California Cannabis Firms watching Maryland Licensing Activity for Learned Lessons

Maryland's experiences are particularly relevant to California regulators and investors as it is indicative of the financial interest in the cannabis industry. California will begin establishing its own licensing requirements over the next two years as laid out in its recently enacted MMRSA.

From Marijuana Business Daily:

Maryland is poised to become one of the largest medical cannabis markets east of Colorado. And it shows: The state recently received 1,046 applications for permits, including 811 for dispensaries – an unexpected avalanche that forced officials to delay the licensing process.
A look at the companies behind the applications reveals the emergence of big enterprises with plenty of capital to push into new markets as well as small players scrambling to get involved in a red-hot industry.
It also shows how companies are increasingly seeking multiple licenses – sometimes dozens – in states with ample opportunities and low initial application barriers.

Out of state licensing is a big concern for California regulators as one of the primary goals of the licensing effort is to move as many of the state's current marijuana businesses into the state system. If they are squeezed out by out-of-state interests such firms may try to remain in business but outside of the regulatory system. This would be a lose-lose for the state.

Here is what is happening so far in Maryland:

Indeed, while local applicants dominated Maryland’s application process, out-of-state applicants also left their mark.
Of the 811 dispensary applicants, 98 (12%) are listed as being from out of state, as are 7 (5%) of the 146 grower license applicants and 7 (6%) of the 124 processor license applicants.
Many companies that were listed as being from Maryland were owned by out-of-state individuals or entities that had incorporated in Maryland or found local partners.

One can expect that if CA regulators enact barriers to out-of-state players (as appears to be the case with MMRSA residency requirements), then license arrangements and partnerships will ensue.

By Wesley