Cannabinoid beverage sales via local permits

Summary#

SB-1008, “Alcohol and Cannabis – Cannabinoid Beverages Off-Premises Sales Permit – Establishment,” would amend Maryland’s Alcoholic Beverages and Cannabis Article and Tax-General Article. It would create a local permit for certain off-premises sales of cannabinoid beverages; the stated goal is to establish that permit and rules for distributing and taxing the beverages.

  • A local licensing board may issue a permit to a holder of an alcoholic-beverage license with an off-sale privilege—but only where the board has adopted regulations allowing delivery of the beverages.
  • A permit would allow sales to people aged 21 or older for off-premises consumption. Sales hours would match the underlying license; the local board would set the permit term.
  • A Class 1 wholesaler could acquire cannabinoid beverages from a licensed cannabis processor and deliver them to permitted alcohol-license holders.
  • The bill defines a cannabinoid beverage as a single-serving beverage with no more than 5 milligrams of THC per serving, made by a licensed cannabis business and meeting testing, packaging, and labeling standards.
  • Cannabis tracking would end when the processor conveys a beverage to the wholesaler. Once the wholesaler takes possession, enforcement authority over the beverage would transfer to the Executive Director.
  • Sales tax collected from cannabinoid-beverage sales would go to the State General Fund. The bill exempts sales between a cannabis business and a Class 1 wholesaler, and between that wholesaler and a permitted retailer.

What it means for you#

  • Alcohol retailers: If your jurisdiction’s licensing board adopts the required regulations and issues you a permit, you could sell qualifying cannabinoid beverages to customers aged 21 or older for consumption away from your premises. The bill does not require a board to adopt regulations or issue a permit.
  • Cannabis processors and wholesalers: Processors could supply the beverages to Class 1 wholesalers. Those wholesalers could deliver them only to alcohol-license holders with the required permit.
  • Customers: You could buy qualifying drinks for off-premises consumption at permitted retailers. The bill does not set a separate sales schedule; the retailer’s underlying license hours would apply.
  • Other businesses and the public: The bill does not change the rules for other cannabis products or create a new statewide retail program. It is listed as introduced; it would not change the law unless enacted.

Money#

No publicly available information on estimated public costs or revenue effects.

  • The bill authorizes existing Class 1 wholesalers to handle these beverages. It does not state a new permit fee or estimate the cost of local administration or enforcement.
  • The sales tax rate provision remains 12% for fiscal year 2026 and later; the bill directs tax collected on cannabinoid-beverage sales to the State General Fund.
  • The bill exempts the specified transfers between cannabis businesses, wholesalers, and permitted retailers from sales and use tax. It does not estimate the effect on tax revenue.

What is unclear#

  • What regulations local boards would need to adopt, and how many jurisdictions would do so, are not specified.
  • The bill does not set application steps, permit criteria, renewal rules, appeals, or a permit fee.
  • It does not spell out how local boards and the Executive Director would coordinate oversight after enforcement authority transfers to the Executive Director.
  • The bill does not explain how the new sales channel would interact with other existing cannabis sales rules.

Case for#

  • The bill appears intended to create another legal retail channel for a narrowly defined product, while limiting sales to licensed alcohol retailers with a permit.
  • A possible argument for the bill is that using existing alcohol licenses and wholesalers could provide a defined distribution route rather than creating a separate retail system.
  • The 21-and-older limit and product testing, packaging, and labeling standards are safeguards built into the bill.

Case against#

  • One concern is that availability would depend on local board decisions, so the permit system could differ across jurisdictions.
  • The bill does not explain the permit application process, decision standards, or appeals, leaving important rules to local boards.
  • A possible trade-off is that enforcement authority changes hands when a wholesaler takes possession, but the bill does not describe how that transfer would work in practice.
  • The bill does not provide cost estimates for local administration, enforcement, or changes to wholesaler operations.