Emergency Action on Regulations

Symbol Key

• Roman type indicates text existing before emergency status was granted.

• Italic type indicates new text.

• [Single brackets] indicate deleted text.

Emergency Regulations

Under State Government Article, §10-111(b), Annotated Code of Maryland, an agency may petition the Joint Committee on Administrative, Executive, and Legislative Review (AELR), asking that the usual procedures for adopting regulations be set aside because emergency conditions exist. If the Committee approves the request, the regulations are given emergency status. Emergency status means that the regulations become effective immediately, or at a later time specified by the Committee. After the Committee has granted emergency status, the regulations are published in the next available issue of the Maryland Register. The approval of emergency status may be subject to one or more conditions, including a time limit. During the time the emergency status is in effect, the agency may adopt the regulations through the usual promulgation process. If the agency chooses not to adopt the regulations, the emergency status expires when the time limit on the emergency regulations ends. When emergency status expires, the text of the regulations reverts to its original language.

Title 14
INDEPENDENT AGENCIES

Subtitle 17 MARYLAND CANNABIS ADMINISTRATION

Notice of Emergency Action

[23-103-E]

The Joint Committee on Administrative, Executive, and Legislative Review has granted emergency status to:

(1) New Regulation .01 under a new chapter, COMAR 14.17.01 Definitions;

(2) New Regulations .01—.03 under a new chapter, COMAR 14.17.02 General Regulations;

(3) New Regulations .01—.04 under a new chapter, COMAR 14.17.03 Social Equity;

(4) New Regulations .01—.10 under a new chapter, COMAR 14.17.04 Medical Cannabis Program;

(5) New Regulations .01—.08 under a new chapter, COMAR 14.17.05 Application Process and Issuance of Licenses;

(6) New Regulations .01—.10 under a new chapter, COMAR 14.17.06 Standard Cannabis Licenses;

(7) New Regulations .01—.08 under a new chapter, COMAR 14.17.07 Micro Licenses;

(8) New Regulations .01—.07 under a new chapter, COMAR 14.17.08 Laboratory Registration and Operations;

(9) New Regulations .01—.05 under a new chapter, COMAR 14.17.09 Other Cannabis Businesses;

(10) New Regulations .01—.05 under a new chapter, COMAR 14.17.10 Cannabis Grower Operations;

(11) New Regulations .01—.07 under a new chapter, COMAR 14.17.11 Cannabis Processor Operations;

(12) New Regulations .01—.09 under a new chapter, COMAR 14.17.12 Cannabis Dispensary Operations;

(13) New Regulations .01—.11 under a new chapter, COMAR 14.17.13 Cannabis Products;

(14) New Regulations .01—.06 under a new chapter, COMAR 14.17.14 Complaints, Enforcement, Record Keeping, and Inspections of Cannabis Businesses;

(15) New Regulations .01—.06 under a new chapter, COMAR 14.17.15 Cannabis Business Agents;

(16) New Regulations .01—.05 under a new chapter, COMAR 14.17.16 Cannabis Business Owners;

(17) New Regulations .01—.08 under a new chapter, COMAR 14.17.17 Secured Creditors and Receivership;

(18) New Regulations .01—.08 under a new chapter, COMAR 14.17.18 Finished Product Packaging;

(19) New Regulations .01—.05 under a new chapter, COMAR 14.17.19 Cannabis Research;

(20) New Regulations .01—.02 under a new chapter, COMAR 14.17.20 Prohibited Acts;

(21) New Regulations .01—.02 under a new chapter, COMAR 14.17.21 Fees; and

(22) New Regulations .01—.12 under a new chapter, COMAR 14.17.22 Hearing Procedures.

Emergency status began: July 1, 2023.

Emergency status expires: June 30, 2024.

Estimate of Economic Impact

I. Summary of Economic Impact. In Fiscal Year (FY) 2024, this emergency action will have a $52,292,152 net positive economic impact on the Maryland Cannabis Administration budget. This amount represents revenue increases incurred through application and licensing fees collected from new growers, processors, and dispensaries, as well as tax revenue collected from cannabis sales, less statutorily mandated fund allocations and expenditures used for salaries and other operating expenses needed to implement the adult use cannabis market. $19,727,152 of this amount will be returned to the General Fund.

II. Types of Economic Impact.

Impacted Entity	Revenue (R+/R-) Expenditure (E+/E-)	Magnitude
A. On issuing agency:
(1) Maryland Cannabis Administration	(E+)	$14,545,696
(2) Maryland Cannabis Administration	(R+)	$66,837,848
B. On other State agencies:
(1) Maryland Department of Health	(E+)	$1,972,715
(2) Department of Commerce	(E+)	$1,972,715
C. On local governments:
Local jurisdictions	(E+)	$48,642,997

	Benefit (+) Cost (-)	Magnitude
D. On regulated industries or trade groups:
Cannabis businesses	(-)	$65,426,275
E. On other industries or trade groups:	NONE
F. Direct and indirect effects on public:	NONE

III. Assumptions. (Identified by Impact Letter and Number from Section II.)

A(1). Due to the additional staff and operational costs needed to support implementation, less retained fund balance, the Administration anticipates $14,545,696 in new expenditures. Note: The retained fund balance from the former Maryland Medical Cannabis Commission fund may offset FY 2024 expenses and increase subsequent General and Special Fund distribution.

A(2). The Administration is projecting $600M in first year adult use sales. According to statute, adult use cannabis sales are subject to a 9% tax rate. As such the Administration anticipates adult use sales will generate $54M in revenue.

In FY 2024, the Administration will solicit applications for first and second round licenses and will collect $32,200,000 in application fees.

The Administration anticipates the first round of licensure in January 2024 will yield 30 micro growers, 30 micro processors, 10 micro dispensaries, and four incubators. Due to the likelihood of delayed startup for new standard cannabis businesses, no new standard licensed cannabis businesses will be fully operational before the end of FY 2024. Therefore, the Administration will collect a total of $365,000 in license fees from operational micro licensees in FY 2024.

B(1). After the Administration’s costs are subtracted from the sales tax revenue, fifty percent of the remaining funds, or $19,727,152, will be distributed to certain funds. 5 percent ($1,972,7157) is allocated to the Cannabis Public Health Fund to be administered by the Maryland Department of Health.

B(2). After the Administration’s costs are subtracted from the sales tax revenue, fifty percent of the remaining funds, or $19,727,152, will be distributed to certain funds. 5 percent ($1,972,715) is allocated to the Cannabis Business Assistance Fund to be administered by the Maryland Department of Commerce.

C. After the Administration’s costs are subtracted from the sales tax revenue, fifty percent of the remaining funds, or $19,727,152, will be distributed to certain funds. 35 percent plus the revenue from conversion fees, as discussed below ($13,809,006 + $32,861,275) is allocated to the Community Reinvestment and Repair Fund to be administered to local jurisdictions by the Comptroller. An additional 5 percent ($1,972,715) will also be allocated to local jurisdictions.

All currently licensed medical cannabis businesses will convert to licenses to operate medical and adult use cannabis businesses. The Administration will collect license conversion fees from these businesses, which include 18 growers, 17 processors, and 97 dispensaries. Standard license conversion fees are based on Calendar Year (CY) 2022 total gross revenue. Growers and processors are charged 10% of CY 2022 total gross revenue, and dispensaries are charged 8% of CY 2022 total gross revenue. The amount of any licensing or renewal fee paid by a business in FY 2023 will be credited against the amount of the conversion fee due. The Administration will allow businesses to pay in four installments over a period of 18 months. If all businesses elect this option, the Administration will collect $32,861,275 of a total $65,722,550 from existing businesses during FY 24 and remit that amount to the Community Reinvestment and Repair Fund.

D. All currently licensed medical cannabis businesses will convert to licenses to operate medical and adult use cannabis businesses. The Administration will collect license conversion fees from these businesses, which include 18 growers, 17 processors, and 97 dispensaries. Standard license conversion fees are based on Calendar Year (CY) 2022 total gross revenue. Growers and processors are charged 10% of CY 2022 total gross revenue, and dispensaries are charged 8% of CY 2022 total gross revenue. The amount of any licensing or renewal fee paid by a business in FY 2023 will be credited against the amount of the conversion fee due. The Administration will allow businesses to pay in four installments over a period of 18 months. If all businesses elect this option, the Administration will collect $32,861,275 of a total $65,722,550 from existing businesses during FY 24.

In FY 2024, the Administration will solicit applications for first and second round licenses and will collect $32,200,000 in application fees.

Economic Impact on Small Businesses

The emergency action has a meaningful economic impact on small businesses. An analysis of this economic impact follows.

Approximately half of cannabis business licensees, or 57 licensees, qualify as small businesses. This represents half of licensed businesses. To the extent small businesses participate in the Maryland cannabis industry, they will share in the revenue from newly legal adult use sales. They will also be subject to the various requirements for businesses in this industry, including conversion and license fees.

14.17.01 Definitions

Authority: Alcoholic Beverages and Cannabis Article, §36-101, Annotated Code of Maryland

.01 Definitions.

A. In this subtitle, the following terms have the meanings indicated.

B. Terms Defined.

(1) “Administration” means the Maryland Cannabis Administration established under Alcoholic Beverages and Cannabis Article, §36-201, Annotated Code of Maryland.

(2) “Advisory Council” means the Cannabis Public Health Advisory Council established under Health-General Article, §13–4502, Annotated Code of Maryland.

(3) “Agent” means an employee, a volunteer, or any other authorized person who acts for or at the direction of a cannabis licensee or cannabis registrant.

(4) “Ancillary business” means a business that is registered with the Administration to deliver, transport, or dispose of cannabis or green waste or provide security guard services to a cannabis licensee.

(5) Cannabis.

(a) “Cannabis” means the plant cannabis sativa l. and any part of the plant, including all non-synthetically derived, extracts, cannabinoids, isomers, acids, salts, and salts of isomers, whether growing or not, with a delta–9–tetrahydrocannabinol concentration greater than 0.3 percent on a dry weight basis.

(b) “Cannabis” includes cannabis products.

(c) “Cannabis” does not include hemp or hemp products, as defined in the Agriculture Article, §14–101, Annotated Code of Maryland.

(6) Cannabis Product.

(a) “Cannabis product” means a product that is composed of cannabis, cannabis concentrate, cannabis extract, or any other ingredient and is intended for use or consumption.

(b) “Cannabis product” includes any product produced and regulated under this subtitle, including:

(i) Cannabis vaporizing devices;

(ii) Concentrated cannabis products;

(iii) Edible cannabis products; and

(iv) Usable cannabis products.

(c) “Cannabis product” does not include a home cultivation product.

(7) Cannabis Vaporizing Device.

(a) “Cannabis vaporizing device” means a device that can be used to deliver aerosolized or vaporized cannabis or cannabis products to an individual inhaling from the device.

(b) “Cannabis vaporizing device” includes:

(i) A vape pen;

(ii) Vaping liquid; and

(iii) Any component, part, or accessory of such a device regardless of whether it is sold separately, including a concentrated or infused cannabis liquid, for the purposes of heating and producing a vapor.

(8) Canopy.

(a) “Canopy” means the total square footage of space used by a licensee to produce flowering cannabis plants.

(b) “Canopy” includes each layer of flowering cannabis plants grown on any rack or shelving.

(c) “Canopy” does not include square footage used for:

(i) Mother stock;

(ii) Propagation;

(iii) Immature or nonflowering plants;

(iv) Processing;

(v) Drying;

(vi) Curing;

(vii) Trimming;

(viii) Storage;

(ix) Offices;

(x) Hallways;

(xi) Pathways;

(xii) Work areas; or

(xiii) Other administrative and nonproduction uses.

(9) “Capsules” means a solid preparation containing a single serving of tetrahydrocannabinol or other cannabinoid that:

(a) Is intended to be swallowed whole;

(b) Not formulated to be chewable, dispersible, effervescent, orally disintegrating, used as a suspension, or consumed in a manner other than swallowed whole; and

(c) Does not contain any added natural or artificial flavor or sweetener.

(10) Caregiver.

(a) “Caregiver” means an individual who has agreed to assist with a qualifying patient’s medical use of cannabis.

(b) “Caregiver” means, for a qualifying patient younger than 18 years old:

(i) A parent or legal guardian; and

(ii) Not more than two additional adults designated by the parent or legal guardian.

(c) “Caregiver” does not include any designated school personnel authorized to administer medical cannabis to a student in accordance with the guidelines established under Education Article, §7-446, Annotated Code of Maryland.

