HB 32
Department of Legislative Services
Maryland General Assembly
2021 Session
FISCAL AND POLICY NOTE
First Reader - Revised
House Bill 32 (Delegate J. Lewis)
Judiciary and Health and Government
Operations
Cannabis - Legalization and Regulation (Inclusion, Restoration, and
Rehabilitation Act of 2021)
This bill generally legalizes marijuana (which is renamed cannabis) for individuals at least
age 21. Among other things, the bill (1) establishes a regulatory and taxation framework
for cannabis establishments within the Alcohol and Tobacco Commission; (2) establishes
provisions related to social equity in the legal cannabis industry; and (3) establishes a
process for dismissal of or postconviction relief for marijuana-related offenses and
expungement of the dispositions of marijuana-related charges.
Fiscal Summary
State Effect: General fund and special fund revenues increase significantly in FY 2022,
2023, and 2025 from dual license fees. Special fund revenues increase further beginning in
FY 2023 from taxes, other license fees, and civil penalties for noncompliance by licensees.
General fund revenues also (1) increase beginning in FY 2023 from a required distribution
from the Cannabis Regulation Fund and (2) decrease minimally beginning in FY 2022 from
the bill’s changes to existing penalties and expungement-related filings. General/special
fund expenditures increase significantly in FY 2022 for multiple agencies to implement the
bill; future year expenditures are generally assumed to be covered with special funds. Other
effects on general fund and special fund finances are described below.
Local Effect: Potential significant increase in local revenues and expenditures to
implement the bill’s requirements. Potential minimal decrease in local incarceration and
prosecution-related expenditures.
Small Business Effect: Meaningful.
 Analysis
Bill Summary: Among other things, the bill (1) renames marijuana as “cannabis”;
(2) generally legalizes a “personal use amount” of cannabis for individuals at least age 21;
(3) requires expungement, dismissal, or release in specified circumstances and authorizes
expungement or resentencing in other specified circumstances for marijuana-related
offenses; (4) requires the Alcohol and Tobacco Commission to adopt regulations to
implement the bill; (5) establishes the Office of Social Equity within the commission with
specified responsibilities; (6) establishes multiple special funds for the purpose of promoting
inclusion in the legal cannabis industry; (7) establishes a licensing framework; (8) authorizes
a “locality” to establish its own ordinances, with specified limitations; (9) establishes the
Cannabis Regulation Fund, a special fund consisting of specified fees and taxes,
administered by the commission and distributed as specified; and (10) establishes a an excise
tax and a sales and use tax applicable to the legal cannabis industry.
Cannabis – Definition
The bill repeals the definition of “marijuana” and replaces the term marijuana with
“cannabis” throughout. “Cannabis” is defined as the plant Cannabis Sativa L. and any part
of the plant, including all derivatives, extracts, cannabinoids, isomers, acids, salts, and salts
of isomers, whether growing or not, with a delta-9 tetrahydrocannabinol (THC)
concentration greater than 0.3% on a dry weight basis. “Cannabis” does not include hemp
as defined in the Agriculture Article.
Lawful Acts – Generally
Generally, actions related to cannabis are lawful in the State, as long as they are in
accordance with the bill. Specifically, individuals who are at least age 21 may:
 possess, consume, grow, use, process, manufacture, purchase, or transport up to the
personal use amount of cannabis;
 transfer up to the personal use amount of cannabis to an individual person at least
age 21;
 control property where lawful actions related to cannabis take place;
 assist an individual who is at least age 21 with any lawful actions related to cannabis;
or
 manufacture, possess, purchase, distribute, or sell cannabis accessories to an
individual who is at least age 21.
“Personal use amount” means (1) up to two ounces of cannabis; (2) up to 15 grams of
concentrated cannabis; (3) cannabis products containing up to 1,500 milligrams of THC;
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(4) up to six cannabis plants; or (5) the amount of cannabis produced by a person’s cannabis
plants, as long as any amounts of cannabis in excess of what is otherwise allowed is
processed and stored in a secure location, as specified.
Civil and Criminal Penalties
The bill repeals and alters several existing penalty provisions applicable to the illegal use
of marijuana. Exhibit 1 contains information on the maximum penalties established by the
bill for the possession of more than the personal use amount of cannabis by individuals at
least age 21 and possession of cannabis for individuals who are underage (at least age 18,
but younger than age 21).
