to: the purchase or importation of alcoholic beverages by a department of liquor control, a liquor control board, or the Alcohol Beverage Services for Montgomery County; and the sale of alcoholic beverages to a wholesaler or retail dealer by a department of liquor control, a liquor control board, or the Alcohol Beverage Services for Montgomery County.

The Executive Director may: investigate the manufacture, sale, purchase, use, and transportation of industrial alcohol unfit for beverage use to the extent reasonably necessary to prevent conversion into an alcoholic beverage fit for consumption; and request information and assistance from other administrative units of the State, county, and municipal governments, county and municipal police departments, and all prosecuting officers as considered necessary by the Executive Director to carry out this article and provisions of the Tax – General Article relating to alcoholic beverages.

In order to increase efficiency and accuracy in the performance of their respective duties and responsibilities under this article and other laws relating to alcohol and tobacco, the Commission and the Comptroller shall: cooperate and share information and personnel in investigations of licensed premises and other locations and materials relating to the enforcement of the alcohol and tobacco laws of the State; cooperate and share information and personnel in other matters relating to the manufacture, processing, importation, taxation, sale, and service of alcohol and tobacco in the State; and enter into a memorandum of understanding for cooperative activities in inspections and other enforcement activities relating to the alcohol and tobacco laws of the State. The Commission may enter into memoranda of understanding and other cooperative arrangements with federal, State, and local governmental units in carrying out this article and other alcohol and tobacco laws of the State in the interest of reducing duplication of efforts and reducing the overall costs of administration of inspection and enforcement programs to the State. The Executive Director may also enter into memoranda of understanding and other cooperative arrangements with federal, State, and local governmental units to address operational matters and efficiencies in carrying out this article and other alcohol and tobacco laws of the State.

In this section the following words have the meanings indicated. “Administration” has the meaning stated in § 36–101 of this article. “Cannabis licensee” has the meaning stated in § 36–101 of this article. “Grant Program” means the Social Equity Partnership Grant Program. “Office” means the Office of Social Equity. “Qualifying partnership” means a meaningful partnership between an operational cannabis licensee and a social equity licensee that: supports or advises the social equity licensee; and is authorized by the Administration. “Qualifying partnership” includes a partnership through which the operational cannabis licensee provides any of the following to a social equity licensee: training; mentorship; or shared commercial space or equipment. “Social equity licensee” has the meaning stated in § 36–101 of this article. There is a Social Equity Partnership Grant Program in the Office. The purpose of the Grant Program is to promote qualifying partnerships between operational cannabis licensees and social equity licensees. The Office shall implement and administer the Grant Program, including by clearly defining the parameters of a qualifying partnership. Subject to paragraph (3) of this subsection, the Office has discretion to approve, deny, or revoke qualifying partnerships. The Office may approve qualifying partnerships where a cost or other fee is imposed by an operational cannabis licensee on a social equity licensee if the cost or other fee is substantially reduced from the market value. Costs or other fees under subparagraph (i) of this paragraph may include charges for the rent of facilities or equipment. The Office shall award grants to operational cannabis licensees that have qualifying partnerships with a social equity licensee. Grant amounts shall be based on the nature of the qualifying partnership between the social equity licensee and the operational cannabis licensee. If an operational cannabis licensee has a license that was converted by the Administration under § 36–401(b)(1)(ii) of this article, the total amount of grants issued by the Office under this section to the licensee may not exceed: the cost of the license conversion fee that was paid by the licensee; or $250,000 per year per qualifying partnership. The Office may require a grant recipient that fails to fulfill the requirements of the grant to return all or part of the grant to the Grant Program. For fiscal year 2025 and each fiscal year thereafter, the Governor shall include in the annual budget bill an appropriation of $5,000,000 for the Grant Program, utilizing the Cannabis Regulation and Enforcement Fund established under § 36–206 of this article. The Office shall adopt regulations to: implement the provisions of this section; administer the Grant Program; establish eligibility and grant application requirements; establish a process for reviewing grant applications and awarding grants to operational cannabis licensees; and specify criteria and procedures to monitor eligibility for the grants authorized under this section.

In this section the following words have the meanings indicated. “Advertise” includes packaging, labeling, or electronic communication. “Retailer” means a person that: sells, prepares, or maintains unauthorized consumable products; or advertises, represents, or holds itself out as selling, preparing, or maintaining unauthorized consumable products. “Retailer” includes the following persons, if the person otherwise meets the definition established under subparagraph (i) of this paragraph: a manufacturer; a wholesaler; a store; a restaurant; a hotel; a catering facility; a camp; a bakery; a delicatessen; a supermarket; a grocery store; a convenience store; a gas station; a food company; and a drink company. “Unauthorized consumable product” means: a tianeptine product as defined in § 21–2D–01 of the Health – General Article; a kratom product, as defined in § 21–2E–01 of the Health – General Article, that does not comply with Title 21, Subtitle 2E of the Health – General Article; a phenibut product, as defined in § 21–2F–01 of the Health – General Article, that does not comply with Title 21, Subtitle 2F of the Health – General Article; and a consumable product that contains a poisonous or deleterious substance in violation of a rule or regulation adopted under § 21–239(c) of the Health – General Article and is designated by the Secretary of Health for enforcement by the Executive Director. A retailer may not distribute, sell, expose for sale, or advertise for sale an unauthorized consumable product. The Executive Director may seize, confiscate, or destroy: an unauthorized consumable product that is offered, advertised, or displayed for sale to a consumer in the State; and a product that is labeled, advertised, represented, or offered for sale as containing: 7–hydroxymitragynine in an amount that: for a kratom product, is greater than the amount permitted under § 21–2E–02(b)(1)(iii) of the Health – General Article; or is greater than 1 milligram per serving; tianeptine sodium; tianeptine sulfate; or beta–phenyl–gamma–aminobutyric acid HCl. A product seized under subsection (c) of this section is presumed to be contraband and subject to summary forfeiture unless the person from whom the product was seized demonstrates the product is: if applicable, in compliance with Title 21, Subtitle 2E of the Health – General Article; or authorized for sale and distribution for the purposes of human consumption by: the Maryland Department of Health; or the U.S. Food and Drug Administration. A retailer that violates subsection (b) of this section is guilty of a misdemeanor and on conviction is subject to a fine not exceeding $5,000. In addition to the penalties established under this section: the District Court may order the Executive Director, the Comptroller, or the applicable local licensing board or commission to: suspend or revoke a license issued under this article or Title 16, 16.5, 16.7, or 17 of the Business Regulation Article; and dispose of or destroy an unauthorized consumable product seized under subsection (c) of this section; and a retailer that violates this section is liable for civil damages sustained by an individual that result from the violation.