OVERVIEW
The establishment of a cannabis incubator space is authorized in
§36-406 of the Alc. Bev. & Cannabis Article. The Maryland Cannabis Administration is authorized to work with the Maryland Economic Development Corporation, also known as MEDCO, to acquire and construct the nation’s first state-run cannabis incubator facility. The day-to-day operations of this facility will be run by a non-profit entity selected through a Request for Proposal process by the Maryland Department of General Services.
MEDCO submitted a
report analyzing potential sites to the Maryland General Assembly on
December 29, 2023. MEDCO solicited 15 of Maryland’s jurisdictions for potential locations, but did not receive participation from all. After receiving each list of potential locations, MEDCO reached out to all sites, but not all sites responded. MEDCO completed research regarding the needs of the site for cultivation, retail, and processing capabilities, as well as reviewed DGS’s clearinghouse for other sites already owned by the State.
BACKGROUND
Q: What is a cannabis incubator space?
A: A cannabis incubator space is a facility where certain licensed users—like micro processors or micro dispensaries—may process and securely store cannabis or cannabis products for sale and delivery offsite. Cannabis is not sold or grown onsite. The incubator provides licensees who have operational or financial constraints with access to equipment and space. The facility may also provide business development opportunities—like classes to promote business growth and processing skills—to help new social equity cannabis businesses enter the market. Maryland’s cannabis incubator will be the first state-run cannabis incubator in the nation, designed to exclusively serve social equity licensees and micro-businesses.
Q: What are social equity licensees?
A: As stipulated in the Cannabis Reform Act of 2023, the first cannabis business licensing round was exclusively for verified social equity applicants who met the following:
● For at least two years, attended a four-year institution of higher education in the State where at least 40% of the individuals who attended the institution of higher education received a Pell Grant.
The law defines “disproportionately impacted area” as a geographic area identified by the Office of Social Equity that had above 150% of the State’s 10-year average for cannabis possession
charges.
Q: What is a micro license?
A: A micro license authorizes the holder to operate a medical and adult-use cannabis business; their operations are smaller than that of a standard license. License type may differ. A micro processor, for instance, allows a cannabis business to transform cannabis into another product and package that product for sale up to but not more than 2,000 pounds of cannabis per year. In comparison, a standard processor licensee is authorized to process more than 2,000 pounds of cannabis per year.
Q: What is a micro dispensary?
A: A micro dispensary license authorizes the holder to operate a delivery service that sells cannabis or cannabis products without a physical storefront and may only employ up to 10 employees.
A standard dispensary licensee, in contrast, may operate a physical retail establishment that sells cannabis or cannabis products without a cap on the number of hired employees.
Q: What is a micro processor?
A: A micro processor license authorizes the licensee to transform cannabis into another product or an extract and package and label the cannabis product for supply to licensed dispensaries or independent testing laboratories.
Micro processors are prohibited from processing more than 2,000 pounds of cannabis annually. In contrast, standard processors are able to process more than 2,000 pounds of cannabis per year without a specific cap.
Q: What is a micro grower?
A: A micro grower or cultivation license authorizes the license holder to cultivate or package cannabis and to provide cannabis to other licensees for sale or processing into another cannabis product. They can also provide cannabis to registered independent testing laboratories. These licensees may not operate more than 10,000 square feet of indoor flowering cannabis plants or the outdoor equivalent.
Standard growers, in contrast, can operate more than 10,000 square feet but not more than 300,000 square feet of canopy.
It is important to note that presently, micro grower licensees have not been contemplated as a license type that will be present at the state-run cannabis incubator.
Q: Would cannabis be sold in this space?
A: No, cannabis would not be sold onsite. This space is for licensees to jumpstart their businesses and acquire skills in a supportive environment. They would sell products offsite.
Q: Would this be the first incubator of its kind?
A: Yes. This would be the first state-run cannabis incubator in the nation designed to exclusively serve social equity licensees and micro-businesses.
Q: Would there be public access to the space?
A: Only those who are registered, licensed, and badged by the Maryland Cannabis Administration may use or access the cannabis incubator space.
Q: Would cannabis be grown on site?
A: No, plants cannot be grown or cultivated onsite.
Those who are licensed to use the facility will receive cannabis bud to repackage or process into another form onsite using the facility (e.g., vape, tincture, salve), or, to securely store onsite for future delivery services.
Q: Would there be cannabis odors that impact the neighborhood?
A: State-of-the-art odor mitigation systems will be built into the facility, to include industrial air filtration, sealed rooms, and HVAC controls, consistent with Maryland Cannabis Administration environmental regulations.
More detailed information about regulations is available through the Division of State
Documents website under 14.17.11.07.E (Edible Cannabis Processing) and 14.17.11.19 (Processor Standard Operating Procedures).
