Cranking out joints, edibles and more, firms race to meet demand for legal weed

Jun 29, 2023

JESSUP — Tucked at the back of an industrial park shared with a spice company, the thick summer air outside Verano’s humming two-story production warehouse smells faintly like cinnamon, cumin and cannabis.

Inside, cannabis production has tripled.
The plant’s sticky flowers are pressed into joints rolled by machinery, distilled into tinctures, pressurized into vapor cartridges, and cooked into gummies, caramels and a line of edibles — all labeled, as required, with a little red marijuana leaf sticker and the words “THC MARYLAND.”
The massive expansion aims to help meet the surge in demand expected when recreational marijuana use becomes legal in Maryland for people 21 and older on Saturday.
Growers, processors and dispensaries in the medical market formerly provided cannabis to roughly 162,800 patients statewide to treat conditions like chronic pain, post-traumatic stress disorder and severe nausea from cancer treatment. State officials expect those businesses will gain millions of recreational customers.
Verano, one of Maryland’s first medical cannabis companies, has shut down its on-site dispensary and moved it to Elkridge to make production space to prepare for July 1, when the state becomes the only in the region with a full-fledged adult-use cannabis market.
“Five years ago, this industry didn’t exist,” Verano President Darren Weiss as he played tour guide at the company’s facility in Howard County. “Think what you will about whether or not you’d like to use cannabis. But it’s hard to argue economic development and jobs.”
State legislators moved fast to create a regulatory structure for the industry before the July 1 deadline after Marylanders voted overwhelmingly to legalize recreational cannabis last November. State lawmakers grappled with stamping out black market sales before they start and reducing racial disparities, deciding to launch the industry with the medical marijuana industry that has been criticized as lacking diversity. A more diverse set of owners are expected to enter the market a year from now, though industry observers acknowledge it will be far more challenging for businesses to break in later.
State regulators estimate the adult-use industry will generate as much as $600 million in first year sales, bring in $54 million in revenue from licensing fees and taxes, with about $19.7 million going to the Cannabis Public Health Fund, Cannabis Business Assistance Fund, Community Reinvestment and Repair Fund, and to county and state budgets. Consultants hired to analyze demand for the state estimated Maryland needs at least 300 dispensaries to keep up; the state’s current medical marijuana firms run about 100 storefronts.
On top of the demand from residents, state officials and business leaders expect to see plenty of people crossing state lines to buy weed because nearby states like Pennsylvania and Virginia have either not legalized recreational consumption or have failed to set up a legal market that provides easy legal access to the drug.
“I suspect that Maryland will enjoy its neighbors’ consumption of Maryland’s adult-use products,” said Jeremy Unruh, senior vice president of public and regulatory affairs for PharmaCann, which runs two dispensaries, a processing facility and a grow operation in Maryland as well as marijuana companies in seven other states.
Unruh said the company is expanding floor space in its dispensaries in New Market and Westminster to make room for the flood of customers expected next month. Medical patients will still have priority access, he added, through designated medical-only hours and express lines so that people seeking the drug for medicinal purposes will not have to wait in long lines with casual consumers.
Recreational cannabis users can expect to see a wide array of products on dispensary shelves on Saturday, from dried flower to vape cartridges to a smorgasbord of candy-like edibles.
Roughly 45 percent of flower Verano grows is sold in its cured and dried form, including in pre-rolled joints. The rest goes into products created in Jessup, in a long window-lined room that evokes both Willy Wonka’s chocolate factory and a collegiate research lab. Chocolate churns through industrial vats, one milk chocolate, one dark. A chamber the size of a suburban walk-in closet holds canisters of compressed gas used to extract THC.
Weiss said Verano has transitioned from a medical to adult use market in about half a dozen states so far, with demand at the start of the launch showing a two- to five-fold spike before declining and plateauing. His company started ramping up for July’s launch a year ago, before voters’ overwhelming decision to join the 22 other states allowing adult sales.
“We were pretty sure it was going to pass,” Weiss said as he walked among rows and juvenile cannabis plants, stacked in tiered grow shelves and given whimsical names like “Berrylicious,” “Banana Muffins” or “Moonboots.”
The plants’ trademark five-fingered fronds swayed under bright LED lights, run 20-hours a day, and a carefully calibrated airflow meant to optimize growth. “You want to see them see dancing all the time,” Weiss explained.
Verano has ramped up staffing, attending weekly job fairs, as the entire medical marijuana industry prepares to welcome adult-use customers. Maryland lawmakers decided to launch the adult-use market using only companies selling medical marijuana products, concerned that if vetted and successful firms were not open on July 1, a bricks-and-mortar black market like the one proliferating in New York could take hold.
Getting the first-to-market advantage to establish brand loyalty is critical, Weiss said.
“It is one of the most important things in terms of your long-term success,” he said. “The brands that are able to come out early … are going to be the brands that stays around. It’s just not as easy for new brands to come into this market.”
Other business leaders in the industry agree that being first gives existing cannabis businesses an edge, including many that have been part of a trend of out-of-state operators consolidating Maryland’s market. The head start will establish customer loyalties and allow industry pioneers to scoop up the choicest parcels of commercial real estate before newcomers can even begin to build new companies, Unruh said.
“I think it is going to be hard in Maryland for new business to start,” Uhruh said.
But Uhruh said the approach Maryland took to swiftly establish an adult-use market will likely make marijuana easy to access and cheap in the state — two big boons for consumers and for the effort to quash a black market.
Will Tilburg, acting director at the Maryland Cannabis Administration,the regulatory agency tasked with monitoring the industry, said that was exactly the intent of the legislation passed earlier this year.
“The General Assembly was very concerned, I think appropriately so, of what happens when a state legalizes possession and use of something,” he said, “but does not provide access to legal, safe, tested products.”
Another top priority for state leaders was fixing disparities that existed in the medical marijuana industry, which did not have a single Black owner in the first round of licensing despite Black Marylanders making up more than 31 percent of the state’s population. Race was considered in a later round of licensing applications in 2019, which led to 14 minority-owned businesses being authorized for a license — though only half of those authorized businesses have been fully licensed thus far, Tilburg said.
You could read more of this Washington Post article here.