Maryland Cannabis Administration urges committee to create wholesale cannabis license ahead of potential interstate market

HB204, a departmental request from the Maryland Cannabis Administration (MCA), would create a new wholesale cannabis license category and set associated application and licensure fees, MCA representatives told the House Economic Matters Committee. The bill would authorize the MCA to award up to 15 wholesale licenses and require the agency to include the category in future licensure rounds.

MCA official Selena Raleigh told the committee the agency’s predictive modeling — included in her written testimony to the General Assembly — indicates early adoption of wholesale licenses could position Maryland as a distribution hub should federal rescheduling occur. "Established wholesale distributors in Maryland would be crucial for managing out‑of‑state product flows and ensuring compliance with Maryland's testing, packaging and labeling standards," Raleigh said.

Why it matters: Supporters say the license would help socialize infrastructure (storage, testing compliance and inventory management) that could benefit smaller social equity microbusinesses and prepare Maryland for interstate commerce. Raleigh said centralized wholesale operations could reduce costs and increase operational efficiency for microbusinesses that lack storage and distribution capacity.

Industry and patient groups urged caution. Rusty Carr, a medical cannabis patient and Mount Airy resident, raised concerns about existing shelf‑space agreements and other practices that he said have enabled cultivators or wholesalers to exert pressure on dispensaries. "There's a lot of tricks that a wholesaler or the industry can pull to give preference to cultivators or preference to dispensaries," Carr told the committee, urging clearer prohibitions in regulations to protect dispensaries.

Opposition testimony came from the Maryland Dispensary Association and the Maryland Wholesale Cannabis Trade Association, both of which urged an unfavorable report. Ashley Bagwell of the Maryland Dispensary Association said a 2022 MCA study found no immediate need for a wholesale license and warned the new tier could add costs that push consumers toward the illicit market. "It is incredibly important to be mindful of things that potentially increase the cost of cannabis because doing so drives people from the legal market to the unregulated illicit market," Bagwell said.

Joe Bridal of the Maryland Wholesale Cannabis Trade Association said while a wholesale tier might be needed if federal legalization occurs, that future scenario is uncertain. Bridal said many other legal and regulatory issues — testing protocols, interstate movement rules, banking and financing — would need resolution before Maryland can safely rely on a wholesale tier.

Discussion and next steps: Committee members pressed industry groups and the MCA for suggestions on timing and regulatory detail. The MCA argued HB204 is forward‑looking; opponents favored delaying the change until the state has clearer signals about federal policy and more study of market impacts.

No formal vote on the bill is recorded in the committee transcript excerpt; the hearing record shows public testimony and questions only.

Ending: Supporters say HB204 would help Maryland prepare for potential interstate commerce and provide services for smaller licensees; critics warn the new license tier could raise costs, enable anti‑competitive arrangements, and should be timed to match federal policy developments.