Q: How would licensees be selected to use the space?
A: Selection criteria and program regulations will be finalized and adopted by the Maryland Cannabis Administration to ensure fair access for qualifying micro licensees.
Q: What services would the incubator spaces offer?
A: The cannabis incubator will offer certain licensed users—like micro processors or micro dispensaries— space to process and securely store cannabis or cannabis products for sale and delivery offsite. Cannabis is not sold or grown onsite.
Micro dispensaries can use the facility to securely store products prior to delivery. They may not sell products out of the incubator space.
Micro processors have access to shared commercial kitchens and equipment to process cannabis into final products (e.g., vapes, edibles) and may store their products onsite. They may not sell products out of the incubator space.
Q: What are the roles of MEDCO, DGS, and MCA in the project?
A: The Maryland Economic Development Corporation (MEDCO) will acquire the space and build out the incubator.
The Maryland Department of General Services (DGS) will then assume ownership and will issue a request for proposal to select a nonprofit to operate the incubator day-to-day. The non-profit will be responsible for managing the site, including facility operations, regulatory compliance, and facility use scheduling.
The Maryland Cannabis Administration (MCA) will also ensure compliance, provide technical guidance, facilitate business and workforce development sessions, and create regulations to govern the use of the incubator space, in addition to issuing the licenses that are authorized to use the space.
Q: Who would manage the incubator and be responsible for its operations once the space is built out?
A: The Maryland Department of General Services will select a nonprofit to manage the incubator space through their standard request for proposal process—which is used for all state procurement projects—to manage high-level programming and workforce development in consultation with the Maryland Cannabis Administration and other agency partners.
The Maryland Cannabis Administration will maintain regulatory compliance of the site, including ensuring that construction requirements are met; security systems and proper lighting are present; and that compliance regulations are enforced to the same degree that they are for other cannabis licensees across the State.
Q: What is the cost and funding source for the incubator project?
A: The cannabis incubator project was originally estimated to cost $7 million.
In the FY 2026 operating budget, $5 million was realigned from the Department of General Services to the Maryland Cannabis Administration’s budget as general funds with another $2 million in Pay-as-you-go (PAYGO) general funds as a deficiency from a prior fiscal year.
When a new site is identified, a new cost estimate for the project will be built based on the acquisition and renovation needs. The Administration will act with dedicated care and diligence to mitigate any additional cost, should they be incurred.
Q: Will the incubator space have 24-hour security?
Requirements include but are not limited to 24-hour security alarm systems that cover the facility’s entry points; any room holding cannabis; and locations where records are stored on- and off-site. Facility entry will be restricted to badge-access only and the security system will be continuously monitored.
The system must also possess other capabilities, including detection of smoke and fire; power loss detection; and mounted panic alarm devices. The system must also remain operational until the licensed premises no longer has cannabis of any sort on site and must be equipped with an auxiliary mode of power that can maintain operations for a minimum of 48 hours.
Q: Would a neighborhood be put at risk with the incubator?
A: The cannabis incubator facility will not have any public signage indicating its use. Security is a top priority, and protocols will align with those used in compliance with other regulated cannabis facilities.
No cannabis sales will occur on site and at no time would there be access to areas inside the facility by the general public or any unauthorized user.
All cannabis will be stored in reinforced vaults with 24/7 surveillance, access-controlled areas, and strict adherence to Maryland Cannabis Administration security regulations.
Q: Do the proposed locations violate zoning laws or the intent of those laws?
A: No.
The applicable statute giving local jurisdictions this authority only sets distance restrictions from certain community establishments—schools, public parks, libraries, etc—for dispensaries. The incubator is not a dispensary, as no cannabis products may be sold out of the incubator facility.
As directed by the governor, potential new locations for the incubator space will follow similar guidelines and may not be within close proximity to residential communities and schools.
Q: How do businesses transition out of the incubator?
A: As businesses grow and plan to move out of the incubator to their own locations, the day-to-day incubator operator will facilitate and provide administrative assistance to the licensees as they transition. The operator will also notify the MCA of any licensee moving out of the incubator to ensure the vacated space can be utilized by another licensee . The model ensures new licensees can enter the incubator space over time to take advantage of the workforce development and training opportunities.
Q: Does the State of Maryland have an estimate of the number of licensees interested in utilizing the space?
A: We expect that approximately 60 social equity micro businesses would be eligible to use the space.
Q: Why is this project a priority of the Administration?
A: Maryland is proud to be home to the most equitable cannabis industry in the nation. As part of our ongoing effort to promote social equity in our state’s cannabis industry, we are committed to building a first-in-the-nation cannabis incubator that will support our social equity micro-licensees.
Through resource support and programming, the new facility will empower historically disadvantaged individuals and businesses to participate in the state’s burgeoning cannabis industry, which realized more than $1 billion in total sales in its first year.