(11) “Certifying provider” has the meaning stated in Alcoholic Beverages and Cannabis Article, §36-101, Annotated Code of Maryland.

(12) Concentrated Cannabis Product.

(a) “Concentrated cannabis product” means a product derived from cannabis that has undergone a process to concentrate one or more active cannabinoids.

(b) “Concentrated cannabis product” includes:

(i) Kief;

(ii) Hashish;

(iii) Bubble hash;

(iv) Oil;

(v) Wax;

(vi) Shatter;

(vii) Resin; or

(viii) Any other product produced by extracting cannabinoids from the plant using solvents, carbon dioxide, heat, screens, presses or steam distillation.

(c) “Concentrated cannabis product” does not include any cannabis vaporizing device as defined in this regulation.

(13) “Conditional license” means a temporary preapproval for a cannabis license issued pending satisfactory completion of the requirements for licensing under COMAR 14.17.05.

(14) “Consumer” means an individual 21 years old or older who purchases cannabis or a cannabis product from a licensed dispensary or on-site consumption establishment.

(15) Control.

(a) “Control” means:

(i) The decision-making authority over the management, operations, or policies that either guide a business or guide authority over the operation of the technical aspects of a business; or

(ii) Authority over the operation of the technical aspects of the business.

(b) “Control” includes:

(i) Holding a right to veto significant events;

(ii) The right or authority to make or veto decisions regarding operations and strategic planning, capital allocations, acquisitions, and divestments;

(iii) The right or authority to appoint or remove directors, corporate-level officers, or their equivalent;

(iv) The right or authority to make major marketing, production, and financial decisions; and

(v) The right or authority to execute exclusive contracts or significant contracts in the aggregate of $10,000 or greater on behalf of the licensee.

(16) “Clinical director” means an individual who:

(a) Is appointed by a licensed dispensary to provide information on medical cannabis to qualifying patients, registered caregivers, and dispensary agents;

(b) Meets the requirements of COMAR 14.17.04.09; and

(c) Is registered with the Administration.

(17) “Criminal history record check” means a State and national criminal history records check in accordance with Alcoholic Beverages and Cannabis Article, §36-505, Annotated Code of Maryland.

(18) “Delivery service” means a licensee authorized to deliver cannabis in accordance with a micro license to operate a dispensary.

(19) Dispensary.

(a) “Dispensary” means an entity licensed under this title that acquires, possesses, repackages, transports, sells, distributes, or dispenses cannabis or cannabis products, including tinctures, aerosols, oils, and ointments, related supplies, and educational materials for use by qualifying patients, caregivers, or consumers through a storefront or through a delivery service, based on license type.

(b) “Dispensary” includes standard and micro license types.

(20) “Disproportionately impacted area” means a geographic area identified by the Office of Social Equity that has had above 150 percent of the State’s 10-year average for cannabis possession charges.

(21) Edible Cannabis Product.

(a) “Edible cannabis product” means a cannabis product intended for human consumption by oral ingestion, in whole or in part.

(b) “Edible cannabis product” includes a cannabis product that dissolves or disintegrates in the mouth.

(c) “Edible cannabis product” does not include any concentrated cannabis products, infused non-edible cannabis products, or capsules or tinctures that do not contain any food or food ingredients.

(22) “Green waste” means unauthorized, misbranded, contaminated, unused, surplus, returned, or out-of-date cannabis or product containing cannabis.

(23) Grower.

(a) “Grower” means an entity licensed under Alcoholic Beverages and Cannabis Article, §36-401, Annotated Code of Maryland, that cultivates or packages cannabis and is authorized by the Administration to provide cannabis to other licensees and registered independent testing laboratories.

(b) “Grower” includes standard and micro license types.

(24) High Potency Product.

(a) “High potency product” means a product that exceeds the maximum potency for consumers, as established by the Administration, and may only be sold or distributed to a qualifying patient or registered caregiver.

(b) “High Potency Product” includes:

(i) A concentrated cannabis product; and

(ii) An edible cannabis product, capsule, tincture, or infused non-edible product that exceeds 10 milligrams THC per serving or 100 milligrams THC per package.

(25) Home Cultivation Product.

(a) “Home cultivation product” means the clones, seeds, seedlings, stalks, roots, and stems of the cannabis plant for home cultivation.

(b) “Home cultivation product” does not include any plant that is:

(i) Wider than 6 inches;

(ii) Taller than 6 inches; or

(iii) Otherwise in a vegetative or flowering state.

(26) “Incubator space” means a facility where a micro licensee may operate in accordance with Alcoholic Beverages and Cannabis Article, §36-406, Annotated Code of Maryland.

(27) “Independent testing laboratory” means a facility, entity or site that is:

(a) Registered with the Administration to perform tests on cannabis or cannabis products;

(b) Independent of any entity licensed under Alcoholic Beverages and Cannabis Article, §36-401, Annotated Code of Maryland, to grow, process or dispense cannabis; and

(c) Accredited as operating to International Organization for Standardization (ISO) standard 17025 by an accreditation body:

(i) Operating in accordance with ISO standard ISO/IEC 17011; and

(ii) That is a signatory to the International Laboratory Accreditation Cooperation (ILAC) Mutual Recognition Arrangement (MRA).

(28) “Infused non-edible cannabis product” means ointment, salve, suppository, dermal patch, cartridge, or any other product containing cannabis that has been processed so that the dried leaves and flowers are integrated into other material that is not intended for human consumption by oral ingestion.

(29) “Law enforcement agency” means a governmental police force, sheriff’s office, security force, or law enforcement organization of the State, a county, or a municipal corporation that by statute, ordinance, or common law is authorized to enforce the general criminal laws of the State.

(30) Licensee.

(a) “Licensee” means a business licensed by the Administration in accordance with Alcoholic Beverages and Cannabis Article, §36-401, Annotated Code of Maryland.

(b) “Licensee” includes any:

(i) Micro grower;

(ii) Micro processor;

(iii) Micro dispensary;

(iv) Standard grower;

(v) Standard processor;

(vi) Standard dispensary;

(vii) Incubator space; and

(viii) On-site consumption establishment.

(31) Liquid Edible Product.

(a) “Liquid edible product” means an edible cannabis product that is a liquid beverage or liquid food-based product for which the intended use is oral consumption.

(b) “Liquid edible product” excludes a tincture as defined in this section.

(32) “Micro license” means a license to operate a cannabis business that does not exceed the limits established in Alcoholic Beverages and Cannabis Article, §36-401(c)(2), Annotated Code of Maryland.

(33) “On-site consumption establishment” means an entity licensed by the Administration to distribute cannabis or cannabis products for on-site consumption other than by smoking indoors.

(34) “Owner” means a person with an ownership interest in a cannabis license.

(35) “Ownership interest” means a direct or indirect equity interest in a cannabis license, including in its shares or stock.

(36) “Passive investor” means an individual or an entity that:

(a) Holds an aggregate ownership interest of less than 5 percent in a cannabis licensee; and

(b) Does not have control of the cannabis licensee.

(37) “Personal use amount” means an amount of:

(a) Cannabis that does not exceed 1.5 ounces;

(b) Concentrated cannabis that does not exceed 12 grams;

(c) Cannabis products containing no more than 750 milligrams of delta-9-tetrahydrocannabinol;or

(d) Two or fewer cannabis plants.

(38) “Principal officer” means a board member, a president, a vice president, a secretary, a treasurer, a partner, an officer, a managing member, or any other individual with a profit sharing, financial interest, or revenue sharing arrangement, including an individual with the authority to control a cannabis license.

(39) “Processing” means the manufacture of usable cannabis into a cannabis concentrate or manufacture of a cannabis-infused product.

(40) Processor.

(a) “Processor” means an entity licensed by the Administration in accordance with Alcoholic Beverages and Cannabis Article, §36-401, Annotated Code of Maryland, that:

(i) Transforms cannabis into another product, or an extract, and packages and labels the cannabis product; and

(ii) Is authorized by the Administration to provide cannabis to licensed dispensaries and registered independent testing laboratories.

(b) “Processor” includes standard and micro license types.

(41) “Qualifying patient” means an individual who:

(a) Has been provided with a valid written certification by a certifying provider in accordance with a bona fide provider–patient relationship; and

(b) If younger than 18 years old, has a caregiver.

(42) Registrant.

(a) “Registrant” means a business registered by the Administration to operate in the cannabis industry.

(b) “Registrant” includes:

(i) Independent testing laboratories;

(ii) Transporter businesses;

(iii) Security guard company; and

(iv) Waste disposal company.

(43) “Seed-to-sale tracking system” means a software system procured by the Administration that tracks cannabis from either the seed or immature plant stage, until the cannabis is sold to a patient, caregiver, or consumer.

(44) Serious Adverse Event.

(a) “Serious adverse event” means an undesirable experience associated with the use of cannabis where the outcome was death, life-threatening, hospitalization, disability or permanent damage, congenital anomaly or birth defect or any other important medical event.

(b) “Serious adverse event” includes an experience that required intervention to prevent permanent impairment or damage.

(45) “Social equity applicant” means an applicant for a cannabis license or cannabis registration that:

(a) Has at least 65 percent ownership and control held by one or more individuals who:

(i) Have lived in a disproportionately impacted area for at least 5 of the 10 years immediately preceding the submission of the application;

(ii) Attended a public school in a disproportionately impacted area for at least 5 years; or

(iii) For at least 2 years, attended a 4-year institution of higher education in the State where at least 40 percent of the individuals who attend the institution of higher education are eligible for a Pell Grant; or

(b) Meets any other criteria established by the Administration.

(46) Social Equity Licensee.

(a) “Social equity licensee” means a social equity applicant who has been awarded a cannabis license.

(b) “Social equity licensee” includes a grower, processor, or dispensary that:

(i) Held a Stage One Preapproval for a license before October 1, 2022; and

(ii) Was not operational before October 1, 2022.

(47) “Social Equity Partnership Grant” means a program within the Office of Social Equity that awards grants to promote qualifying partnerships between operational licensees and social equity licensees.

(48) “Standard license” means a license to operate a cannabis business that complies with the limits established in Alcoholic Beverages and Cannabis Article, §36-401(c)(1), Annotated Code of Maryland.

(49) “State cannabis testing laboratory” means a laboratory operated by the Administration in accordance with Alcoholic Beverages and Cannabis Article, §36-204, Annotated Code of Maryland.

(50) “Tetrahydrocannabinol” or “THC”, unless otherwise specified, means any:

(a) Tetrahydrocannabinol, including delta-8-tetrahydrocannabinol, delta-9-tetrahydrocannabinol, and delta-10-tetrahydrocannabinol, regardless of how derived;

(b) Other cannabinoid, other than cannabidiol that the Administration determines to cause intoxication; and

(c) Other chemically similar compound, substance, derivative, or isomer of tetrahydrocannabinol, as identified by the Administration.

(51) “Tincture” means a solution that is:

(a) Dissolved in alcohol, glycerin, or vegetable oil; and

(b) Distributed in a dropper bottle of four ounces or less.

(52) Usable Cannabis.

(a) “Usable cannabis” means the dried leaves and flowers of the cannabis plant.

(b) “Usable cannabis” does not include seedlings, seeds, stems, stalks, or roots of the plant or the weight of any noncannabis ingredients combined with cannabis, such as ingredients added to prepare a topical administration.

(53) Usable Cannabis Product.

(a) “Usable cannabis product” means a prepackaged product containing usable cannabis.

(b) “Usable cannabis product” includes:

(i) A pre-rolled amount of usable cannabis;

(ii) Securely stored, sealed, and labeled amount of usable cannabis; and

(iii) Any other type or amount of usable cannabis that has been wrapped, rolled, or otherwise encased for the purposes of smoking.

(54) “Written certification” means a certification that:

(a) Is issued by a certifying provider to a qualifying patient with whom the provider has a bona fide provider–patient relationship;

(b) Includes a written statement certifying that, in the certifying provider’s professional opinion, after having completed an assessment of the patient’s medical history and current medical condition, the patient has a condition:

(i) That meets the inclusion criteria and does not meet the exclusion criteria of the certifying provider’s application; and

(ii) For which the potential benefits of the medical use of cannabis would likely outweigh the health risks for the patient; and

(c) May include a written statement certifying that, in the certifying provider’s professional opinion, a 30–day supply of medical cannabis would be inadequate to meet the medical needs of the qualifying patient.

