Chapter 16. Cannabis Business Owners
Regulation .01 Conditions of Ownership and Control.LinkCopy Citation
A.
An individual who holds any amount of ownership interest or control in a cannabis licensee shall be 21 years old or older.
B.
The requirement in §A of this regulation does not apply to beneficiaries of ownership interests held in a trust if:
(1)
The trustee is 21 years old or older; and
(2)
Ownership interests do not vest prior to the beneficiary’s 21st birthday.
C.
The Administration may force divestiture of an individual with ownership interest or control from the licensed business if they are convicted or plead 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.
D.
Transfers.
(1)
A person wishing to hold an ownership interest of greater than 5 percent or control in a cannabis license shall comply with the application requirements under Alcoholic Beverages and Cannabis Article, §36-502, Annotated Code of Maryland.
(2)
A license issued, regulated, or otherwise authorized under this subtitle shall only be transferred in accordance with Alcoholic Beverages and Cannabis Article, §36-503, Annotated Code of Maryland.
(3)
Applicants and transferees under this chapter shall submit to a criminal history record check in accordance with Alcoholic Beverages and Cannabis Article, §36-505, Annotated Code of Maryland.
Regulation .02 Disclosure of Ownership and Control.LinkCopy Citation
A.
Each licensee shall submit to the Administration a table of organization, ownership, and control in a manner designated by the Administration:
(1)
On or before July 1 of each year;
(2)
Within 10 business days of any change in ownership interest greater than 5 percent; and
(3)
Upon request by the Administration.
B.
The table of organization, ownership, and control shall identify the management structure, ownership, and control of the licensee, including but not limited to the:
(1)
Name of each owner or principal officer and any other individual or entity with the authority to control the licensee;
(2)
The office or position held, if any; and
(3)
The percentage of ownership interest, if any.
C.
The identification of ownership shall include:
(1)
The name and percentage of ownership interest of each individual or business entity with ownership of more than 5 percent of the voting shares of the entity, to the extent such information is known or contained in 13D or 13G Securities and Exchange Division filings; and
(2)
To the extent known, the names and percentage of interest of ownership of persons who are relatives of one another and who together exercise control over or own more than 10 percent of the voting shares of the entity.
D.
A licensee that is owned or controlled, in whole or in part, by another entity shall disclose to the Administration:
(1)
The relationship between the licensee and the parent or affiliate; and
(2)
Each owner, board member, or officer and any other individual with control or management authority over those entities owning or controlling the license.
E.
Any individual identified as having ownership or control of a license may not have other ownership interest that exceeds the limitations set forth in Alcoholic Beverages and Cannabis Article, §36-401(e), Annotated Code of Maryland.
Regulation .03 Annual Reports for Cannabis Business Owners.LinkCopy Citation
A.
Annual Report on Minority Owners and Employees.
(1)
On or before August 1 of each year, each licensee and registrant shall submit a report in a manner determined by the Administration in accordance with Alcoholic Beverages and Cannabis Article, §36-801(a), Annotated Code of Maryland.
(2)
Each licensee and registrant shall maintain the data required for the report in §A(1) of this regulation for a period of 5 years.
B.
The Administration may request an annual report regarding a licensee’s or registrant’s environmental resource consumption and waste generation, including but not limited to:
(1)
Energy and water usage; and
(2)
Green waste disposal.
C.
The Administration may require licensees to demonstrate progress toward the stated goals of the diversity plan on a quarterly basis for the first operational year of licensure, in a manner specified by the Administration.
Regulation .04 Mandatory Reporting of Legal Actions.LinkCopy Citation
A.
The required reporting under this regulation applies to a legal action whether in Maryland or another jurisdiction.
B.
Notification.
(1)
A licensee or its parent, affiliate, or any subsidiary shall notify and provide a description to the Administration within 30 days of any of the following events:
(a)
The filing of any administrative, civil, or criminal action against the licensee or its parent, affiliate, or subsidiary by any governmental entity, private entity, or individual;
(b)
The disposition of any administrative, civil, or criminal action against the licensee or its parent, affiliate, or subsidiary by any governmental entity, private entity, or individual, whether by judgment, final order, consent order, or other negotiated resolution; or
(c)
The filing for bankruptcy of the licensee or its parent, affiliate, or subsidiary, the entry of a court order for the placement into receivership, or the date of an assignment for the benefit of creditors.
(2)
An individual with ownership interest or control greater than 5 percent shall notify and provide a description to the Administration within 30 days of any of the following events:
(a)
The filing for bankruptcy of the licensee or its parent, affiliate, or subsidiary, the entry of a court order for the placement into receivership, or the date of an assignment for the benefit of creditors; or
(b)
An owner’s conviction of or plea of 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.
(3)
The notification and description of the event required under §B(1) and (2) of this regulation shall be provided to the Administration within 14 calendar days after receiving:
(a)
Proper service of process in accordance with the rules of civil or criminal procedure of a court of competent jurisdiction; or
(b)
Formal written notice in accordance with the administrative rules of an administrative agency with jurisdiction.
C.
The description under §B(3) of this regulation shall include the following:
(1)
Title and docket number;
(2)
Name and location of the court;
(3)
Names of the parties;
(4)
General nature and scope of the legal action; and
(5)
Any judgment, final order, consent order, or other negotiated resolution.
Regulation .05 Prohibited Acts.LinkCopy Citation
A.
A licensee may not transfer ownership of the license for the purpose of:
(1)
Improperly shielding the license or the value of the license from any judgement or liability; or
(2)
Furthering any action or plan of action that violates any State, local or federal law.
B.
Except as authorized under Alcoholic Beverages and Cannabis Article, Title 36, Annotated Code of Maryland, a licensee may not be:
(1)
A member of the General Assembly;
(2)
An employee of the Administration; or
(3)
Otherwise in violation of Alcoholic Beverages and Cannabis Article, §36-504, Annotated Code of Maryland.
C.
An individual, group of individuals or persons may not own multiple, non-majority or unreported shares or interests in a cannabis license unless every holding is a passive interest that:
(1)
Has an aggregate ownership interest of less than 5 percent; and
(2)
Does not have control over the license.
D.
Owners found in violation of this regulation by the Administration may be subject to any of the following sanctions:
(1)
Fine;
(2)
Suspension or revocation of the licensed business; or
(3)
Forced divestiture of the owner from the licensed business.
Chapter annotations
Authority: Alcoholic Beverages and Cannabis Article, §§36-202, 36-501, 36-502, 36-503, 36-504, and 36-801, Annotated Code of Maryland
History: Effective date:
History: Regulations .01—.05 adopted as an emergency provision effective July 1, 2023 (50:14 Md. R. 559); emergency status expired June 30, 2024
History: Regulations .01—.05 adopted as an emergency provision effective June 7, 2024 (51:14 Md. R. 676)
History: Regulations .01—.05 adopted effective July 22, 2024 (51:14 Md. R. 678)
History: Regulation .03 amended effective April 14, 2025 (52:7 Md. R. 324)