If permitted by applicable state regulations, an on-site cannabis consumption facility can be an indoor or outdoor location which is open to the public and licensed to allow individuals who are 21 years or older to consume cannabis on its premises. Under existing Maryland law, qualifying patients may only smoke or consume cannabis in a private residence. Due to concerns of occupational safety, odor, impaired driving and youth use, the use of cannabis in any public place is currently expressly prohibited. Under recent legislation, the Maryland Medical Cannabis Commission (“MMCC”) was required to provide the Maryland legislature with recommendations and guidance as to how cannabis consumption lounges should be permitted and regulated. There are few operating cannabis consumption lounges in the United States, and insufficient data to provide concrete analysis regarding the most effective regulations for cannabis consumption facilities. Below is an excerpt of the relevant recommendations provided from the MMCC to the Maryland legislature.

MMCC Legislative Report on Adult-Use Cannabis Best Practices On-Site Cannabis Consumption Facilities

Absent evidenced-based best practices or a consensus approach across states, the MMCC recommends that the Maryland General Assembly require the Cannabis Public Health Advisory Council to conduct additional studies and make recommendations on whether and how to allow on-site consumption. Alternatively, if the General Assembly chooses to authorize on-site consumption facilities during the 2023 legislative session, the MMCC recommends the following:

1. Prohibit the sale and use of alcohol and tobacco at on-site cannabis consumption facilities: The only area of agreement that currently exists across states with on-site consumption facilities is that all states prohibit the sale and use of alcohol and tobacco at the facilities. Maryland should follow these practices due to health, safety, and increased intoxication concerns.
2. Prohibit a business that holds an on-site consumption license from owning or controlling a license to grow, process or dispense cannabis: On-site consumption licenses should be distinct from the existing licensing structure. Existing cannabis businesses should be prohibited from holding these new licenses, increasing participation in the State’s cannabis market.
3. Prioritize social equity businesses in the application process and require that certain percentage of licensees be issued to social equity businesses: Low entry costs and a new licensing structure would attract social equity businesses. The application process should prioritize social equity applicants and require that a certain share of these new license types be awarded to them.
4. Establish clear indoor air quality and ventilation standards to protect employees and consumers and to prevent the spread of cannabis odor outside the licenses’ premises: There is concern that, long-term exposure to second-hand cannabis smoke could present health risks to consumers and staff. If the State elects to establish on-site consumption facilities, it should consider establishing strong indoor air quality and ventilation standards such as those used in Nevada. Nevada provides explicit requirements for the ventilation of consumption facilities, with detailed instructions in statute as to the number of air-changes per hour, requirements for atmospheric monitoring of the space, and permissible filtration systems.
5. Establish zoning and planning requirements for on-site cannabis consumption facilities: Health-General Article § 13-3313.1 establishes a cannabis advertisement may not be placed within 500 feet of a primary or secondary school, substance use disorder treatment facility, or playground, library, or public park. Similar siting requirements should be considered for on-site consumption facilities.
6. Employee training and consumer education requirements: Employees at consumption facilities should be trained in the effects and signs of overconsumption and impaired driver mitigation to provide a safe environment for cannabis consumption. Consumer education is important for the safe use of cannabis products.
7. Consider adopting a process that priorities subject matter expert and public input: Considering the various local, state, public health, safety, and stakeholder interests around the establishment of on-site consumption facilities, the State should allow for public comment in future reports pertaining to on-site consumption and throughout the regulatory process.

To access a copy of the MMCC’s full legislative report, visit the Maryland Legislative Library & Information Services website (https://mlsd.ent.sirsi.net). If you would like a call to discuss how these developments may affect you or your business, please contact Jonathan Wachs at 301-575-0302 or jwachs@offitkurman.com.