The underlying lawsuit filed by the Maryland Hemp Coalition and other businesses in the hemp-supply chain remains unresolved. It alleges restrictions in the state’s new recreational cannabis market violate the Maryland Constitution’s equal protection and anti-monopoly clauses by effectively shutting down their businesses and excluding them from a tightly controlled market.
The state government is seeking to dismiss the lawsuit, but Wilson’s ruling will allow the hemp retailers who were put out of business by the new law to be able to operate, said attorney Nevin Young, who represents the plaintiffs.
Maryland officials Thursday said the order hurt efforts to make THC-containing products, including those derived from hemp, safer for Maryland consumers. Outside of the regulatory structure created for cannabis, other hemp-derived products including delta-8 THC, delta-10 THC, and synthetic, lab-made THC products do not have testing, labeling or manufacturing standards.
“The Administration was disappointed to learn of the preliminary decision in Washington County Circuit Court allowing for the continued sale of unregulated, untested, and intoxicating hemp-derived products,” William Tilburg, director of the Maryland Cannabis Administration, said in a statement on behalf of the newly-formed state agency.
This summer, Maryland joined 22 other states that have legalized recreational cannabis use as public sentiment has shifted about the drug. The move, approved by a vast margin of state voters last fall, has been hailed by state leaders as a vehicle for social equity whose tax proceeds will go toward unwinding the consequences of racial disparities in the enforcement of past drug laws. People 21 and older can buy and consume cannabis from dispensaries licensed by the state with a government-issued ID.
Before the first day of legal sales, Maryland officials developed a plan to convert medical marijuana licenses into general use licenses so that existing cannabis businesses could immediately transition to adult-use sales July 1. New businesses will be allowed to enter the industry early next year, with priority given to applicants from Zip codes disproportionately affected by arrests related to the war on drugs.
The judge’s order does not immediately affect the licensing process for cannabis companies, and the state is still committed to its social equity efforts, Tilburg said.
Hemp businesses say they have been unfairly damaged by the new law, which shut down one of the most profitable arms of their businesses when it restricted the sale of intoxicating hemp products, without providing the same preferential access to the new industry that medical cannabis companies received and social equity applicants are scheduled to receive in the future.
Nicholas Patrick, a plaintiff in the case, said he had to shut down the three Embrace Wellness Centers that he had grown over the past few years into a thriving small business with $1.5 million in annual revenue and several employees. His finances have been sinking ever since.
“I was inches away from bankruptcy,” he said Thursday evening before a coalition of plaintiffs gathered to discuss their next steps. “Hopefully, I can get up my business up and running and take care of my family.”
He said his revenue dropped by 74 percent after the law took effect and he was barred from selling delta-8 and a host of other hemp-derived products that now require a type of retail license that by law were available only to existing medical marijuana companies.
He said he let go of four employees. While he was able to convert his Glen Burnie location and reopen as a smoke and vape shop, he had to permanently close the Ellicott City and Pasadena locations.
“The human cost for me was the worst cost,” Patrick said. “We had to let them go, and it broke my heart in a million pieces … I don’t even have the financial means to get them back opened up. I have no money left.”
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