14.17.02 General Regulations

Authority: Alcoholic Beverages and Cannabis Article, §§36-201, 36-401, and 36-403, Annotated Code of Maryland

.01 Succession of the Maryland Medical Cannabis Commission.

A. The Maryland Cannabis Administration is the successor entity to the Natalie M. LaPrade Medical Cannabis Commission.

B. The Maryland Cannabis Administration has the authority of the Natalie M. LaPrade Medical Cannabis Commission set forth in COMAR 10.62.01—10.62.37.

C. Any bulletin, final order, notice of violation, or formal changes issued by the Natalie M. LaPrade Medical Cannabis Commission remains valid and stands as authorized by the Maryland Cannabis Administration.

D. Except as otherwise provided in this subtitle or Alcoholic Beverages and Cannabis Article, Title 36, Annotated Code of Maryland, a registration issued by the Natalie M. LaPrade Medical Cannabis Commission shall be valid until the stated expiration date for each:

(1) Patient or caregiver;

(2) Certifying provider;

(3) Clinical director;

(4) Agent;

(5) Independent testing laboratory; and

(6) Other ancillary business registrations.

E. This subtitle shall be considered supplemental to the Maryland Medical Cannabis Commission regulations set forth in COMAR 10.62.01—10.62.37.

F. If any regulation in COMAR 10.62.01—10.62.37 conflicts or is inconsistent with any regulations in this subtitle, this subtitle prevails.

G. The Maryland Cannabis Administration may rescind, revoke, correct, or reissue any bulletin, final order, notice of violation, or formal changes issued by the Natalie M. LaPrade Medical Cannabis Commission.

.02 Single Supply Chain for Cannabis Products.

Except as otherwise provided in this subtitle, all cannabis grown, harvested, processed, transported, delivered, produced, manufactured, or sold in Maryland shall follow the regulations in this subtitle.

.03 Conversion of Medical Cannabis License.

A. This regulation applies to each licensee required to pay a conversion fee under Alcoholic Beverages and Cannabis Article, §36-403, Annotated Code of Maryland.

B. The conversion fee shall be based on the gross revenue of a licensee and calculated by the Administration using the State’s seed-to-sale tracking system for calendar year 2022.

C. Licensees choosing to convert their license shall, on or before July 1, 2023:

(1) Pay the conversion fee as calculated by the Administration in full; or

(2) Enter into a payment plan with the Administration.

D. The payment plan under §C(2) of this regulation shall establish:

(1) The conversion fee as calculated by the Administration;

(2) The exact payment amount required under each payment installment; and

(3) Payment due dates as directed by the Administration for four equal payment installments over an 18-month period.

E. On or before January 1, 2025, a licensee shall pay the installment payment in full in accordance with §D of this regulation.

F. A licensee that does not meet a payment deadline is subject to:

(1) An administrative hold on their ability to transfer cannabis or cannabis products to another licensee or distribute or dispense cannabis or cannabis products to a qualifying patient, registered caregiver, or consumer until payment is remitted to the Administration; and

(2) After a period of 30 days, license suspension or revocation.

G. A converted license shall be valid for a period of 5 years, beginning on July 1, 2023.

H. A converted license is not transferrable prior to July 1, 2028, except as provided under Alcoholic Beverages and Cannabis Article, §36-503, Annotated Code of Maryland.

I. A licensee may not register with the State Department of Assessment and Taxation using a legal name that:

(1) Uses the terms “cannabis”, “marijuana”, or other synonym related to controlled substances;

(2) Suggests the use of cannabis as an intoxicant; or

(3) Incorporates any copyrighted material or trademark or service mark attributable to another entity.

14.17.03 Social Equity

Authority: Alcoholic Beverages and Cannabis Article, §1-309.1, Annotated Code of Maryland

.01 Scope.

A. This chapter applies to the Office of Social Equity, an independent office that functions within the Maryland Cannabis Administration, whose mission is to promote and encourage participation in the regulated cannabis industry by people from communities that have previously been disproportionately impacted by the war on drugs.

.02 Definitions.

A. In this chapter, the following terms have the meanings indicated:

B. Terms Defined.

(1) “Operational cannabis licensee” means a licensee that was operational prior to October 1, 2022.

(2) “Qualifying partnership” means a meaningful partnership between a social equity licensee and an operational cannabis licensee that supports or advises the social equity licensee.

.03 Social Equity Partnership Grant Program.

A. The Social Equity Partnership Grant Program shall promote qualifying partnerships between operational cannabis licensees and social equity licensees.

B. The Office of Social Equity shall implement and administer the grant program, including approving qualifying partnerships.

C. The Office of Social Equity may approve a qualifying partnership where a cost or other fee is imposed by an operational cannabis licensee, if the cost or other fee is substantially reduced from the market value.

D. If an operational cannabis licensee has a license that was converted under Alcoholic Beverages and Cannabis Article, §36-401(b)(1)(ii), Annotated Code of Maryland, the total amount of any grant issued to the licensee may not exceed the lesser of:

(1) The cost of the conversion fee that was paid by the licensee; or

(2) $250,000 per year per qualifying partnership.

E. Qualifying partnerships under this regulation may not:

(1) Explicitly or implicitly transfer, including through convertible debt, any ownership or control from the social equity licensee to the operational cannabis licensee;

(2) Require the social equity business to conform with any branding, messaging, standard operating procedures, or other infringement on the social equity licensees’ operations; or

(3) Otherwise restrict, hinder, exploit, or unfairly treat the social equity licensee to benefit the operational cannabis licensee.

F. In addition to any other applicable penalties established in this subtitle and COMAR 10.62, including suspending, fining, restricting, or revoking a license, an operational cannabis licensee found in violation of §E of this regulation may be subject to any of the following sanctions:

(1) Restriction, revocation, or invalidation of any qualifying partnership approved by the Office of Social Equity;

(2) Rescission or invalidation of any attempted transfer of ownership or control; or

(3) Repayment of any grant funding received by the operational cannabis licensee.

.04 Reporting Requirements.

Within 30 days of a written request, a cannabis licensee shall provide any data and information required by the Office of Social Equity to:

A. Complete statutorily mandated reports;

B. Evaluate the diversity and equity of ownership, management, employment, and contracted goods and services in the legal cannabis economy in Maryland; and

C. Operate and evaluate the Social Equity Partnership Grant Program.

14.17.04 Medical Cannabis Program

Authority: Alcoholic Beverages and Cannabis Article, §§36-201, 36-301,
36-302, 36-410, and 36-601, Annotated Code of Maryland

.01 Certifying Providers.

A. The Administration shall register a certifying provider in accordance with COMAR 10.62.03.

B. Action Against a Provider.

(1) After a written notice and a hearing in accordance with COMAR 14.17.22 if such hearing is properly requested, the Administration may deny a certifying provider’s application for registration, or revoke registration to certify if the provider:

(a) Fraudulently applies for approval;

(b) Fraudulently issues a written certification; or

(c) Fails to comply with this chapter.

(2) The Administration shall report any finding to the State licensing board of the provider and may refer any allegation of fraud or conduct that threatens public health by a certifying provider.

.02 Patient and Caregiver Registry.

The Administration shall maintain a registry of qualifying patients and caregivers in accordance with COMAR 10.62.04.

.03 Written Certification.

A. A certifying provider shall issue a written certification in accordance with COMAR 10.62.05.01.

B. A written certification shall be renewed in accordance with COMAR 10.62.05.02.

.04 Patient and Caregiver Identification Cards.

A. The Administration shall issue patient identification cards in accordance with COMAR 10.62.06.01.

B. The Administration shall issue caregiver identification cards in accordance with COMAR 10.62.06.02.

C. Renewal, replacement, revocation, confiscation, and modification to patient and caregiver identification cards shall be done in accordance with COMAR 10.62.06.03—10.62.06.07.

D. A qualifying patient and registered caregiver shall pay the fees associated with registration under COMAR 14.17.21.

.05 Product Reservation for Qualifying Patients.

A dispensary may only sell or dispense high potency products to a qualified patient or registered caregiver, as specified in COMAR 14.17.13.03.

.06 Accommodations for Qualifying Patients.

A. A standard cannabis dispensary licensed under COMAR 14.17.06.08 shall:

(1) Provide exclusive access to the licensed premises to qualifying patients and registered caregivers for at least one hour per day that the dispensary is operational or a dedicated service line to serve only qualifying patients and caregivers for the duration of the licensed premises’ operating hours;

(2) Conspicuously display information about the reserved hours or dedicated service line for qualifying patients and registered caregivers, whichever is applicable on:

(a) The front of the licensed premises; and

(b) If applicable, the licensed dispensary’s social media accounts and public-facing website.

(3) If providing reserved hours, maintain a consistent schedule.

B. A standard cannabis dispensary may offer additional time and accommodation for qualifying patients and registered caregivers beyond the requirements in §A of this regulation, including reserving for qualifying and registered caregivers:

(1) Priority access to the dispensary service area; and

(2) Parking spaces near the entrance of the dispensary, if applicable.

.07 Compassionate Use Fund.

A. The purpose of the Compassionate Use Fund is to reduce the cost of obtaining a medical assessment to determine the appropriateness of treatment with cannabis or reduce the cost of medical cannabis for individuals enrolled in the Maryland Medical Assistance Program or in the Veterans Affairs Maryland Health Care System.

B. The Administration shall, in consultation with the Cannabis Public Health Advisory Council, certifying providers, cannabis licensees, and qualifying patients, develop regulations to implement the Compassionate Use Fund program in accordance with Alcoholic Beverages and Cannabis Article, §36-601, Annotated Code of Maryland.

.08 New Condition Approval Process.

A. The Administration shall consider a petition to add a medical condition, medical treatment, or disease for approved medical cannabis use in accordance with COMAR 10.62.07.

B. The Administration may refer a petition for consideration to the:

(1) Cannabis Public Health Advisory Council; or

(2) Advisory Board on Medical and Adult-use Cannabis.

C. If the Advisory Council or the Advisory Board on Medical and Adult-use Cannabis considers a petition to add a medical condition, treatment, or disease for approved medical cannabis use, the Advisory Council or the Advisory Board on Medical and Adult-use Cannabis shall study and make recommendations to the Administration on whether to approve or deny the petition.

.09 Clinical Directors.

A. A licensed dispensary shall appoint at least one individual to function as clinical director who:

(1) Is eligible to serve as a certifying provider, as defined in COMAR 14.17.01;

(2) Is a licensed pharmacist in good standing with the State Board of Pharmacy; or

(3) Has substantial education, training, and experience in the medical use of cannabis, as determined by the Administration and is a:

(a) Registered nurse in good standing with the State Board of Nursing; or

(b) Licensed naturopathic doctor in good standing with the State Board of Physicians.

B. During the hours of operation, a licensed dispensary shall have a clinical director:

(1) On-site; or

(2) Available via electronic communication.

C. A clinical director shall:

(1) Register as a clinical director with the Administration;

(2) Complete at least one training course each year that is approved by the Administration, which includes:

(a) The latest scientific research on medical cannabis;

(b) The risks and benefits of medical cannabis; and

(c) Other information considered necessary by the Administration;

(3) Educate qualifying patients and caregivers on:

(a) Treatment of the qualifying patient’s medical condition with medical cannabis;

(b) Potential drug-to-drug interactions, including interactions with alcohol, prescription drugs, non-prescription drugs, and supplements;

(c) Possible side effects or contraindications of medical cannabis use;

(d) The potential for differing strengths and effects of medical cannabis strains; and

(e) Different methods, forms, and routes of medical cannabis administration.

(4) Provide training to dispensary agents on:

(a) Guidelines for providing information to qualifying patients related to risks, benefits, and side effects associated with medical cannabis;

(b) Recognizing signs and symptoms of substance abuse; and

(c) Guidelines for refusing to provide medical cannabis to an individual who appears to be under the influence of drugs or alcohol.

D. A clinical director for a licensed dispensary may not provide a written certification for medical cannabis to any qualifying patient.

.10 Tax Exemption of Medical Cannabis.

Medical cannabis sold to qualifying patients or registered caregivers under this chapter shall be exempt from any sales and use tax assessment.

14.17.05 Application Process and Issuance of Licenses

Authority: Alcoholic Beverages and Cannabis Article, §§36-202, 36-401, 36-505, and 36-404, Annotated Code of Maryland

.01 Scope.

This chapter applies to the distribution of any cannabis licenses through a lottery system, including a:

(1) Standard grower license;

(2) Standard processor license;

(3) Standard dispensary license;

(4) Micro grower license;

(5) Micro processor license;

(6) Micro dispensary license;

(7) On-site consumption establishment license; and

(8) Incubator space license.

