Matthew J. McCarthy – Cannabis Industry

Effective July 1, 2023, adults 21 and older will be able to possess, consume, and purchase adult-use cannabis throughout Maryland. Maryland Governor Wes Moore signed House Bill 556 on May 3, 2023, after the Maryland House of Delegates and Senate passed the legislation. Upon the governor’s approval, the law replaced the Maryland Medical Cannabis Commission, a board made up of 13 commissioners that regulated medical cannabis, with the Maryland Cannabis Administration (“MCA”), an autonomous agency. MCA is now working to issue medical cannabis licensees processors with expanded licenses that will permit them to produce and sell cannabis flower, pre-rolls, edibles, and other authorized products to both the medical and recreational markets.
MCA now reports that more than 90 medical dispensaries across the state have received these expanded licenses and will be eligible to sell to the recreational market on July 1.

The law also expands Maryland’s social equity efforts by establishing a new Office of Social Equity, an independent office charged with “promot[ing] and encourag[ing] full participation in the regulated cannabis industry by people from communities that have been disproportionately impacted by the War on Drugs.” The new Community Reinvestment and Repair Fund will direct tax revenues from adult-use sales to community-based initiatives designed to benefit low-income communities.

The law also creates a forum between the regulator and the licensed industry through establishment of the Advisory Board, which will be chaired by the MCA’s executive director. By law, members of the board will be appointed by the governor and include current licensees, experts in cannabis law, science, or policy, and public health experts, among others. Once appointed, the Advisory Board will be empowered to provide recommendations to MCA on policy and regulations.

Although providers currently in the medical cannabis market will be the first to offer adult use products to adult consumers, the new law authorizes the MCA to issue additional grower, processor, and dispensary licenses – including microlicenses for smaller-scale producers. This summer, the MCA and the Office of Social Equity will conduct outreach and provide training for aspirants to the new market.

The 30-day application window for new licenses will open in September 2023.

The District of Columbia (D.C.) Superior Court has ruled in favor of a homeowner who has long complained that her neighbor’s use of cannabis was to blame for her chronic nausea and other ailments.

Josefa Ippolito-Shepherd, plaintiff, a public health scientist in D.C.’s Cleveland Park neighborhood, filed a private nuisance action against her neighbor in 2020. The plaintiff and defendant live in a duplex, sharing a wall. The defendant neighbor rents the ground unit apartment to Thomas Cackett, who purchases medical cannabis with a doctor’s authorization and testified that he smokes cannabis at night to help him fall asleep.

Ippolito-Shepherd claimed that the smoke permeated her house constantly and caused her to lose sleep, prompted digestive problems and vomiting. Claiming that Cackett and his landlord knew about the “intoxicating fumes” coming from their home since July 26, 2019, Ippolito-Sheppard previously tried to convince her landlord neighbor to evict Cackett and asked Cackett to stop smoking inside the house. Both refused. When Ippolito-Sheppard first sued to 2020, the trial court dismissed the case, concluding that because smoking in one’s home was not illegal, Ippplito-Sheppard could not maintain a nuisance claim. Ippolito-Sheppard persisted, stating that she “has the right to breathe fresh air in [her] home.”

The D.C. Court of Appeals disagreed with the trial court’s dismissal, finding that although smoking in one’s home was legal in D.C., this did not preclude a private nuisance action and remanded the case for trial.

After a closely watched bench trial, the first of its kind in the D.C. area, on June 5, 2023, Judge Ebony Scott ruled in Ippolito-Sheppard’s favor. Although Cackett was legally authorized to use cannabis, she ruled that Cackett “does not possess a license to disrupt the full use and enjoyment of one’s land.” Judge Scott’s order prohibits Cackett from smoking or burning cannabis in any way that emits an odor, either at his home or anywhere within 25 feet of Ippolito-Sheppard’s address. Judge Scott further wrote that “the public interest is best served by eliminating the smoking nuisance and the toxins that it deposits into the air, toxins that involuntary smokers have no choice but to inhale.” However, the court did not find that Ippolito-Sheppard sufficiently proved that marijuana smoke was the cause of her illness and denied her monetary damages.

D.C.’s newly reconstituted Alcoholic Beverage and Cannabis Administration (ABCA), under D.C.’s new medical cannabis law, has not yet issued any public statement on the case. Since March 2023, ABCA has jurisdiction over both licensed medical cannabis operations and less-regulated cannabis gifting shops that operate under Initiative-71 (I-71), a successful 2014 referendum which decriminalized possession and use of cannabis in D.C. for anyone 21 years or older. I-71 also prohibits use of cannabis in any public place. Local activist Adam Eidinger urges local government to instead provide reasonable rules for smoking in public, believing that such guidelines would curtail these next-door neighbor conflicts instantly.

ABCA is currently accepting applications for new medical cannabis licensees to cultivate, process, and dispense cannabis, in brick-and-mortar storefronts and through online sales and delivery. ABCA will also eventually offer I-71 shops the opportunity to receive full licenses as medical dispensaries under the new medical cannabis law, which permits patients to self-certify their need for medical cannabis.