Md. Code Regs. 14.17.17.06

Current through Register Vol. 51, No. 24, December 2, 2024

Section 14.17.17.06 - Disposition of a Cannabis License

A. A receiver appointed under this chapter shall initiate and oversee the orderly disposition of a license and associated business assets in accordance with a disposition of license plan submitted to the Administration that includes:

(1) A detailed description of the plan for the orderly disposition of the license and associated business assets; and

(2) A proposed timeline for the orderly disposition of the license of the associated licensed grower, processor, or dispensary.

B. Notification. A receiver shall:

(1) Issue public notice of the method, manner, time, place, and other terms of the disposition in a newspaper of general circulation in the jurisdiction in which the licensee is located and authorized to do business at least 60 days prior to the planned disposition, including the following information in clear, bold type:

(a) Name and contact information of the secured creditor;

(b) Name of licensee, and doing business as (d/b/a) or trade name, if applicable;

(c) License number;

(d) License classification;

(e) Date, time, and location of planned disposition;

(f) Deadline for obtaining pre-approval from the Administration to qualify as an eligible bidder at the planned disposition; and

(g) Terms and conditions imposed by the secured creditor on the disposition process and on the successful bidder; and

(2) Provide a copy of the information in §B(1) of this regulation to the Administration for the purpose of posting on the Administration's website.

C. To qualify as an eligible bidder seeking to obtain the cannabis license, an individual, or in the case of an entity, each individual who would acquire an ownership interest of 5 percent or more of the cannabis license that is the subject of the disposition, shall provide the following information to the Administration not later than 30 days before the deadline for obtaining Administration approval to qualify as a bidder at the planned disposition of the license:

(1) Name and contact information;

(2) Criminal history record information;

(3) Completed ownership and control attestation form provided by the Administration for each individual who intends to hold an ownership interest of 5 percent or more;

(4) Evidence of immediately available financial resources sufficient to pay the deposit at the planned disposition and to close the transaction within 10 days of the ratified and final disposition;

(5) Demonstration that the bidder meets all material requirements for licensure; and

(6) Any additional information requested by the Administration.

D. Process for Final Disposition.

(1) Upon completion of the planned disposition, the successful bidder shall prepare and submit to the Administration, within 3 days after the conclusion of the planned disposition, the necessary documentation to obtain final approval for the transfer and sale of the license, including a completed request to transfer ownership of a cannabis license provided by the Administration.

(2) Upon receipt of final approval of the transfer and sale of the license by the Administration, the disposition shall be considered ratified and final.

E. To facilitate the orderly disposition of a secured license and associated assets, the provisions set forth in Alcoholic Beverages and Cannabis Article, §36-503, Annotated Code of Maryland, do not apply to the sale or transfer of the license pursuant to this chapter.

F. Notwithstanding §E of this regulation, the sale or transfer of a license in accordance with this chapter shall be conducted in good faith, and the provisions of this chapter may not be used as a mechanism to circumvent the sale or transfer of ownership requirements under Alcoholic Beverages and Cannabis Article, §36-503, Annotated Code of Maryland.

G. All cannabis, as defined in Alcoholic Beverages and Cannabis Article, §36-101, Annotated Code of Maryland, shall be disposed of in accordance with this subtitle and Alcoholic Beverages and Cannabis Article, Title 36, Annotated Code of Maryland.

H. Termination of Receivership.

(1) Upon ratified and final disposition of the cannabis license and associated assets:

(a) The receivership terminates; and

(b) The receiver shall be immediately released of any responsibility associated with the receivership, and from liability for any actions or omissions that occur after the termination of the receivership.

(2) Nothing in this regulation shall be construed as limiting the liability of the receiver for any actions or omissions that occurred during the period that the receivership was in effect.

Md. Code Regs. 14.17.17.06

Regulation .06 adopted effective 50:14 Md. R. 559, eff. 7/1/2023 (EMERGENCY); adopted effective 51:14 Md. R. 676, eff. 6/7/2024, exp. 8/31/2024 (Emergency); adopted effective 51:14 Md. R. 678, eff. 7/22/2024.