How to Get a Dispensary License in Maryland 2025

Maryland has fully embraced cannabis reform, offering both medical and recreational cannabis use under a regulated system. The state initiated its medical marijuana program in 2017, providing access to qualifying patients, and expanded its cannabis market further in July 2023 with the legalization of adult-use cannabis for individuals aged 21 and over.

The cannabis legalization process in Maryland began with House Bill 881 in 2014, which authorized medical marijuana use. Subsequent legislative advancements led to the full-scale Cannabis Reform Act (HB 556/SB 516), which governs cannabis sales, taxation, and licensing today.

If you’re looking for a straightforward answer to the question of whether you can obtain a dispensary license in Maryland, the answer is yes—but with specific requirements. You’ll need to meet eligibility criteria, determine your license type (either standard or micro license), prepare a business plan, and submit an application through the Maryland Cannabis Administration (MCA). Fees for licenses vary, with a $5,000 application fee for a standard license and a $1,000 for a micro license.

Additionally, Maryland prioritizes social equity applicants, meaning that individuals from disproportionately impacted areas may receive preferential consideration. The process also includes zoning compliance, financial documentation, and operational approvals. Below, we’ll cover each step in detail.

For aspiring business owners, the licensing process is detailed and competitive. This guide provides an in-depth look at the steps required to submit an application for a dispensary license through the MCA and outlines the regulatory considerations necessary for long-term success.

Types of Cannabis Licenses Available in Maryland

​The MCA oversees the issuance of various cannabis business licenses, each tailored to specific functions within the state’s cannabis industry. Understanding these license types is crucial for entrepreneurs aiming to enter Maryland’s stringently regulated cannabis market.​

1. Grower License

Permits the cultivation of cannabis plants, enabling licensees to supply raw cannabis to processors and dispensaries. Maryland offers two tiers of cultivation licenses:​

• Standard Grower License: Allows for larger-scale cultivation operations, with canopy sizes ranging from 10,000 to 300,000 square feet. ​
• Micro Grower License: Designed for smaller operations, this license limits canopy space to a maximum of 10,000 square feet. ​

As of July 1, 2023, existing medical cannabis growers were required to convert their licenses to standard cannabis licenses to participate in the adult-use market. 

2. Processor License

Authorizes businesses to transform raw cannabis into various products, including edibles, concentrates, tinctures, and topicals. Similar to cultivation licenses, there are two categories:​

• Standard Processor License: Suitable for larger processing operations handling significant volumes of cannabis.​
• Micro Processor License: Intended for smaller-scale processors with limited production capacities.​

Processors play a vital role in diversifying the range of cannabis products available to consumers. ​

3. Dispensary License

Required for businesses that sell cannabis products directly to consumers. Maryland offers two types of dispensary licenses:​

• Standard Dispensary License: Allows for the operation of a physical retail location where consumers can purchase cannabis products.​
• Micro Dispensary License: Typically permits delivery services with up to 10 employees, often without a physical storefront. ​

Dispensaries serve as the primary point of sale for both medical patients and adult-use consumers.​

4. Testing Laboratory License

Granted to facilities that conduct safety and potency testing on cannabis products. These laboratories ensure products meet state-mandated standards for quality and consumer safety. Accurate testing is essential for verifying cannabinoid content and detecting contaminants.​

5. Transporter License

Enable businesses to legally transport cannabis products between licensed entities, such as from a cultivation site to a processing facility or dispensary. Transporters must adhere to stringent security protocols to ensure the safe and compliant movement of cannabis products within the state.​

Additional License Types

Maryland’s cannabis regulatory framework also includes other specialized licenses:​

• Incubator Space Licenses: Support small or emerging businesses by providing shared facilities and resources.
• On-Site Consumption Licenses: Permit establishments where consumers can legally consume cannabis products on the premises. ​

Application Process and Social Equity Considerations

The MCA has implemented measures to promote social equity within the cannabis industry. In 2023, the MCA conducted lotteries for social equity licenses, awarding a total of 205 licenses across grower, processor, and dispensary categories. To qualify as a social equity applicant, at least 65% ownership and control must be held by individuals who meet specific criteria, such as residing in disproportionately impacted areas or attending certain educational institutions. 

Prospective applicants must submit their applications through the Maryland OneStop portal, ensuring compliance with all regulatory requirements. Application fees vary depending on the license type, with standard licenses typically requiring higher fees than micro licenses.​

Understanding the distinct types of cannabis licenses available in Maryland is essential for aligning business objectives with regulatory requirements and entering the state’s regulated cannabis market successfully.