Exhibit 1
Civil and Criminal Penalties for Possession of Cannabis under the Bill
Offense Offense Type Maximum Penalty
Possession of more than the Civil $250 fine or 16 hours of
personal use amount and up to community service*
double the personal use amount for
individuals at least age 21
Possession of more than double the Criminal Six months imprisonment
personal use amount for individuals Misdemeanor and/or $1,000 fine
at least age 21
First offense for possession of up to Civil $100 fine or 6 hours of
the personal use amount for community service*
underage individuals
Second offense for possession of up Civil $250 fine or 16 hours of
to the personal use amount for community service*
underage individuals
Third or subsequent offense for Civil $500 fine or 32 hours of
possession of up to the personal use community service*
amount for underage individuals
Possession of more than the Criminal Six months imprisonment
personal use amount for underage Misdemeanor and/or $1,000 fine
individuals
* A person may request, and the court must grant, community service in lieu of the fine.
Source: Department of Legislative Services
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Smoking in Public: It is a civil offense for a person to smoke cannabis in a public place as
defined in the Health-General Article. Violators are subject to a maximum penalty of a
$50 fine or five hours of community service (rather than a $500 fine under current law for
smoking marijuana in a public place). A person at least age 21 may prepay the fine, while
an underage person must be summoned for trial.
Cannabis Cultivation: A person who cultivates cannabis must (1) cultivate cannabis in a
location outside of public view; (2) take reasonable precautions, as specified, to ensure the
plants are secure from unauthorized access and access by an underage person; and (3) only
cultivate cannabis on property the cultivator lawfully possesses or with the consent of the
property’s lawful possessor. A person who violates these provisions is guilty of a civil
offense and subject to a maximum fine of $750 or 50 hours of community service. A person
at least age 21 may prepay the fine, while an underage person must be summoned for trial.
Sale or Manufacture of Cannabis Accessories: A person may not manufacture or sell
cannabis accessories that violate health and safety regulations as adopted by the
commission. A person who violates this prohibition is (1) for a first violation, guilty of a
civil offense and subject to a maximum fine of $1,000 and (2) for a second or subsequent
violation, guilty of a misdemeanor and subject to a penalty of imprisonment for up to
180 days and/or a $5,000 maximum fine.
Cannabis – Obtaining for or Furnishing Underage Consumption: As under current law
for alcoholic beverages, individuals may not (1) knowingly obtain or attempt to obtain
cannabis, including through misrepresentation of a person’s age, or (2) furnish cannabis or
cannabis accessories or allow consumption of cannabis by an underage person, with the
existing limited exceptions for immediate family members and religious ceremonies.
Penalties are as specified under current law for such offenses related to alcoholic
beverages.
Community Service in Lieu of Fines: For specified civil offenses, a person may request,
and the court must grant, community service in lieu of a fine. The Chief Judge of the
District Court must establish procedures for individuals to request and be granted
community service in lieu of a fine.
Marijuana Paraphernalia Repeal: The definition of “drug paraphernalia” is altered to
specifically exclude cannabis from the specified items that when used with other controlled
dangerous substances would constitute paraphernalia. “Cannabis accessories,” as defined
under the bill, are also excluded from the definition of “drug paraphernalia.” As such, the
bill repeals the penalty provisions for possession of drug paraphernalia related to the use
or possession of marijuana (a maximum of imprisonment for one year and/or a $1,000 fine
under current law). The bill also repeals the list of drug paraphernalia examples that can be
used to ingest or inhale a controlled dangerous substance (CDS) into the human body.
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Pretrial Release, Parole, and Probation: It is not a violation of pretrial release, parole, or
probation to engage in any of the specified lawful acts pertaining to cannabis or to test
positive for cannabis ingestion unless the court or the Maryland Parole Commission makes
a specific finding that an individual’s use could create a danger to self or others.
Dismissal of Pending Charges and Post-conviction Proceedings
Automatic Expungement: “Automatic expungement” is defined as an expungement that
occurs without the filing of a petition or payment of a fee by the person who is the subject
of the records to be expunged. All court and police records related to any disposition of a
charge for possession of cannabis that does not exceed the personal use amount entered
before the bill’s effective date must be automatically expunged. Cases where possession of
cannabis is the only charge must be expunged within one year of the bill’s effective date,
while cases where the charge for possession of cannabis involves one or more other crimes
must be expunged within two years of the bill’s effective date. Automatic expungements
also apply to dispositions entered on or after the bill’s effective date for (1) criminal charges
of possession involving an amount of cannabis that does not exceed the personal use
amount; (2) civil charges for possession of cannabis; and (3) civil charges for smoking
cannabis in public. Such ongoing automatic expungements must be initiated within
one year of the disposition and completed within one year and 90 days of the disposition.
Expungement Applications: An individual previously convicted for the possession,
cultivation, processing, or sale of cannabis who is not entitled to automatic expungement
who is not incarcerated or under supervision may present an application for expungement
that the court must grant if doing so would be in the interest of justice. Any individual
petitioning for this type of expungement as of January 1, 2023, is eligible for representation
by the Office of the Public Defender (OPD).