.02 Application Requirements.

A. An applicant shall submit an application to the Administration for a license.

B. A submitted application shall conform with the requirements established under Alcoholic Beverages and Cannabis Article, §36-404, Annotated Code of Maryland.

C. An application shall be:

(1) Completed on a form designated by the Administration; and

(2) Accompanied by the application fee as specified in COMAR 14.17.21.

D. An applicant, including any individual or entity that holds an ownership interest in or control of the applicant, may only be listed on:

(1) One application per license type per application round; and

(2) Two applications for any license type per application round.

E. Any applicant that violates §D of this regulation may not be considered by the Administration for licensure.

F. The Administration may not require an applicant to possess or own any property or facility to operate a cannabis business at the time of the application.

G. The Administration may verify an applicant’s status as a social equity applicant prior to the initial application and licensure.

H. Any information an applicant submits in support of their social equity status in §G of this regulation is considered part of the application and is subject to verification by the Administration.

.03 Application Notification, Submission, and Review.

A. The Administration shall announce an application round at least 60 days prior to the acceptance of applications. The announcement shall include:

(1) Types of licenses available during the licensing round;

(2) Number of licenses available by license type;

(3) Beginning and closing day of the application period; and

(4) Any regional, jurisdictional, or other geographical considerations in the licensing round.

B. The Administration shall accept applications for a period of 30 calendar days.

C. The Administration shall conduct extensive outreach to small, minority, and women business owners and potential social equity applicants prior to accepting applications.

D. Upon the closing of any application period, the Administration shall announce the number of applications submitted and the maximum number of licenses that may be awarded within each license category and pool of applications.

E. Application Review.

(1) The burden of proving an applicant’s qualifications rests on the applicant.

(2) The Administration may:

(a) Deny an application that:

(i) Is not complete in every material detail;

(ii) Contains a material misstatement, omission, misrepresentation, or untruth;

(iii) Does not meet the minimum qualifications for the lottery; or

(iv) Is not submitted by the established deadline; and

(b) Request any additional information from any applicant, if it deems the information necessary to review or process the application; and

(c) If the applicant does not provide the additional requested information within 10 calendar days, deny the application.

(3) The Administration shall determine whether a submitted application meets the minimum qualifications for the lottery on a pass-fail basis by reviewing:

(a) A detailed operational plan for the safe, secure, and effective operation of the business;

(b) A business plan demonstrating a likelihood of success and sufficient ability and experience on the part of the applicant, and providing for appropriate employee working conditions;

(c) A detailed diversity plan; and

(d) For the first round of licensing and otherwise as required under Alcoholic Beverages and Cannabis Article, §36-404, Annotated Code of Maryland, for any subsequent round of licensing, documentation that the applicant meets the requirements of a social equity applicant.

F. Minimum qualifications in §E(3) of this regulation shall be established by the Administration and communicated to prospective applicants prior to the application period.

G. The Administration may award fewer licenses than authorized under law in any licensing round.

H. The Administration may require an applicant, or any individual or entity that holds an ownership interest in or control of the applicant, to complete an attestation demonstrating the applicant meets the requirements for award established in Alcoholic Beverages and Cannabis Article, Title 36, Subtitle 4, Annotated Code of Maryland.

.04 Lottery Award and Conditional License.

A. Lottery.

(1) The Administration shall conduct a lottery that is impartial, random, and in a format selected by the Administration.

(2) Any applicant that meets the minimum qualifications for licensing shall be placed in the lottery.

(3) Subsequent to the lottery, the Administration shall notify all applicants of whether their application was selected in the lottery.

(4) The Administration may request any additional information or supporting documentation from an applicant selected in the lottery necessary to verify aspects of the application, including but not limited to additional information and supporting documentation related to the ownership and control of the applicant.

(5) The Administration may deny issuing a conditional license to an applicant selected in the lottery if:

(a) The applicant fails to provide any additional information or supporting documentation requested pursuant to §A(4) of this regulation within 10 calendar days;

(b) Any additional information or supporting documentation submitted by the applicant demonstrates the applicant is not eligible for a license under this subtitle or Alcoholic Beverages and Cannabis Article, Title 36, Annotated Code of Maryland; or

(c) The Administration determines that the applicant violated COMAR 14.17.05.02D.

(6) The Administration shall notify an applicant who has been awarded a conditional license within 5 calendar days of the award.

B. Conditional License.

(1) A conditional licensee shall complete a supplemental license application.

(2) A supplemental license application shall require a conditional licensee to:

(a) Undergo a criminal history records check in accordance with Alcoholic Beverages and Cannabis Article, §36-505, Annotated Code of Maryland;

(b) Complete a financial background investigation conducted by the Administration;

(c) Verify any information or supporting documentation provided in the application;

(d) Disclose any adverse action taken against a professional or business license held in any jurisdiction by the applicant or any individual or entity holding an ownership interest in the applicant;

(e) Waive any contractual, statutory, or common law obligation of confidentiality and authorize any government agency in any jurisdiction to release to the Administration all information the conditional licensee has provided to any other jurisdiction while seeking a cannabis-related license in that other jurisdiction, as well as the information obtained by that other jurisdiction during any investigation it may have conducted regarding the applicant; and

(f) Release all financial institutions, fiduciaries, and other parties from any contractual, statutory, or common law obligation of confidentiality to provide financial, personal and background information relevant to the conditional licensee’s capacity to manage a licensed facility; and

(g) Identify and demonstrate legal control of the proposed site, through lease, purchase, or other means, for the cannabis business.

C. Any conditional license not awarded due to circumstances in §A of this regulation may be awarded by lottery using the same pool of applicants as the initially selected application.

.05 Issuance of a License or Rescission of a Conditional License.

A. Conditional License Period.

(1) The conditional license period:

(a) Begins on the day that a conditional license is issued to the selected applicant; and

(b) Expires 18 months after the day that conditional license was issued or at the end of an extension granted by the Administration.

(2) A conditional licensee may apply for an extension of the conditional license.

(3) The Administration may approve a one-time extension of up to 6 months, if the Administration determines the conditional licensee has made consistent good faith efforts to establish a cannabis business.

(4) During the conditional license period, a conditional licensee shall:

(a) Complete a supplemental license application;

(b) Establish legal control of the proposed site, through lease, purchase, or other means, for the cannabis business;

(c) Gain zoning or planning approval from a political subdivision, if applicable; and

(d) Register the business with the State Department of Assessment and Taxation

(5) During a conditional license period, a conditional licensee may not:

(a) Engage in purchasing, possessing, cultivating, manufacturing, or selling cannabis or cannabis products;

(b) Make any transfer of an ownership interest that causes a change in the individual or entity that holds the controlling ownership interest;

(c) Make any transfer of control, as defined in COMAR 14.17.01; and

(d) If the conditional licensee qualified as a social equity applicant, make any transfer of an ownership interest that causes the conditional licensee to no longer comply with the social equity applicant definition in COMAR 14.17.01.

(6) During a conditional license period, a conditional licensee may obtain additional resources by adding:

(a) Grants and loans from new or existing financial sources not listed in the initial application; and

(b) Owners and passive investors.

(7) Any additional resources obtained by a conditional licensee made under §A(6) of this regulation may not violate this subtitle or Alcoholic Beverages and Cannabis Article, Title 36, Subtitle 4, Annotated Code of Maryland.

B. Rescission of a Conditional License. The Administration may rescind a conditional license if a conditional licensee, or any individual or entity included in the supplemental license application:

(1) Has been convicted of or pleaded nolo contendere to a crime involving moral turpitude, whether or not any appeal or other proceeding is pending to have conviction or plea set aside;

(2) Fraudulently or deceptively attempts to obtain a license;

(3) Is ineligible to hold an ownership interest in or control of a business licensed under Alcoholic Beverages and Cannabis Article, Title 36, Subtitle 4, Annotated Code of Maryland;

(4) Fails to reveal any material fact pertaining to the conditional licensee’s qualification for a license;

(5) Fails to submit a complete supplemental license application;

(6) Fails to become licensed and operational within:

(a) 18 months after the day the conditional license was issued; or

(b) If granted an extension, the day after the expiration of any extension granted by the Administration.

(7) Violates §A(5) of this regulation;

(8) Is not registered or in good standing with the State Department of Assessment and Taxation; or

(9) Has taxes in arrears in any jurisdiction.

C. The Administration may award a license on a determination that:

(1) The conditional licensee has submitted a complete supplemental license application;

(2) The supplemental license application, including any individual or entity included in the application, does not violate §B of this regulation;

(3) The license fee specified in COMAR 14.17.21 has been paid;

(4) All inspections are passed, and all the conditional licensee’s operations conform to the specifications of the application as approved pursuant to this chapter; and

(5) The proposed premises:

(a) Are under the legal control of the conditional licensee; and

(b) Comply with all zoning and planning requirements.

D. A licensed business may not grow, process, distribute, dispense, or otherwise begin business operations without approval of written documentation under §C of this regulation by the Administration.

E. The Administration may not award a license to a business who has registered with the State Department of Assessment and Taxation using a legal name that:

(1) Uses the terms “cannabis”, “marijuana”, or other synonym related to controlled substances;

(2) Suggests the use of cannabis as an intoxicant; or

(3) Incorporates any copyrighted material or trademark or service mark attributable to another entity.

F. The Administration may suspend, fine, restrict, or revoke a license if a licensee has:

(1) Fraudulently or deceptively submitted written documentation to the Administration;

(2) Violated Alcoholic Beverages and Cannabis Article, Title 36, Subtitle 11, Annotated Code of Maryland; or

(3) Began operations prior to Administration approval.

.06 Application Retention.

A. Upon notification that an applicant was not selected by the lottery, the applicant may request the Administration retain the application for subsequent licensure application rounds.

B. The Administration shall retain any application requested for retention by the applicant for a period of one year.

C. The Administration may contact an applicant with a retained application for any additional information required for subsequent licensing rounds.

D. Any application retained by the Administration that meets the specifications and requirements of a subsequent licensing round within the one-year retention period shall be automatically entered into the lottery if:

(1) The applicant has properly amended the application if requested by the Administration under §C of this regulation; and

(2) Any additional information requested by the Administration has been updated.

E. The Administration may not enter a retained application into a subsequent lottery round if:

(1) Any individual included in the application is associated with additional applications in the licensing round that exceed the restrictions in COMAR 14.17.05.02D;

(2) Any individual included in the application is in violation of ownership restrictions under COMAR 14.17.16, or the awarding of a license would place the individual in violation of ownership restrictions under COMAR 14.17.16; and

(3) Any individual associated with the application has been found to be in violation of the Alcoholic Beverages and Cannabis Article, Title 36, Subtitle 11, Annotated Code of Maryland.

.07 Hearing Rights of Applicants.

A. Records Review.

(1) An applicant not entered into the lottery by the Administration may request a records review of the submitted application within 10 days of notification that their application does not meet the minimum qualifications for the lottery on a pass-fail basis.

(2) A records review shall consist of an opportunity for the applicant to examine the applicant’s records received by the Administration and verify the basis on which the application was deemed ineligible for the lottery.

(3) No applicant may gain access to records submitted by any other applicant through the records review process.

B. A selected applicant or an applicant who applies pursuant to COMAR 14.17.05.06 who subsequently has their application denied by the Administration or a conditional licensee who has their conditional license rescinded pursuant to Regulation .05B of this chapter may request a hearing under COMAR 14.17.22.

C. An applicant who meets the minimum qualifications for the lottery, but is not selected in the lottery, may not appeal or request a hearing. The application shall be retained by the Administration in accordance with Regulation .06 of this chapter.

.08 Lottery Exemption.

A. Pigford v. Glickman Class Members.

(1) The Administration may issue up to five conditional grower licenses to recognized class members of Pigford v. Glickman, 185 32 F.R.D. 82 (D.D.C. 1999), or In Re Black Farmers Litig., 856 F. Supp. 2d 1 (D.D.C. 2011) who:

(a) Were awarded damages related to farming operations in Maryland;

(b) Have provided evidence to the Administration that they have not been fully compensated for discrimination and continue to experience challenges due to past or present discrimination; and

(c) Meet all other application criteria established by the Administration under this chapter.

(2) If there are more qualified applications than the number of licenses available, the Administration shall conduct a lottery for all applicants that meet the minimum qualifications for licensing established under §A(1) of this regulation.