Eligibility Requirements for a Maryland Dispensary License

Before applying, prospective dispensary owners must meet the following eligibility criteria:

• Age & Residency – Applicants must be at least 21 years old and a resident of Maryland.
• Background Check – A criminal background check is required; certain felony convictions may disqualify applicants.
• Financial Stability – Applicants must demonstrate sufficient capital to support operations.
• Social Equity Applicant Considerations – Those from disproportionately impacted areas, recipients of a Pell Grant, or individuals with a cannabis-related conviction may qualify for social equity prioritization.
• 65% Ownership and Control Requirement – Social equity applicants must have at least 65% ownership and control of the applying entity.

Meeting these requirements is essential before submitting a dispensary application.

Step-by-Step Guide to Submitting an Application

1. Pre-Application Preparation

1. Research the Cannabis Market: Prospective applicants should familiarize themselves thoroughly with Maryland’s cannabis laws and regulations. The MCA provides comprehensive resources detailing licensing requirements, operational guidelines, and compliance standards. Understanding the various license types—such as standard and micro dispensary licenses—is crucial for aligning business objectives with regulatory provisions. ​
2. Develop a Business Plan: A robust business plan is essential. This document should outline financial projections, operational structures, security protocols, and marketing strategies. It must demonstrate a clear pathway to profitability, compliance with state regulations, and a commitment to diversity and inclusion within the workforce. 
3. Secure a Location: Identifying a suitable location is a critical step. The chosen site must comply with local zoning laws, maintaining appropriate distances from schools, parks, and other dispensaries. Engaging with local zoning boards or planning departments can provide clarity on permissible locations for cannabis operations.

2. Application Submission

To apply for a dispensary license, applicants must:

1. Create an Account on Maryland OneStop: This portal serves as the centralized platform for all licensing applications. Applicants must create an account to access and submit the necessary forms. 
2. ​Complete the Application Form: Applicants need to select the appropriate license type—standard or micro—and provide detailed information about the business, including ownership structures and operational plans. Accuracy and completeness are vital to avoid delays in processing. ​
3. Submit Supporting Documentation: Essential documents include the business plan, proof of Maryland residency, security measures, and a diversity strategy. These documents should provide a collective demonstration of the applicant’s preparedness to operate within the state’s regulatory framework. 
4. Pay the Application Fee: Application fees are set by the MCA and vary based on the license type. Applicants should consult the latest fee schedule provided by the MCA to determine the exact amount.

3. Review Process and Licensing Approval

1. Application Evaluation: The MCA assesses applications based on several criteria, including the viability of the business plan, financial stability, and the comprehensiveness of the diversity strategy. Applications that meet the minimum qualifications will then proceed to the next stage. 
2. Conditional Approval: Applicants who pass the initial evaluation may receive conditional approval. This allows them to proceed with establishing their operations, subject to meeting additional compliance requirements, such as facility inspections and adherence to security protocols. ​
3. Final Licensing: Upon satisfying all conditions, including successful inspections and compliance verifications, the MCA grants an active dispensary license. This authorizes the business to commence operations and serve consumers within the legal framework established by Maryland law. ​

Compliance and Regulatory Considerations

​Operating a cannabis dispensary in Maryland necessitates strict adherence to the state’s comprehensive regulatory framework. Key compliance areas include:​

1. Security and Inventory Management

Dispensaries are mandated to implement robust security measures to safeguard both products and premises. According to the MCA, these encompass continuous surveillance systems, alarm installations, and secure storage for cannabis products. ​

Additionally, Maryland requires the use of the Metrc seed-to-sale tracking system to ensure comprehensive product traceability. This system monitors the life cycle of cannabis products, from cultivation to sale, aiding in compliance and inventory accuracy. ​

Investing in a specialized cannabis point of sale (POS) system, such as IndicaOnline, can bring significant improvements to inventory management and regulatory reporting. IndicaOnline offers features like real-time inventory tracking, automated compliance reporting, and seamless integration with state-mandated systems like Metrc, ensuring data synchronization and reducing the risk of non-compliance. ​

2. Advertising and Marketing Restrictions

Maryland enforces specific guidelines to ensure cannabis advertising is conducted responsibly, and dispensaries must avoid marketing strategies that appeal to minors or include misleading claims. All promotional materials should comply with the MCA’s advertising regulations to maintain ethical standards and public trust. ​

3. Tax and Financial Requirements

Under the Cannabis Reform Act, Maryland imposes a 9% sales tax on cannabis products, which dispensaries are responsible for collecting and remitting to the state. Accurate financial record-keeping is essential to comply with tax obligations and to facilitate audits. Implementing a comprehensive POS system like IndicaOnline can assist in maintaining detailed financial records, tracking sales transactions, and generating the necessary reports for tax compliance.

