The Appellate Court of Maryland reversed a lower court’s injunction on September 9, 2025, allowing the state to enforce licensing requirements under the Cannabis Reform Act for sellers of hemp-derived psychoactive products. In the case Governor Wes Moore et al. v. Maryland Hemp Coalition et al., the court ruled that these products, including delta-8 and delta-10 THC items, have always been illegal in Maryland despite prior lax enforcement. The decision permits the Maryland Cannabis Administration to regulate such products alongside traditional cannabis, ensuring compliance with safety standards.
The ruling stemmed from a challenge filed in the Circuit Court for Washington County in July 2023. The Maryland Hemp Coalition, comprising retailers, producers, farmers, and consumers, sought to block enforcement of Alcoholic Beverages and Cannabis Article Section 36-1102, which mandates licenses for selling products with more than 0.5 milligrams of THC per serving or 2.5 milligrams per package. The coalition argued the act created an unconstitutional monopoly under Article 41 of the Maryland Declaration of Rights, violated equal protection under Article 24, and was preempted by federal law. The circuit court granted a preliminary injunction in part, halting enforcement against pre-existing hemp sellers but allowing new cannabis licenses to proceed.
On appeal, the Appellate Court found no likelihood of success for the coalition’s claims. It determined the Cannabis Reform Act satisfies exceptions to Article 41, as there is no common right to sell hemp-derived psychoactive products given their historical illegality under both state and federal statutes. The court noted federal uncertainty from the 2018 Farm Bill but clarified Maryland’s agricultural hemp laws never authorized psychoactive derivatives. It also rejected preemption, confirming Maryland submitted a hemp plan to the U.S. Department of Agriculture in 2020. Under Article 24, the act’s social equity provisions rationally address past harms from drug enforcement.
Enacted following a 2022 constitutional amendment approved by voters, the Cannabis Reform Act legalizes adult cannabis use while establishing a regulated market. Passed in two phases—2022 Md. Laws ch. 26 and 2023 Md. Laws ch. 254—the law prohibits synthetic psychoactive products and requires licenses for growers, processors, and dispensers. It caps licenses, such as 300 for standard dispensaries, to prevent market oversaturation and ensure oversight. Social equity applicants, defined by residence or education in areas with high cannabis possession charges or low-income indicators, receive priority in initial rounds to remedy disparities.
The act’s implementation has generated substantial revenue. In the second quarter of 2025, Maryland collected $18.4 million in cannabis taxes, with a 9 percent sales and use tax on adult-use products. Funds support community reinvestment, public health initiatives, and equity programs. A biannual study mandated by Health-General Article Section 13-4401(c) tracks usage trends, reporting in March 2025 that adult cannabis consumption stabilized post-legalization, with emphasis on preventing youth access.
For Southern Maryland residents in Calvert, Charles, and St. Mary’s counties, the decision reinforces a structured market. Local tax allocations fund initiatives in disproportionately impacted areas, addressing historical enforcement biases. The Comptroller’s Office reported $3.2 million directed to such communities statewide in the recent quarter, aiding reintegration for those affected by prior convictions. Businesses must now obtain licenses through lotteries or market demand assessments, with fees starting at $1,000 for micro-growers.
Prior to the act, hemp cultivation was legalized in 2019 via Criminal Law Section 5-101(e-1)(2), but psychoactive derivatives remained prohibited. The 2018 federal Farm Bill excluded hemp from marijuana definitions yet created regulatory gaps, leading to unregulated sales. Maryland’s response aligns with federal non-enforcement policies under the Controlled Substances Act, as outlined in U.S. Department of Justice memos.
The court’s opinion emphasized the act’s public health focus, including potency limits and testing to curb risks like impaired driving. It dismissed claims of arbitrariness in zip code-based equity designations, noting they rationally target high-charge areas. Future rounds may adjust based on disparity studies, ensuring ongoing equity.
This ruling clears the path for full enforcement, with the Maryland Cannabis Administration overseeing compliance. As of September 2025, over 400 licenses have been issued statewide, fostering a market projected to exceed $1 billion annually by 2026.
