A cannabis licensee, including a cannabis licensee whose license was converted in accordance with Alcoholic Beverages and Cannabis Article, §36-401, Annotated Code of Maryland, is not transferable except as provided under Alcoholic Beverages and Cannabis Article, §36-503, Annotated Code of Maryland. If a proposed transfer is for less than 5 percent of a cannabis licensee and the proposed transfer will not result in the transferee holding 5 percent or more of the licensee, then the proposed transfer does not require approval by the Administration. The Administration may approve a transfer or assignment of ownership if: The Administration receives notice of the intent of the owner of the interest, or of the estate of the owner of the interest, to transfer or assign an ownership interest in a license to another party, in a form prescribed by the Administration; The proposed transfer does not violate Alcoholic Beverages and Cannabis Article, Title 36, Annotated Code of Maryland; The transferee has paid the required fee specified in COMAR 14.17.21; and The transferee has provided criminal history record and financial information to the Administration. The Administration shall deny transfer of an interest for any proposed transferee: If the transfer violates COMAR 14.17.16; If the transfer would convey a controlling interest in the license prior to the cannabis licensee being licensed and operational for a period of at least 5 years, and is not proposed due to death, disability, incapacity, bankruptcy, or receivership in accordance with a lending agreement of a cannabis licensee or court order; or If, prior to the cannabis licensee being licensed and operational for a period of at least 5 years, the transfer would convey to the transferee the right or authority to obtain a controlling interest in the license at a later date. The Administration may deny transfer of an interest for any proposed transferee if the: Transferee or an individual with ownership or control of the transferee has been convicted of or pleaded nolo contendere to a crime involving moral turpitude, whether or not any appeal or other proceeding is pending to have the conviction or plea set aside; Payment of taxes due in any jurisdiction is in arrears. The Administration may deny transfer of a controlling interest in a license or in an ownership interest of 5 percent or more if the Administration finds good cause to deny the proposed transfer. Any individual or entity identified as having ownership or control of a license may not hold an ownership interest that exceeds the limitations set forth in Alcoholic Beverages and Cannabis Article, §36-401(e), Annotated Code of Maryland. If the Administration approves a transfer of an ownership interest of a license and subsequently the Administration finds that such a transfer violates State, local, or federal law, the Administration may: Issue a fine against any parties involved in the transfer; Declare the transfer void; and Rescind the license. Prior to the transfer, the licensee shall conduct a full inventory of all cannabis and cannabis products, in a manner prescribed by the Administration. Employee Incentive Programs. In this section, the term “incentive unit” means a unit of ownership in the licensee or its parent, subsidiary, or affiliate such as stock or limited liability company membership, issued to an individual as part of a licensee’s employee incentive program or other compensation. A licensee may issue employee incentive units as part of an employee compensation plan. A licensee shall: Establish a detailed employee incentive plan for each individual to whom it intends to issue incentive units and issue incentive units in accordance with the plan; and Upon request, provide a copy of the plan in §J(3)(a) of this regulation, in a manner prescribed by the Administration. A licensee may not issue employee incentive units in a way that violates: This regulation; This chapter; This subtitle; Alcoholic Beverages and Cannabis Article, Title 36, Annotated Code of Maryland. Incentive units issued to employees under this section may not: Exceed 5 percent total ownership to any one individual; or Change the control structure of the license. In the annual disclosure of ownership and control report required by COMAR 14.17.16.02, a licensee shall disclose any employee incentive unit issuances or transfers that have occurred since the date of the licensee's last annual disclosure submission.