Local Regulations and Zoning Laws

Before opening a dispensary, business owners must secure:

Zoning Compliance

In Maryland, dispensaries must comply with specific zoning requirements set by local municipalities. Key considerations include:

• Distance from Sensitive Areas: Dispensaries must be located at least 1,000 feet away from schools, parks, and other areas frequented by minors. This ensures cannabis retail operations do not have a negative impact on vulnerable populations.
• Proximity to Other Dispensaries: There is a restriction on the proximity of dispensaries to each other to prevent market saturation—dispensaries must be at least half a mile apart from one another.

Local Permit

Obtaining the necessary local permits is essential for a legal dispensary license. The requirements include:

• Business Licenses: Apply for a local business license from your city or county’s licensing department. This is a fundamental requirement for all businesses operating within the jurisdiction.
• Health Permits: If your dispensary plans to sell edible cannabis products, you may need permits from the local health department. These ensure all food products meet safety standards.
• Additional Approvals: Depending on your location, additional permits may be required, such as fire safety inspections, building permits, and signage approvals. Each municipality has specific requirements, so it’s crucial to check with local authorities.
• Documentation: Applicants must submit comprehensive documentation, including business, diversity, and operational plans.

Social Equity in the Maryland Cannabis Market

​Maryland has taken significant steps to promote social equity within its burgeoning cannabis industry, aiming to address historical disparities and ensure inclusive participation. Central to this initiative is the definition and support of social equity applicants.​

Defining a Social Equity Applicant

Under Maryland’s Cannabis Reform Act of 2023, a social equity applicant is defined as an entity with at least 65% ownership and control held by individuals who meet specific criteria. These criteria include:​

1. Residency in Disproportionately Impacted Areas: Individuals who have resided in a disproportionately impacted area for at least five of the past ten years. These areas are identified based on historical data reflecting higher rates of cannabis-related arrests and convictions. ​
2. Educational Background: Individuals who attended a public school in a disproportionately impacted area. This criterion recognizes the correlation between educational environments and community impact. ​
3. Pell Grant Recipients: Individuals who, in the past ten years, received a Pell Grant, a federal subsidy for post-secondary education awarded to students with financial need. This criterion acknowledges economic challenges that may have limited opportunities.

Establishment of the Office of Social Equity

To oversee and implement these initiatives, Maryland established the Office of Social Equity (OSE) as an independent executive agency within the MCA. The OSE’s responsibilities include:​

• Technical Assistance: Implementing programs to support qualifying social equity applicants and licensees. 
• Grant Programs: Offering Technical Assistance Grants to eligible licensees, providing up to $14,000 in funding for essential cannabis business training and professional services. ​

Licensing and Application Process

In its first social equity licensing round, which concluded on December 12, 2023, Maryland received 1,708 applications across the dispensary, grower, and processor categories. Subsequently, on March 14, 2024, the MCA conducted a lottery to award 174 social equity business licenses, underscoring the state’s commitment to diversity and inclusion within the cannabis industry. ​

Expungement and Reinvestment Efforts

Beyond licensing, Maryland’s social equity initiatives encompass the expungement of certain cannabis-related convictions and the establishment of a Community Reinvestment and Repair Fund. This allocates resources to communities disproportionately affected by past cannabis enforcement policies, supporting services such as job training, reentry programs, and youth development. ​

Additionally, IndicaOnline offers a social equity program that seeks to create an equitable ownership and employment environment in the cannabis industry.

Seizing Your Opportunity in Maryland’s Cannabis Market

You can get a dispensary license in Maryland in 2025, but don’t mistake opportunity for simplicity. The process is competitive, the regulations are strict, and the market is evolving fast. Whether you’re a first-time entrepreneur or an industry veteran, success will depend on your attention to detail, financial readiness, and ability to tackle the legal process. The cannabis industry is rewarding, but it’s also unforgiving to those who cut corners. Stay informed, follow compliance closely, and be prepared for unexpected challenges.

Entrepreneurs who take the time to develop a clear vision, build strong operational frameworks, and invest in tools like a robust POS system for inventory management and compliance will be best positioned to succeed.

Note: This article is for informational purposes only and does not constitute legal, financial, or business advice. Cannabis laws and regulations are subject to change, and compliance requirements can vary. Before applying for a dispensary license in Maryland, consult with a legal professional or regulatory expert to ensure full compliance with state and local laws.