Retroactive Legalization: The bill establishes that the possession and cultivation of a
personal use amount of cannabis by persons at least age 21, as specified in the bill, is
retroactive.
Dismissal of Pending Charges: All charges pending on the bill’s effective date related to
the cultivation or possession of a personal use amount of cannabis by a person at least
age 21 must be dismissed.
Release from Incarceration or Supervision and Resentencing: A person who is
incarcerated or under supervision on the bill’s effective date for the possession or
cultivation of a personal use amount of cannabis may present an application for release and
the sentencing court must grant the petition and vacate the conviction. In addition, a person
who is incarcerated or under supervision on the bill’s effective date for any case involving
possession, cultivation, processing, or sale of cannabis may present an application for
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resentencing to the sentencing court. The court must, after considering the individual
circumstances, reduce the sentence if doing so would be in the interest of justice; however,
the court may not increase the sentence. An individual petitioning for release or
resentencing is eligible for OPD representation.
Alcohol and Tobacco Commission
By October 1, 2022, the commission, in consultation with the Office of Social Equity, must
adopt regulations to implement the bill’s provisions, including, but not limited to:
 procedures for the issuance, renewal, suspension, and revocation of a license to
operate a cannabis establishment;
 qualifications for licensure;
 rules, procedures, and policies to encourage participation in the regulated cannabis
industry by people from communities that have been disproportionately harmed by
cannabis prohibition and enforcement;
 a “race to the top” scoring system that (1) makes the expansion of a cannabis
establishment to more than two locations contingent on its contributions to equity
and the community; (2) reflects input from the Office of Social Equity; and
(3) includes considerations of diversity in the cannabis establishment’s ownership
and workforce, as specified;
 a schedule of reasonable application, license, and renewal fees, including a
$5,000 cap on application fees and a 50% reduction in all fees for social equity
applicants;
 security requirements;
 health and safety regulations and standards for the manufacture of cannabis products
and the cultivation of cannabis;
 civil penalties for failure to comply with adopted regulations; and
 procedures for collecting taxes levied on cannabis establishments.
The regulations may not (1) prohibit the operation of cannabis establishments, either
expressly or through the application of the regulations or (2) require a high investment of
risk, money, time, or any other resource or asset that would result in the operation of a
cannabis establishment being considered not worthy of being carried out by a reasonably
prudent businessperson.
After consulting with researchers knowledgeable about cannabis risks and benefits and
providing an opportunity for public comment, the commission must develop a scientifically
accurate safety information label and/or handout. The safety materials must be made
available to every consumer and updated at least once every two years to ensure accuracy.
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The safety information materials must include (1) advice about potential risks of cannabis
and (2) a warning about the need to safeguard all cannabis from children and pets.
Social Equity Provisions
The bill establishes several provisions for specifically addressing inclusion in the legal
cannabis industry of a “social equity applicant” – defined in the bill as an applicant for a
cannabis establishment license that meets at least one of the following specified
requirements:
 at least 51% ownership and control by at least one State resident who has resided
for at least 5 of the last 10 years in a “disproportionately impacted area”;
 at least 51% ownership and control by at least one State resident who has been
arrested, convicted, or found responsible in a juvenile court for possession offenses
that are eligible for expungement under specified provisions of the bill, or are
members of impacted families;
 a minimum of 10 full-time employees, with at least 60% of them residing in a
disproportionately impacted area or having a history of being arrested, convicted,
or found responsible in a juvenile court for possession offenses that are eligible for
expungement under specified provisions of the bill, or are members of impacted
families; or
 at least 51% ownership and control by one or more “disadvantaged equity
applicants.”
A “disproportionately impacted area” is defined as a geographic area, as identified by the
Office of Social Equity, that has been impacted by high rates of arrest, conviction, and
incarceration for cannabis possession and meets three or more of the following specified
criteria: (1) has a median income that is 80% or less of the average median household
income in the State; (2) has an unemployment rate that is at least 150% of the
unemployment rate in the State; (3) has a health uninsured rate that is at least 150% of the
health uninsured rate in the State; (4) has a food stamp or supplemental nutrition assistance
plan (SNAP) rate that is at least 150% of the food stamp or SNAP rate in the State; or
(5) has a poverty rate that is at least 150% of the poverty rate in the State.
A “disadvantaged equity applicant” is defined as an applicant who is a member of specified
minority groups and who either has a personal net worth that does not exceed $1,713,333
as adjusted annually for inflation according to the consumer price index or is a
disadvantaged owner of a certified minority business enterprise, as specified.
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Office of Social Equity: The bill establishes the Office of Social Equity within the
commission, headed by an executive director who (1) meets specified criteria and (2) is
appointed by the Governor. The Office of Social Equity