Q: The Maryland Cannabis Administration said during the legislative session this year that the Catonsville Armory site had been selected—why was it selected if it never appeared as an option?
A: The Maryland Economic Development Corporation sought input from 15 of Maryland’s jurisdictions for sites they believed could be rented or bought and renovated for the purposes of the cannabis incubator project. The sites were identified in MEDCO’s list of viable properties.
MEDCO also used the Maryland Department of General Service’s state-owned property clearinghouse, which identified additional potential properties for use.
The original property chosen—the Catonsville Armory—was identified in the clearinghouse as being state-owned, centrally located, having pre-existing secure vaults, and with the least amount of renovation required to become operational.
Q: Why does it seem like the original Catonsville site was selected in a less transparent way?
A: It was no secret that the Administration was considering utilizing the Catonsville Armory as the location for the state cannabis incubator program.
The Maryland Economic Development Corporation sought input from 15 of Maryland’s jurisdictions for sites they believed could be rented or bought and renovated for the purposes of the cannabis incubator project. The sites were identified in MEDCO’s list of viable properties.
MEDCO also used the Maryland Department of General Service’s state-owned property clearinghouse, which identified additional potential properties for use.
As the Catonsville site was considered, there were numerous conversations with local and state elected officials, stakeholder groups—in addition to news coverage—as well as legislative consideration for the additional appropriations required to make the project successful during the 2025 Legislative Session.
The Administration intended to conduct additional and more in-depth community informational sessions after the budget was approved by the General Assembly, as the budget law required a report from the Administration on the details of those community engagement efforts.
Q: What community groups were engaged as part of the process of selecting the original Catonsville site?
A: The Administration engaged in numerous preliminary discussions with community groups, including the Catonsville Chamber of Commerce; UMBC’s BWTech, and the Baltimore County Arts Guild to get first impression reactions from stakeholders. The Administration also engaged with county and state elected officials for the same purpose.
The Administration intended to conduct additional and more in-depth community informational sessions after the budget was approved by the General Assembly, as the budget law required a report from the Administration on the details of those community engagement efforts.
Q: Outside of the residential community and school parameters, are you using other criteria to evaluate potential sites going forward?
A: Our guiding criteria for site selection will be the current restrictions that local jurisdictions must follow when determining if a cannabis dispensary may be located in a certain area, to include things like residential and school facilities; daycare or child care service centers; religious institutions; playgrounds; public parks, and libraries.
Proximity to other stand-alone cannabis businesses must also be taken into account, as well.
Q: When do you expect to be able to announce a new site?
A: The Moore-Miller Administration will work expeditiously – but thoughtfully and deliberately – to select the new site. At this time, we do not have a projected date for when a new site might be announced but we will provide updates as they become available.
The Maryland Cannabis Administration will maintain a dedicated webpage on the agency’s website that details progress of the new search, information about the intended use of the facility, potential locations being contemplated, and updates for community engagement, working closely with elected officials to host information sessions with community stakeholders and members of the public.
Q: How long do you now expect the project to be delayed?
A: We will have better estimates about the timeline for the project when the site has been selected. We will provide updates as they become available.
The Maryland Cannabis Administration will maintain a dedicated webpage on the agency’s website that details progress of the new search, information about the intended use of the facility, potential locations being contemplated, and updates for community engagement, working closely with elected officials to host information sessions with community stakeholders and members of the public.
Q: How much do you expect this delay to cost taxpayers?
A: $7 million has been appropriated to support the cannabis incubator project.
The Administration will work diligently to mitigate any cost increases related to this project, wherever and whenever feasible.
Q: How do you plan to engage with the communities moving forward to make sure this process goes better?
A: The Maryland Cannabis Administration will maintain a dedicated webpage on the agency’s website that details progress of the new search, information about the intended use of the facility, potential locations being contemplated, and updates for community engagement, working closely with elected officials to host information sessions with community stakeholders and members of the public.
Creation of this facility is required by the law as enacted by the General Assembly. The Moore-Miller Administration is committed to fulfilling its statutory obligation while ensuring community input and feedback are factored into final selection of the new project site.
Q: Why did the Administration choose to abandon the Catonsville Armory as the site for the incubator space?
A: Upon further review of this project—and the selection of the Maryland National Guard William J. Witte Armory in Catonsville as the preferred site for the cannabis incubator—Governor Moore concluded that the state should explore new options for its location.
The governor therefore directed the three agencies at the helm of this project—the Maryland Cannabis Administration, Maryland Department of General Services, and Maryland Economic Development Corporation—to conduct a new process and explore new locations for the project.
As part of their site review, the governor instructed the agencies to identify locations that are not within close proximity to residential communities and schools. The agencies will begin this new process immediately, conduct extensive community and stakeholder engagement, and work quickly to move the project forward.