(3) Notwithstanding any other provision of law, a license issued under this regulation is in addition to and not subject to the limitations on the total number of licenses that the Administration may issue under Alcoholic Beverages and Cannabis Article, Title 36, Subtitle 4, Annotated Code of Maryland.

B. A business awarded a grower license pursuant to Chapter 598 of the Acts of the General Assembly of 2018 may be awarded a standard dispensary license, if the grower:

(1) Submits an application that meets the minimum qualifications for a standard dispensary license, as determined by the Administration; and

(2) Including any individual or entity that holds an ownership interest in or control of the grower, does not own or control a cannabis dispensary license.

14.17.06 Standard Cannabis Licenses

Authority: Alcoholic Beverages and Cannabis Article, §§36-202—203, 36-401, 36-405, 36-406, 36-407, 36-503, and 36-802, Annotated Code of Maryland

.01 Scope.

This chapter applies to all standard cannabis licenses, including:

A. Standard grower, processor, and dispensary licenses authorized under Alcoholic Beverages and Cannabis Article, §36-401(c)(1), Annotated Code of Maryland;

B. Converted licenses under Alcoholic Beverages and Cannabis Article, §36-403, Annotated Code of Maryland;

C. Converted micro licenses under COMAR 14.17.07.08;

D. Incubator space licenses, authorized under Alcoholic Beverages and Cannabis Article, §36-406, Annotated Code of Maryland; and

E. On-site consumption licenses, authorized under Alcoholic Beverages and Cannabis Article, §36-407, Annotated Code of Maryland.

.02 Term of License and License Renewal.

A. Licenses converted under Alcoholic Beverages and Cannabis Article, §36-403, Annotated Code of Maryland, are valid for 5 years from the date of the initial conversion fee payment to the Administration.

B. As a condition of licensure, a licensee shall comply with all subregulatory guidance issued by the Administration, including but not limited to bulletins, notices, resolutions, and technical authorities posted to the Administration’s website.

C. A cannabis license under this chapter is valid for:

(1) 5 years on initial licensure; and

(2) 5 years on renewal.

D. At least 90 calendar days before the expiration of a license, the Administration shall notify the licensee of the:

(1) Date on which the license expires;

(2) Process and the fee required to renew the license; and

(3) Consequences of a failure to renew the license.

E. At least 30 calendar days before a license expires, a licensee seeking approval shall submit:

(1) The renewal application in the form designated by the Administration;

(2) Proof that fingerprints have been submitted to Criminal Justice Information System and the Federal Bureau of Investigation for each agent and any owner with an ownership interest of 5 percent or more;

(3) To a full inspection of the licensed premises as described in COMAR 10.62.33, unless a full inspection was satisfactorily completed within 3 months before the date of the license expiration; and

(4) Payment of the fee specified in COMAR 14.17.21.

F. The Administration may renew a license that meets the requirements for renewal as stated in §E of this regulation.

G. If a licensee fails the inspection or submits a deficient application for renewal, the licensee may apply for reinstatement by:

(1) Submitting a plan to correct the deficiencies noted during an inspection; and

(2) Amending the application for renewal.

H. The Administration may deny a license renewal if:

(1) The plan to correct deficiencies identified in an inspection is deficient;

(2) The amended application for renewal is deficient; or

(3) The licensee is repeatedly found in violation of health and safety regulations during the license period.

I. A licensee who fails to apply for license renewal by the date specified by the Administration, or whose license was not renewed by the Administration:

(1) Shall cease operations at all premises; and

(2) May not provide cannabis to any entity or individual.

J. A license may be reinstated upon:

(1) Payment of the reinstatement fee specified in COMAR 14.17.21; and

(2) Submission of a reinstatement application approved by the Administration.

.03 Change of Location.

A. A licensee may apply to change the location of the licensee’s operation.

B. The licensee shall submit an application to the Administration along with the fee specified in COMAR 14.17.21.

C. A licensee may not begin cultivation, processing or dispensing of cannabis at a new location until the Administration approves the change.

D. A dispensary may only change location within the county that the dispensary was awarded a license.

.04 Transfer of Ownership Interest in a License.

A. A cannabis licensee, including a cannabis licensee whose license was converted in accordance with Alcoholic Beverages and Cannabis Article, §36-401, Annotated Code of Maryland, may not transfer ownership of the license prior to July 1, 2028, except as provided under Alcoholic Beverages and Cannabis Article, §36-503, Annotated Code of Maryland.

B. The acquisition of less than 5 percent of a publicly traded stock does not require review and approval by the Administration.

C. The Administration may approve a transfer or assignment of ownership if:

(1) The Administration receives notice of the intent of the owner of the interest, or of the estate of the owner of the interest, to transfer or assign an ownership interest in a license to another party, in a form prescribed by the Administration;

(2) The proposed transfer does not violate Alcoholic Beverages and Cannabis Article, Title 36, Annotated Code of Maryland;

(3) The transferee has paid the required fee specified in COMAR 14.17.21; and

(4) If the ownership interest is 5 percent or more, the transferee has provided criminal history record and financial information to the Administration.

D. The Administration shall deny transfer of an interest for any proposed transferee:

(1) If the transferee has been convicted of or pleaded nolo contendere to a crime involving moral turpitude, whether or not any appeal or other proceeding is pending to have the conviction or plea set aside;

(2) If the payment of taxes due in any jurisdiction is in arrears;

(3) If the transfer violates COMAR 14.17.16; or

(4) If the transfer would convey a controlling interest in the license prior to July 1, 2028, and is not proposed due to death, disability, incapacity, bankruptcy or receivership in accordance with a lending agreement of a cannabis licensee or court order.

E. The Administration may deny transfer of a controlling interest in a license or in an ownership interest of 5 percent or more if the Administration finds good cause to deny the proposed transfer.

F. Any individual or entity identified as having ownership or control of a license may not hold an ownership interest that exceeds the limitations set forth in Alcoholic Beverages and Cannabis Article, §36-401(e), Annotated Code of Maryland.

G. If the Administration approves a transfer of an ownership interest of a license and subsequently the Administration finds that such a transfer violates State, local, or federal law, the Administration may:

(1) Issue a fine against any parties involved in the transfer;

(2) Declare the transfer void; and

(3) Rescind the license.

.05 Management Agreements.

A. A licensee shall provide a copy of a management agreement to the Administration and include:

(1) Information detailing any compensation paid in exchange for the management services;

(2) Criminal history record and financial information of the third party providing the management services; and

(3) Any other information relevant to the management agreement requested by the Administration.

B. A management agreement may not take effect unless the Administration has:

(1) Received proper notice of the management agreement, as specified in §A of this regulation;

(2) Received the required fee specified in COMAR 14.17.21; and

(3) Approved the management agreement.

C. The Administration may deny a management agreement:

(1) If the management agreement constitutes an invalid transfer of an ownership interest in or control of a license, as specified in Regulation .04 of this chapter;

(2) If the criminal history record information or the background investigation reveals the third party providing the management services has been convicted of or pleaded nolo contendere to a crime involving moral turpitude, whether or not any appeal or other proceeding is pending to have the conviction or plea set aside;

(3) If the management service agreement transfers control of a license in violation of Alcoholic Beverages and Cannabis Article, §36-503, Annotated Code of Maryland;

(4) If the licensee fails to produce additional documentation requested by the Administration; or

(5) For any other good cause.

D. In the case of material change to a management agreement, including but not limited to a change of ownership or control of the management company, the licensee shall:

(1) Provide any relevant records, files, or information to the Administration; and

(2) Receive Administration approval prior to the material change to the management agreement taking effect.

.06 Standard Grower License.

A. A standard cannabis grower license authorizes the licensee to:

(1) Cultivate or package cannabis; and

(2) Provide cannabis, or usable cannabis, to other licensees and other registered independent testing laboratories.

B. The canopy for a standard licensed grower may not exceed the canopy restrictions as established in Alcoholic Beverages and Cannabis Article, §36-402, Annotated Code of Maryland.

C. On or before October 1 of each year licensed growers shall report to the Administration the square footage of indoor and outdoor canopy as defined in COMAR 14.17.01. The Administration may:

(1) Inspect the licensed premise to verify the licensed grower’s annual submission of canopy square footage; and

(2) Restrict, reduce, fine or otherwise sanction any licensed grower who misrepresents canopy square footage.

D. For any licensed grower found in violation of §B of this regulation, the Administration may:

(1) Reduce the canopy of the licensed grower by the same percentage as it exceeds the authorized canopy; and

(2) Seize, destroy, confiscate, or place an administrative hold on any flowering cannabis plants produced in the excess of the canopy restrictions.

E. For the purposes of calculating canopy under §§B—D of this regulation, canopy that is rented, leased, operated, or otherwise controlled by a licensed grower other than its owner shall only be attributed to the licensed grower in control of the square footage.

F. For the purposes of calculating canopy under §§B—D of this regulation, one square foot of indoor canopy is equal to four square feet of outdoor canopy.

G. A grower licensed under this regulation shall operate in accordance with COMAR 14.17.10.

.07 Standard Processor License.

A. A standard cannabis processor license authorizes the licensee to:

(1) Transform cannabis into another product or an extract and package and label the cannabis product; and

(2) Provide cannabis to licensed dispensaries and independent testing laboratories.

B. A processor licensed under this regulation shall operate in accordance with COMAR 14.17.11.

.08 Standard Dispensary License.

A. A standard cannabis dispensary license authorizes the licensee operating a store at a physical location to acquire, possess, sell, or dispense cannabis products and related materials in accordance with the Alcoholic Beverages and Cannabis Article, §36-401(c)(1), Annotated Code of Maryland, including for use by qualifying patients or consumers through a physical storefront.

B. After July 1, 2024, a standard dispensary licensee may not operate a delivery service as defined in COMAR 14.17.01, unless the standard licensee:

(1) Has a qualifying partnership with a micro dispensary licensee under the Alcoholic Beverages and Cannabis Article, §1-323, Annotated Code of Maryland, to conduct delivery services on behalf of the licensed dispensary; or

(2) Otherwise partners or contracts with a micro dispensary licensee to conduct delivery services for the licensed dispensary.

C. Prior to July 1, 2024, a standard dispensary licensee is authorized to deliver medical cannabis to qualifying patients and caregivers only as specified in COMAR 10.62.30.04.

D. It is a violation of §C of this regulation to:

(1) Deliver adult-use cannabis to consumers;

(2) Not verify the delivery recipient is a qualifying patient or registered caregiver;

(3) Deliver an amount that exceeds the qualifying patient or registered caregiver’s 30-day supply;

(4) Use a vehicle that otherwise violates COMAR 10.62.18.06.

E. Any delivery conducted from July 1, 2023 through June 30, 2024 under this regulation shall otherwise comply with COMAR 14.17.12.03.

F. A dispensary licensed under this regulation shall operate in accordance with COMAR 14.17.12.

.09 Incubator Space License.

A. A cannabis incubator space license authorizes the licensee to operate a facility within which a micro licensee may operate in accordance with Alcoholic Beverages and Cannabis Article, §36-406, Annotated Code of Maryland.

B. Any individual with ownership or control of an incubator space license may not have any ownership or control any other cannabis license type.

C. Prior to the issuance of incubator space licenses, the Maryland Economic Development Corporation shall identify regional sites in accordance with Section 13 of Chapters 254 and 255 (H.B. 556)(S.B.516) of the Acts of 2023.

.10 On-Site Consumption License.

A. An on-site consumption establishment license authorizes the licensee to operate a licensed premises in which cannabis may be consumed in accordance with Alcoholic Beverages and Cannabis Article, §36-407, Annotated Code of Maryland.

B. An on-site consumption establishment may operate only if the county and, if applicable, the municipality, where the business is located have issued a permit or license that expressly allows the operation of the on–site consumption establishment subject to the limitations in the Alcoholic Beverages and Cannabis Article, §36-405, Annotated Code of Maryland.

C. An on–site consumption license does not authorize the holder of the license to:

(1) Cultivate cannabis;

(2) Process cannabis or cannabis–infused products; or

(3) Add cannabis to food prepared or served on the premises.

D. Any individual or entity who holds an ownership interest in or control of an on-site consumption license may not have any ownership interest or control in any other cannabis license.

E. An on-site consumption establishment may apply to change the location of the licensee’s operation.

F. The on-site consumption establishment shall submit an application to the Administration along with the fee specified in COMAR 14.17.21.

