What Is Maryland’s Cannabis Business Assistance Fund?

One of the most exciting parts of Maryland’s new cannabis laws is the establishment of the Cannabis Business Assistance Fund.     This Fund is operated by the Maryland Department of Commerce, and was required by House Bill 556 that was passed by the Maryland General Assembly.    The stated purpose of the fund is to “assist small, minority-owned, and women-owned businesses entering the {Maryland} adult-use cannabis industry.”    HB 556 Page 103.  The funding for this cannabis business assistance fund comes from money appropriated by the State and from tax revenues from adult use sales of cannabis.   Specifically, for 2024 and 2025 the Cannabis Business Assistance Fund receives 5% of cannabis tax revenue after paying for the costs of the Cannabis Administration expenses.   This fund provides free money to Social Equity Applicants, and will help minority cannabis businesses in Maryland launch their businesses without having to give up a substantial amount of equity.

The Cannabis Business Assistance Fund will give grants and loans to minority owned and women owned businesses for license application assistance, operating expenses, capital expenses, cannabis training programs, and grants to Historically Black Colleges and Universities.

Here are some other things that Maryland Cannabis License Applicants should know about the Cannabis Business Assistance Fund:

• Grants and loans are prioritized for individuals historically unfairly impacted by cannabis law enforcement and the war on drugs and Maryland individuals who have been convicted of a law criminalizing cannabis.
• Most importantly, the statute that created the Fund requires prioritization for “Social Equity Licensees to assist with Start-Up Operating and Capital Funding Needs.”
• The Fund is not available to individuals with a personal net worth of over $1,700,000.00.    Please note that you should contact a lawyer to determine whether or not you would be excluded based on this, as there are certain assets that can be excluded from this calculation (including your primary residence and certain retirement accounts).   
• The first round of applications for grants and loans occurred in June 2023 and was generally to assist minority license holders pay conversion fees to participate in the adult use market in Maryland. 
• The second round opened on August 1, 2023 and was geared toward providing funding to those social equity licensees who had a pre-approval prior to October 1, 2022 but have not been able to obtain funding for build out and become operational cannabis companies.  The applications for this round of funding is scheduled to close on August 31, 2023.   
• There are no fees or costs to apply for loans and grants.
• Repayment of loans begins October 1, 2024 and payments will be requited to be made quarterly. 
• There are zero fees or interest for Cannabis Business Assistance Loans !
• Loan and Grant recipients are subject to random audits by the State to be sure that the funds are being used for what the applicant promised to you the funds for.   Also, status reports must be submitted every 6 months showing what progress has been made towards becoming operational.
• We anticipate that another future round of applications to assist Social Equity Applicants apply for Maryland’s Round 1 of new licenses.    We expect that application process to open up in the Fall of 2023, and that the new round to apply for Business Assistance Funds for applications will open in late summer or early Fall of 2023 as well. 

Contact a Maryland Cannabis Lawyer for more information about the Maryland Business Assistance Fund opportunities !