Q: Do you have any backup locations?
A: MEDCO is reviewing the prior list of central Maryland locations to verify if they are still for sale and whether negotiations can begin for any alternate locations.
Q: MEDCO report did not have a significant number of options, how are you going to find other options to potentially use?
A: MEDCO will work with DGS to identify any new locations which may have come on the market since the last search occurred.
Q: How are you going to ensure you receive adequate community feedback this time?
A: The Administration engaged in numerous preliminary discussions with community groups, including the Catonsville Chamber of Commerce; UMBC’s BWTech, and the Baltimore County Arts Guild to get first impression reactions from stakeholders. The Administration also engaged with county and state elected officials for the same purpose.
The Administration intended to conduct additional and more in-depth community informational sessions after the budget was approved by the General Assembly, as the budget law required a report from the Administration on the details of those community engagement efforts.
The Maryland Cannabis Administration will maintain a dedicated webpage on the agency’s website that details progress of the new search, information about the intended use of the facility, potential locations being contemplated, and updates for community engagement, working closely with elected officials to host information sessions with community stakeholders and members of the public.
Q: What will happen to the Catonsville armory if it is not used as an incubator?
A: The armory will be sold in accordance with The Annotated Code of Maryland, Public Safety Article, Section 13-217, which describes the procedure for the conveyance of State armories, and subject to an updated Clearinghouse Recommendation to be provided by the Maryland Department of Planning.
The Department of General Services anticipates that it will issue either a request for bids or a request for proposals to sell the property to the highest bidder.
Q: Why did it take so much outcry from the public for the administration to snake changes here?
A: The Administration engaged in numerous preliminary discussions with community groups, including the Catonsville Chamber of Commerce; UMBC’s BWTech, and the Baltimore County Arts Guild to get first impression reactions from stakeholders. The Administration also engaged with county and state elected officials for the same purpose.
The Administration intended to conduct additional and more in-depth community informational sessions after the budget was approved by the General Assembly, as the budget law required a report from the Administration on the details of those community engagement efforts.
Moving forward, the Maryland Cannabis Administration will maintain a dedicated webpage on the agency’s website that details progress of the new search, information about the intended use of the facility, potential locations being contemplated, and updates for community engagement, working closely with elected officials to host information sessions with community stakeholders and members of the public.
Q: Why did the original plan place this facility so close to a school?
A: The original plan was chosen because it is state-owned, centrally located, has pre-existing secure vaults, and required the least amount of renovation to become operational.
Upon further review of this project, and the selection of the Catonsville Armory site, Governor Moore concluded that the state should explore new options for its location.
The governor therefore directed the three agencies at the helm of this project—the Maryland Cannabis Administration, Maryland Department of General Services, and Maryland Economic Development Corporation—to conduct a new process and explore new locations for the project.
As part of their site review, the governor instructed the agencies to identify locations that are not within close proximity to residential communities and schools. The agencies will begin this new process immediately, conduct extensive community and stakeholder engagement, and work quickly to move the project forward.
Q: Is a few dollars for the state really worth the safety and wellbeing of this community?
A: The safety and security of Maryland’s communities is the top priority of the Moore-Miller
Administration. All cannabis facilities must comply with Maryland Cannabis Administration security regulations, available at cannabis.maryland.gov/pages/law.
Requirements include but are not limited to 24-hour security alarm systems that cover the facility’s entry points; any room holding cannabis; and locations where records are stored on- and off-site. Facility entry will be restricted to badge-access only and the security system will be continuously monitored.
The system must also possess other capabilities, including detection of smoke and fire; power loss detection; and mounted panic alarm devices. The system must also remain operational until the licensed premises no longer has cannabis of any sort on site and must be equipped with an auxiliary mode of power that can maintain operations for a minimum of 48 hours.
Maryland is proud to be home to the most equitable cannabis industry in the nation. As part of our ongoing effort to promote social equity in our state’s cannabis industry, we are committed to building a first-in-the-nation cannabis incubator that will support our social equity micro-licensees.
Through resource support and programming, the new facility will empower historically disadvantaged individuals and businesses to participate in the state’s burgeoning cannabis industry, which realized more than $1 billion in total sales in its first year.
Q: Is now really the time to be spending $7M on this project with the state in the midst of a fiscal crisis?
A: Maryland is proud to be home to the most equitable cannabis industry in the nation. As part of our ongoing effort to promote social equity in our state’s cannabis industry, we are committed to building a first-in-the-nation cannabis incubator that will support our social equity micro-licensees.
Through resource support and programming, the new facility will empower historically disadvantaged individuals and businesses to participate in the state’s burgeoning cannabis industry, which realized more than $1 billion in total sales in its first year.