G. The application shall include documentation:

(1) Of approval from the jurisdiction where the licensee plans to relocate; and

(2) That the proposed premises:

(a) Is under legal control of the applicant; and

(b) Comply with all zoning and planning requirements.

H. The Administration may not award licenses for on-site consumption establishments prior to May 1, 2024.

I. No other cannabis licensee may authorize or permit on-site consumption at the licensed premise, or at any space owned or controlled by the licensee.

J. Prior to operating a facility where the consumption of cannabis is permitted on the premises, a person shall obtain an on-site consumption licensed.

K. An on-site consumption establishment may obtain cannabis and cannabis products from licensed growers, processors and standard dispensaries.

14.17.07 Micro Licenses

Authority: Alcoholic Beverages and Cannabis Article, §§36-202—203, 36-401, and 36-503, Annotated Code of Maryland

.01 Scope.

This chapter applies to all micro licenses authorized under the Alcoholic Beverages and Cannabis Article, §36-401(c)(2), Annotated Code of Maryland.

.02 Term of License and License Renewal.

A. In addition to §§B—D of this regulation, terms of license and license renewal for micro licenses are as established in COMAR 14.17.06.02B—J.

B. A micro licensee may not exceed growing, processing or dispensing operational restrictions set forth in the Alcoholic Beverages and Cannabis Article, §36-401(c)(2), Annotated Code of Maryland.

C. The Administration may verify compliance with the operational restrictions under §B of this regulation within the first 24 months of a micro licensee’s operations by:

(1) For growers, measuring and inspecting the canopy owned or otherwise controlled by the licensed micro grower;

(2) For processors, querying the seed-to-sale tracking system for the prior 12 months of operations; and

(3) For dispensaries, investigating or otherwise verifying that the licensee:

(a) Operates only within authorized service area;

(b) Employs fewer than ten individuals; and

(c) Does not operate a physical storefront.

D. The Administration may restrict, reduce, fine, or otherwise sanction any micro licensee who is found to be in violation of §B of this regulation.

.03 Change of Location.

Change of location procedures and requirements are as established in COMAR 14.17.06.03.

.04 Transfer of Ownership Interest in a License.

Transfer of ownership interest requirements and procedures for micro licenses are established in COMAR 14.17.06.04.

.05 Micro Grower License.

A. A micro grower license authorizes the licensee to:

(1) Cultivate or package cannabis; and

(2) Provide cannabis to other licensees and other registered independent testing laboratories.

B. The canopy for a micro grower may not exceed the restrictions as established in the Alcoholic Beverages and Cannabis Article, §36-401(c)(2)(i), Annotated Code of Maryland.

C. On or before October 1 of each year, licensed growers shall report to the Administration the square footage of indoor and outdoor canopy as defined in COMAR 14.17.01.

D. The Administration may:

(1) Inspect the licensed premise to verify the licensed grower’s annual submission of canopy square footage; and

(2) Restrict, reduce, fine, or otherwise sanction any licensed grower who misrepresents canopy square footage.

E. For any licensed grower found in violation of §B of this regulation, the Administration may:

(1) Reduce the canopy of the licensed grower by the same percentage as it exceeds the authorized canopy; and

(2) Seize, destroy, confiscate, or place an administrative hold on any flowering cannabis plants produced in the excess of the canopy.

F. For the purposes of calculating canopy under §§B—E of this regulation, canopy that is rented, leased, operated or otherwise controlled by one licensed grower to another licensed grower shall only be attributed to the licensed grower in control of the square footage.

G. A micro grower licensed under this regulation shall operate in accordance with COMAR 14.17.10.

H. A micro grower licensed under this regulation may convert to a standard grower license under COMAR 14.17.06.06 in accordance with Regulation .08 of this chapter.

.06 Micro Processor License.

A. A micro processor license authorizes the licensee to:

(1) Transform cannabis into another product or an extract and package and label the cannabis product; and

(2) Provide cannabis to licensed dispensaries and independent testing laboratories.

B. A micro processor licensed under this chapter may not exceed the restrictions as established in Alcoholic Beverages and Cannabis Article, §36-401(c)(2)(ii), Annotated Code of Maryland, for the processing of cannabis products.

C. A micro processor licensed under this regulation shall operate in accordance with COMAR 14.17.11.

D. A micro processor licensed under this regulation may convert to a standard processor license under COMAR 14.17.06.07 in accordance with Regulation .08 of this chapter.

.07 Micro Dispensary License.

A. A micro dispensary license authorizes the licensee to operate a delivery service as defined in COMAR 14.17.01.

B. A micro dispensary licensee may not:

(1) Operate a physical storefront; or

(2) Employ more than 10 individuals.

C. A micro dispensary licensed under this regulation shall only deliver cannabis products to private residences and medical facilities in the State of Maryland.

D. A micro dispensary licensed under this regulation shall operate in accordance with COMAR 14.17.12.

E. A micro dispensary licensed under this regulation may convert to a standard dispensary license under COMAR 14.17.06.08 in accordance with Regulation .08 of this chapter.

.08 Conversion to Standard License.

A. A micro licensee in good standing may apply to the Administration to convert to a standard license once it has been operational for at least 24 months, in a manner determined by the Administration.

B. The Administration may deny the micro licensee for conversion to a standard license if the micro licensee:

(1) Has been operational for 24 or fewer months;

(2) Has been found to violate any operational restrictions in Regulation .02B of this chapter;

(3) Would be in violation of the ownership or control restrictions in COMAR 14.17.16;

(4) Does not provide adequate notice to the Administration; or

(5) For any other good cause determined by the Administration.

C. A micro license converted under §§A—B of this regulation to a standard license shall be valid through the date of the initial micro license.

D. Prior to the conversion of micro license to a standard license the licensee shall pay in full a pro-rated license fee.

E. The pro-rated license fee required under §D of this regulation shall be calculated by the Administration by:

(1) Subtracting any previous license fee paid for the valid micro license that is being converted into the standard license from the standard fee under COMAR 14.17.21; and

(2) Pro-rating the remaining license fee total by months remaining on the initial 5-year term of the micro license.

F. A micro license converted under this regulation:

(1) Shall be forfeited by the licensee as a condition of conversion and the Administration may award the forfeited license in a subsequent licensing round;

(2) Shall only be for the corresponding standard license type; and

(3) May not be converted to an incubator space license under COMAR 14.17.06.09 or on-site consumption license under COMAR 14.17.06.10.

G. The Administration shall reserve enough standard licenses, by license type, to allow a reasonable number of micro licenses to convert to a standard license.

14.17.08 Laboratory Registration and Operations

Authority: Alcoholic Beverages and Cannabis Article, §§36-202—204, and 36-408, Annotated Code of Maryland

.01 Definitions.

A. In this chapter, the following terms have the meanings indicated.

B. Terms Defined.

(1) “Accreditation body” means a nonprofit, impartial organization that requires conformance to 17025 ISO/IEC requirements and is a signatory to the international laboratory accreditation cooperation (ILAC) mutual recognition arrangement for testing.

(2) “Cannabis industry” means all cannabis registrants, licensees, and their agents in Maryland.

.02 Independent Testing Laboratory Registration.

An independent testing laboratory shall be registered by the Administration in accordance with COMAR 10.62.16.02.

.03 Standards of Care.

A. The independent testing laboratory shall:

(1) Follow the methodologies, ranges and parameters which are contained in the scope of the accreditation for testing cannabis or cannabis products;

(2) Establish standard operating procedures and method validation for testing that are approved by the accrediting body and the Administration;

(3) Require each independent testing laboratory employee to complete and execute an application for employment on a form provided by the Administration;

(4) Establish and follow written procedures for verifying the experience and education of laboratory employees;

(5) Submit the registration information for each independent testing laboratory employee within 15 days after the date the independent testing laboratory employee was hired;

(6) Upon termination of the independent testing laboratory’s association with a registered independent testing laboratory employee:

(a) Obtain any keys or other entry devices from the terminated independent testing laboratory employee;

(b) Ensure the terminated independent laboratory employee can no longer gain access to the laboratory premises; and

(c) Within 1 business day of the termination of independent laboratory employee, notify the Administration of the termination;

(7) Notify the Administration within 1 business day after the independent testing laboratory obtains notice of any kind that its accreditation has been denied, suspended or revoked;

(8) The independent testing laboratory shall implement the testing requirements established in COMAR 10.62.15.04—.07 and COMAR 1062.23.03—.06 and identified in the Administration’s current version of the technical authority for cannabis testing;

(9) Maintain a continuous or motion-activated video surveillance recording system that:

(a) Records all activity high quality and high resolution images capable of clearly revealing facial detail;

(b) Operates 24 hours a day, 365 days a year without interruption;

(c) Provides a date and time stamp for every recorded frame; and

(d) Captures activity at each area where cannabis is tested, disposed of, or stored;

(10) All recordings of security video surveillance shall be:

(a) Stored in a format that can be easily accessed for investigational purposes; and

(b) Retained for a minimum of 90 calendar days.

(11) Make any security video surveillance recording available to the Administration or law enforcement agency for just cause as requested within 48 hours.

B. Violation.

(1) Failure to provide the Administration with any video surveillance recording within 48 hours of a request from the Administration is a violation of COMAR 10.62.34.01.

(2) Each day of recording that a licensee fails to provide to the Administration, within the minimum of 90 calendar days that the recording shall be retained, constitutes a separate violation.

.04 Term and Renewal.

A. The registration is valid for 2 years.

B. An independent testing laboratory may renew its registration by submitting to the Administration:

(1) A copy of the independent testing laboratory registration form;

(2) Payment of the registration fee specified in COMAR 14.17.21; and

(3) Submission of copies of the most recent:

(a) Assessment from the accreditation body; and

(b) Proficiency testing results obtained by the independent testing laboratory.

.05 Independent Testing Laboratory Responsibilities.

A. An independent testing laboratory shall:

(1) Adopt standard operating procedures to test cannabis, cannabis concentrate, and any other product that contains more than 0.5 milligrams of THC per serving or 2.5 milligrams of THC per package that are approved by the accrediting body and the Administration;

(2) Perform testing of cannabis and cannabis products in accordance with approved standard operating procedures;

(3) Carry out all laboratory requirements and certificate of analysis procedures established in COMAR 10.62.15.04—.07 and COMAR 1062.23.03—.06 .

B. No independent testing laboratory may handle, test, or analyze cannabis or cannabis products unless the independent testing laboratory:

(1) Has been registered by the Administration;

(2) Is independent from all other persons and entities involved in the cannabis industry;

(3) Is accredited by an accreditation body or has a provisional registration from the Administration;

(4) Has established standard operating procedures that provide for adequate chain of custody controls for samples transferred to the independent testing laboratory for testing, which are approved by the Administration; and

(5) Enters timely and accurate data into the seed-to-sale tracking system that identifies and tracks samples

C. An independent testing laboratory shall weigh, document, and destroy all green waste in accordance with a standard operating procedure approved by the Administration.

D. Upon request, in a format determined by the Administration, registered independent testing laboratories shall provide materials to the State Reference Laboratory to conduct the activities under Regulation .07B of this chapter.

.06 Transportation of Products Containing Cannabis.

A. A registered independent testing laboratory may transport samples of cannabis and products containing cannabis from the premises of a licensed grower, processor, or dispensary to the independent testing laboratory.

B. A registered independent testing laboratory shall transport samples of cannabis and products containing cannabis:

(1) With oversight by at least one independent testing laboratory employee registered with the Administration; and

(2) Using a vehicle that:

(a) Meets the criteria specified in COMAR 10.62.18.05—.06; and

(b) Is registered with the Administration.

.07 State Cannabis Testing Laboratory.

A. The Administration shall operate a State Cannabis Testing Laboratory under the Alcoholic Beverages and Cannabis Article, §36-204, Annotated Code of Maryland.

B. The Administration shall operate a State Cannabis Testing Laboratory to:

(1) Prepare, conduct, and analyze proficiency testing events for independent testing laboratories registered under this chapter;

(2) Develop cannabis testing methodologies;

(3) Conduct compliance testing on cannabis samples;

(4) Establish and verify standard operating procedures for independent testing laboratories;

(5) Develop and facilitate quality assurance and compliance controls for micro growers and micro processors;

(6) Remediate problems with registered independent testing laboratories and recommend Administration sanctions; and

(7) Test products for adverse event reporting, research, and other purposes deemed necessary by the Administration, including:

(a) Licensed cannabis products produced and sold in accordance with this subtitle;

(b) Unlicensed cannabis products produced or sold in violation of this subtitle;

(c) Hemp derived products; and

(d) Any other products required to be tested for the public health or public safety of Maryland.

14.17.09 Other Cannabis Businesses

Authority: Alcoholic Beverages and Cannabis Article, §§36-202, 36-203, 36-401, and 36-409, Annotated Code of Maryland

.01 Scope.

This chapter applies to any registrant who conducts transportation, disposal, or security services for any cannabis licensee in Maryland.

.02 Registration of Ancillary Businesses and Security Guard Agencies.

Ancillary businesses and the transporters of cannabis shall be registered by the Administration in accordance with COMAR 10.62.18.07—10.62.18.09.

.03 Operations of Ancillary Businesses and Security Guard Agencies.

Operations of ancillary businesses and the transportation of cannabis shall be performed in accordance with COMAR 10.62.18.02—10.62.18.06 and any other State law.

.04 Delivery Service Operations.

A. Through June 30, 2024, a registered ancillary business for delivery may deliver medical cannabis only as specified in COMAR 10.62.30.04.

B. It is a violation of §A of this regulation to:

(1) Deliver adult-use cannabis to consumers;

(2) Not verify the delivery recipient is a qualifying patient or registered caregiver;

(3) Deliver an amount that exceeds the qualifying patient or registered caregiver’s 30-day supply; or

(4) Use a vehicle that otherwise violates COMAR 10.62.18.06.

C. A delivery conducted under this regulation from July 1, 2023 through June 30, 2024 shall otherwise comply with COMAR 14.17.12.03.

D. Beginning July 1, 2024, a registered ancillary business for delivery may not deliver cannabis.

.05 Incubator Spaces.

A. An incubator space may provide one or more of the following:

(1) Secure storage of cannabis or cannabis products for licensed micro dispensaries;

(2) Commercial kitchen space for the processing and production of cannabis products by licensed micro processors; or

(3) Space for the cultivation of cannabis by licensed micro growers.

B. Incubator spaces shall comply with the requirements of COMAR 14.17.10, 14.17.11, and 14.17.12 for the:

(1) Security of the premises;

(2) Sanitation of any cannabis or cannabis product produced at the incubator space;

(3) Safety of any cannabis cultivated at the incubator space regarding the:

(a) Use of pesticides; and

(b) Use of the seed-to-sale tracking system.

C. The incubator space licensee shall make a good faith effort to:

(1) Secure any cannabis, cannabis products, inventory, equipment, or other materials on the licensed premise; and

(2) Prevent theft or diversion of any cannabis, cannabis products, inventory, equipment, or other materials by license holders, agents, or members of the public.

D. The incubator space licensee holder may assess a fair market rent for the use or storage of the facility.

E. The incubator space licensee may not accept or receive any equity stake, ownership share, or control of a micro license facility as a condition of rent or use of the space.

14.17.10 Cannabis Grower Operations

Authority: Alcoholic Beverages and Cannabis Article, §§36-202, 36-203, 36-401, 36-402, and 36-410, Annotated Code of Maryland

.01 Scope.

A. Unless otherwise specified this chapter applies to a business licensed to grow cannabis under COMAR 14.17.06.06 and 14.17.07.05.

B. This chapter applies to all cannabis grown in Maryland intended for either adult-use or medical-use sales.

.02 Cannabis Grower Premises.

A. A licensed grower facility shall:

(1) Be located within Maryland;

(2) Conform to local zoning and planning requirements; and

(3) Conspicuously display a grower license at the licensed premises.

B. A licensed grower facility premises shall be secured in accordance with COMAR 10.62.10.04—10.62.10.08.

C. A licensed grower facility containing greenhouse or field cultivation premises shall be secured in accordance with COMAR 10.62.10.03.

D. A licensed grower facility may not make modifications or renovations:

(1) Without prior approval by the Maryland Cannabis Administration; and

(2) That increase a standard grower licensed capacity to greater than the canopy limits prescribed in Alcoholic Beverages and Cannabis Article, §36-402(b), Annotated Code of Maryland.

E. Micro growers may not operate a facility greater than the limits established in Alcoholic Beverages and Cannabis Article, §36-401(c)(2)(i), Annotated Code of Maryland.

.03 Cannabis Grower Controls.

A licensed grower facility shall:

A. Grow cannabis in accordance with COMAR 10.62.11;

B. Record inventory in accordance with COMAR 10.62.12; and

C. Implement quality controls in accordance with COMAR 10.62.15.

.04 Product Returned for Destruction and Disposal of Green Waste.

A. A licensed grower shall accept any product returned for destruction and record as green waste.

B. A licensed grower shall otherwise destroy any other product recorded as green waste with standard operating procedures.

.05 Product Reservations and Trade Practices.

A. A grower licensed under COMAR 14.17.06.06 or COMAR 14.17.07.05 shall make a good faith effort to allow for at least 10 percent of cannabis grown to be:

(1) Transferred to a licensed processor to be produced into a cannabis product by a licensee that has no common ownership interest or control with the grower licensee; or

(2) Upon licensure of social equity applicants and the operation of social equity businesses as defined in COMAR 14.17.01, transferred to be produced into cannabis products by social equity businesses.

B. The Administration may query the seed-to-sale tracking system to ensure compliance with §A of this regulation.

C. If a licensed grower is found in violation of this regulation, the Administration may:

(1) Issue a fine; and

(2) Restrict, suspend, or revoke the license.

14.17.11 Cannabis Processor Operations

Authority: Alcoholic Beverages and Cannabis Article, §§36-202, 36-203, and 36-401, Annotated Code of Maryland

.01 Scope.

Unless otherwise specified this chapter applies to a business licensed to process cannabis under COMAR 14.17.06.07 and COMAR 14.17.07.06.

.02 Cannabis Processor Premises.

A. A licensed processor facility shall:

(1) Be located within Maryland;

(2) Conform to local zoning and planning requirements; and

(3) Conspicuously display a processor license at the licensed premises.

B. A licensed processor facility premises shall be secured in accordance with COMAR 10.62.21.03—10.62.21.07.

C. No modifications or renovations to licensed processor premises shall be undertaken without prior approval by the Maryland Cannabis Administration.

.03 Cannabis Processor Facility Operations.

Licensed processor operations shall be conducted in accordance with COMAR 10.62.22.

.04 Cannabis Product Processing.

A licensed processor shall produce cannabis products in accordance with COMAR 10.62.23.

.05 Edible Cannabis Product Processing.

A. A licensed processor that produces edible cannabis products as defined in COMAR 14.17.01 shall maintain facilities and manufacture edible products in accordance with COMAR 10.62.37.04—10.62.37.10 and 14.17.13.05.

B. A licensed processor may apply to the Administration for a permit to produce edible products in accordance with COMAR 10.62.37.03.

C. The permit issued by the Administration shall verify compliance with COMAR 10.62.37.04—10.62.37.10.

.06 Micro Processor Premise and Operations.

Micro processors may not process more cannabis than the limits established in Alcoholic Beverages and Cannabis Article, §36-401(c)(2)(ii), Annotated Code of Maryland.

.07 Product Returned for Destruction and Disposal of Green Waste.

A. A licensed processor shall accept any product returned for destruction and record as green waste.

B. A licensed processor shall otherwise destroy any other product recorded as green waste in accordance with standard operating procedures.

14.17.12 Cannabis Dispensary Operations

Authority: Alcoholic Beverages and Cannabis Article, §§36-202, 36-203, 36-401, and 36-410, Annotated Code of Maryland

.01 Scope.

Unless otherwise specified, this chapter applies to all business licensed to dispense cannabis under COMAR 14.17.06.08 or COMAR 14.17.07.08.

.02 Standard Cannabis Dispensary.

A. A standard dispensary premises licensed under COMAR 14.17.06.07 shall:

(1) Be located in Maryland;

(3) Conform to all local zoning and planning requirements;

(4) Be secured and operated in accordance with COMAR 10.62.27.03—.09; and

(5) Provide accommodations for qualifying patients and registered caregivers in accordance with COMAR 14.17.04.06.

B. A licensee may not make modifications or renovations to the standard cannabis dispensary premises licensed under COMAR 14.17.06.08 without the prior approval of Maryland Cannabis Administration.

C. The Administration may require a dispensary licensed under this regulation to conspicuously display:

(1) Valid proof of license; and

(2) Minimum purchase age and identification requirements; and

(3) Other information related to health and safety provided by the Administration.

D. Any display required by the Administration under §C of this regulation shall be in a manner and size determined by the Administration.

E. A standard dispensary shall restrict access to the licensed premises to only:

(1) Qualifying patients;

(2) Registered caregivers; and

(3) Individuals 21 years old or older.

F. A standard dispensary may provide drive-through dispensing services in accordance with COMAR 10.62.27.10.

.03 Micro Dispensary or Delivery Service.

A. Prior to the placement of any order, a micro dispensary licensed to dispense cannabis under COMAR 14.17.07.08 shall verify the consumer is:

(1) 21 years old or older;

(2) A qualifying patient; or

(3) A registered caregiver for a qualifying patient.

B. A micro dispensary licensed to dispense cannabis under COMAR 14.17.07.08 may not:

(1) Make deliveries to addresses on publicly owned land, schools, day care centers, or youth centers;

(2) Transport cannabis or cannabis products not associated with an active invoice, order, or product manifest;

(3) Transport cannabis or cannabis products in any vehicle noncompliant with §C of this regulation;

(4) Dispense cannabis or cannabis products without a prior order submitted to the licensed business; and

(5) Wear any clothing or symbols that may indicate ownership or possession of cannabis;

C. Deliveries shall be made by a registered agent or micro dispensary owner in an enclosed vehicle that:

(1) Maintains secure storage;

(2) Has and displays a current license number from the Administration;

(3) Is insured as required by law; and

(4) Does not display any sign or illustration related to cannabis, cannabis products, or a cannabis licensee.

D. The Administration may, as a condition of licensure, inspect the vehicle for compliance with §§C(1)—(4) of this regulation.

E. While making deliveries under this regulation, a licensed micro dispensary shall only travel:

(1) Between licensees, registrants, or from one delivery address to another delivery address; and

(2) In Maryland.

F. A licensed micro dispensary may not carry cannabis or cannabis products in the delivery vehicle with a value in excess of $5,000 at any time.

G. For the purposes §F of this regulation, the value of cannabis goods shall be determined using the current retail price of all cannabis or cannabis products carried by or within the delivery vehicle.

.04 Dispensing Cannabis.

A. Dispensing Medical Cannabis.

(1) A licensed dispensary shall dispense medical cannabis in accordance with COMAR 10.62.30.03.

(2) Any dispensing to a qualified patient or registered caregiver shall be recorded by the agent as a sale of medical cannabis using the seed-to-sale tracking system.

B. Dispensing Adult-Use Cannabis.

(1) A registered dispensary agent shall dispense cannabis only to a consumer who has presented a government-issued photo identification card that is valid, unexpired, and contains the consumer’s birth date.

(2) A government-issued identification card under §B(1) of this regulation includes:

(a) State driver’s license;

(b) U.S. passport;

(c) U.S. passport card;

(d) Non-driver’s state photo ID card;

(e) Foreign passport;

(f) U.S. military ID card; and

(g) Tribal card.

(3) A government-issued photo identification card does not include a student identification card issued by a public institution or university.

(4) Before any distribution of cannabis, a dispensary agent shall query the Administration data network using a unique log-in that identifies the registered dispensary agent.

(5) At the point of sale, a dispensary agent shall verify that the consumer is 21 years old or older using the consumer’s government-issued photo identification.

(6) A dispensary agent may provide information on:

(a) The available types of cannabis, cannabis varieties, and cannabis finished products;

(b) Methods of cannabis administration; and

(c) How to return unused cannabis for disposal.

(7) Sales limits.

(a) A dispensary agent may not knowingly dispense to an individual an amount of cannabis or cannabis products greater than the personal use amount under Criminal Law Article, §5-101, Annotated Code of Maryland, in a single day.

(b) For the purposes of calculating the personal use amount of cannabis that can be dispensed, an individual may not purchase more than:

(i) 1.5 ounces of usable cannabis products as defined in COMAR 14.17.01;

(ii) 12 grams of concentrated cannabis products;

(iii) Edible cannabis products, capsules, and tinctures that do not exceed 750 milligrams of tetrahydrocannabinol;

(iv) Two or fewer cannabis plants.

(c) For the purpose of determining sales limits under this subsection, cannabis vaporizing devices shall be weighed and considered as concentrated cannabis products.

(8) A registered dispensary agent may decline to dispense cannabis to a consumer if, in the professional opinion of the registered dispensary agent, the consumer appears to be:

(a) Currently under the influence of drugs or alcohol;

(b) Attempting to purchase cannabis products for resale or diversion; or

(c) Obtaining an amount of cannabis products greater than the personal use amounts under §B(7) of this regulation.

(9) Consumers purchasing cannabis under this regulation may purchase:

(a) Usable cannabis products as specified in COMAR 14.17.13.11;

(b) Cannabis vaporizing devices as specified in COMAR 14.17.13.08; or

(c) Edible cannabis products, capsules, and tinctures under COMAR 14.17.13 with less than:

(i) 10 milligrams of THC per serving; and

(ii) 100 milligrams of THC per container.

(10) A licensed dispensary may not sell or distribute any cannabinoid products that are not derived from naturally occurring biologically active chemical compounds.

C. Dispensing Controls.

(1) A licensed dispensary may not sell, transfer, or deliver cannabis or cannabis products unless the licensee verifies by means of a valid driver’s license or other government–issued photo identification containing the bearer’s date of birth, in accordance with Alcoholic Beverages and Cannabis Article, §36-1101(a), Annotated Code of Maryland;

(2) A licensed dispensary shall use the seed-to-sale tracking system to track and record all cannabis sales;

(3) A licensed dispensary may not distribute samples of cannabis or cannabis products to consumers;

(4) A registered agent, or owner of a licensed dispensary may not dispense cannabis to themselves; and

(5) If a licensed dispensary offers reduced cost or discount cannabis or cannabis products to an agent, the reduced cost or discount available shall:

(a) Be set forth in a standard operating procedure;

(b) Be distributed in accordance with the standard operating procedure.

.05 Coordination of Enforcement Efforts between Maryland Cannabis Administration and the Comptroller of Maryland.

A. The Administration may query the seed-to-sale tracking system and shall, upon request from the Comptroller of Maryland, provide information from the seed-to-sale tracking system to the Comptroller of Maryland to ensure proper compliance, collection, and assessment of the sales and use tax by licensed dispensaries and on-site consumption establishments.

B. If a licensee fails to pay a tax to the Office of the Comptroller when due under Tax-General Article, Annotated Code of Maryland, the Administration may:

(1) Levy a fine; and

(2) Restrict, suspend, or revoke the cannabis license.

.06 Product Reservations and Trade Practices.

A. Products not authorized for adult-use consumers under Regulation .04B of this chapter shall only be sold, distributed, or otherwise dispensed to qualifying patients and caregivers.

B. Cannabis dispensaries licensed under COMAR 14.17.06.08 or COMAR 14.17.07.07 shall make a good faith effort to allow for at least 25 percent of product available for retail sales to be:

(1) Products grown, manufactured, extracted, or otherwise produced by a licensee that has no common ownership interest or control with the dispensary licensee; and

(2) Upon licensure of social equity applicants and the operation of social equity businesses as defined in COMAR 14.17.01, products grown, manufactured, extracted, or otherwise produced by social equity businesses.

C. The Administration may query the seed-to-sale tracking system to ensure compliance with §B of this regulation.

D. If a licensed dispensary is found in violation of this regulation, the Administration may:

(1) Issue a fine; and

(2) Restrict, suspend, or revoke the license.

.07 Product Returned for Destruction and Disposal of Green Waste.

A. A licensed dispensary shall dispose of green waste in accordance with COMAR 10.62.30.08.

B. A licensed dispensary shall accept products returned for destruction in accordance with COMAR 10.62.30.10.

.08 Online Ordering.

A. An online order system for cannabis or cannabis products shall:

(1) Employ a neutral age-gate to establish that the consumer is 21 years old or older or otherwise validate the individual is a qualifying patient or a registered caregiver;

(2) Include a notice that a valid, government-issued photo identification card as set forth in Regulation .04B(2) of this chapter is required to receive the order of cannabis or cannabis products;

(3) After confirming the consumer is 21 years of age or older, collect consumer, qualifying patient or registered caregiver signature and contact information, including:

(a) Email; or

(b) Telephone number.

B. An online order system may be used to place pre-orders for:

(1) Pick-up at a licensed dispensary for patients, caregivers, and consumers; and

(2) Delivery for patients and caregivers.

C. Until the consumer, qualifying patient, or registered caregiver presents a valid, government-issued identification card as set forth in Regulation .04B(2), a dispensary may not:

(1) Dispense cannabis products; or

(2) Collect payment.

D. A licensed dispensary may not sell or otherwise transfer any cannabis or cannabis products to a consumer through an unlicensed third party, intermediary business, broker, or any other business or entity.

F. A licensed dispensary may only deliver cannabis in accordance with COMAR 14.17.06.08 and COMAR 14.17.12.03, depending on license type.

.09 Hours of Operations.

A licensed dispensary may not operate:

A. For more than 12 hours in a day;

B. Past 10 p.m.; or

C. Before 8 a.m.

14.17.13 Cannabis Products

Authority: Alcoholic Beverages and Cannabis Article, §§36-202, 36-203, and 36-203.1, Annotated Code of Maryland

.01 Definitions.

A. In this chapter, the following terms have the meanings as indicated.

(1) “Current Good Manufacturing Practices” or “cGMP” means a manufacturing process that complies with 21 CFR Part 111 or 21 CFR Part 210.

(2) “Food” means any substance that is used as food or drink for human beings or as a component of food or drink for human beings.

(3) “Food ingredient” means a substance that is used as a component of food, including:

(a) Flavoring;

(b) Food coloring; and

(c) Preservatives.

(4) “Ingredient” means any component of an edible cannabis product that is intended for human consumption, approved by the Administration, and composed of:

(a) Food or food ingredients; or

(b) Cannabis.

(5) “Permittee” means a licensed processor authorized by the Administration to manufacture edible cannabis products.

.02 Finished Products for Retail Sale.

A. A licensed dispensary is only authorized to dispense a finished product that has been sealed, labeled, and packaged in accordance with COMAR 14.17.18.

B. Except as described in Regulation .11 of this chapter, a licensed dispensary shall only obtain finished cannabis products from a licensed grower or processor.

.03 Product Reservations.

A. Medical Cannabis Products.

(1) The Administration shall require that certain finished cannabis products be dispensed only to qualifying patients or registered caregivers to:

(a) Ensure adequate supply of medical cannabis products; and

(b) Reserve high potency products for medical patients.

(2) Products reserved for qualifying patients under this section include:

(a) Concentrated cannabis products;

(b) Edible cannabis products, infused non-edible cannabis products, capsules, and tinctures containing more than:

(i) 10 milligrams of tetrahydrocannabinol per serving; or

(ii) 100 milligrams of tetrahydrocannabinol per package.

(3) No part of this section may be construed to prohibit the dispensing of other finished cannabis products to qualifying patients in accordance with COMAR 14.17.12.04, including:

(a) Cannabis vaporizing devices;

(b) Home cultivation products;

(c) Usable cannabis products; and

(d) Edible cannabis products containing less than:

(i) 10 milligrams of tetrahydrocannabinol per serving; or

(ii) 100 milligrams of tetrahydrocannabinol per package.

B. Adult-Use Cannabis Products. Individuals purchasing cannabis products for adult-use may purchase:

(1) Cannabis vaporizing devices;

(2) Home cultivation products;

(3) Usable cannabis products; and

(4) Edible cannabis products, tinctures, and capsules containing equal to or less than:

(a) 10 milligrams of tetrahydrocannabinol per serving; or

(b) 100 milligrams of tetrahydrocannabinol per package.

C. Licensed dispensaries shall otherwise provide products for retail sale in accordance with COMAR 14.17.12.06.

.04 Product Testing.

A. Finished cannabis products for retail sale shall be tested by an independent testing laboratory authorized by the Administration in accordance with COMAR 14.17.08 prior to any sale, distribution, or dispensing.

B. Testing, sampling, and other laboratory protocols shall be performed by the independent testing laboratory in accordance with the Administration’s Technical Authority.

.05 Edible Cannabis Products.

A. General Requirements.

(1) Before engaging in the business of possessing, processing, packaging, labeling, transferring, transporting, selling, or distributing edible cannabis products to a dispensary, a licensed processor shall obtain a permit from the Administration in accordance with COMAR 10.62.37.03.

(2) Prior to offering the products for distribution or sale to a licensed dispensary, a permittee shall obtain approval from the Administration for all edible cannabis products by submitting a request in in a manner prescribed by the Administration.

(3) A permittee seeking approval to offer an edible cannabis product shall submit:

(a) A photograph, digital image, or digital rendering of the product, labeling, and packaging;

(b) The varying levels of potency and dosing of the edible cannabis product;

(c) The recipe, including the production process, for manufacturing the edible cannabis product; and

(d) Any scientific studies or laboratory testing results supporting the stability and approximate expiration date of the edible cannabis product.

(4) The Administration shall review and approve each edible cannabis product before the product may be commercially manufactured or sold by a permittee, to ensure the:

(a) Product complies with the requirements of this chapter; and

(b) Safety of minors.

B. Dosage Requirements.

(1) Unless expressly authorized by the Administration, an edible cannabis product may not contain more than:

(a) 10 milligrams of THC per serving; and

(b) 100 milligrams of THC per package.

(2) Each single serving contained in a package of a multiple-serving edible cannabis product shall be physically separated in a way that enables an individual to determine how much of the edible cannabis product constitutes a single serving.

(3) An intact product form containing multiple servings does not meet the requirements of §B(2) if it has demarcations or delineations on the product to indicate individual servings.

(4) The Administration may approve a request to manufacture a high potency edible cannabis product containing more than 10 milligrams of THC per serving or 100 milligrams of THC per package if:

(a) A permittee submits a request in a form prescribed by the Administration; and

(b) The request complies with §G of this regulation.

(5) An edible cannabis product consisting of multiple servings shall be homogenized so that each serving contains the same concentration of THC.

C. Appearance of Edible Cannabis Products.

(1) A permittee shall only manufacture or distribute solid edible cannabis product in geometric shapes.

(2) A permittee may not manufacture an edible cannabis product that due to its shape, design, or flavor is likely to appeal to minors.

(3) The manufacture or sale of edibles in the following shapes is prohibited:

(a) Human, animal, toy, or fruit;

(b) A shape that bears the likeness or contains characteristics of a realistic or fictional human, animal, or fruit, including artistic, caricature, or cartoon renderings; and

(c) A commercially available food or beverage product that targets, or is primarily marketed to minors.

D. Liquid Edible Product Requirements.

(1) A liquid edible product container may not contain more than a single serving per container.

(2) A single serving of a liquid edible product may not exceed 10 milligrams of THC per container;

(3) A liquid edible product shall otherwise comply with this regulation.

E. Prohibited Products.

(1) Edible cannabis products may not contain:

(a) Meat;

(b) Seafood;

(c) Unpasteurized eggs; or

(d) Unpasteurized dairy of any type.

(2) The following types of products may not be sold:

(a) Alcoholic beverages, as defined in Alcoholic Beverage and Cannabis Article, §1-101, Annotated Code of Maryland; and

(b) Any product containing any non-cannabis additive that would increase potency or toxicity, or that would create an unsafe combination with other psychoactive substances, including nicotine and caffeine.

(3) The prohibition in §E(2)(b) of this regulation does not apply to products containing naturally occurring caffeine, such as coffee, tea, or chocolate.

F. Compliance with State and Federal Food Safety Requirements. In addition to the other requirements set forth in this chapter, a permittee shall comply with all applicable food safety regulations including:

(1) 21 CFR, as amended;

(2) 21 U.S.C. §343, as amended;

(3) 21 U.S.C. §§451-471, as amended; and

(4) 21 U.S.C. §§601-695, as amended.

G. High Potency Edible Cannabis Products.

(1) Edible products produced with approval by the Administration under §B(4) of this regulation shall comply with Current Good Manufacturing Practices under 21 CFR Part 111 or 21 CFR Part 210.

(2) A permittee shall submit to the Administration a third-party certification that demonstrates compliance with §G(1) of this regulation.

(3) Demonstration of compliance required under §G(2) shall include:

(a) Proof of the third party’s accreditation to certify for Current Good Manufacturing Practices that complies with 21 CFR Part 111 or 21 CFR Part 210; and

(b) An attestation that the third party performed a facility audit of the licensed processor’s facility using an audit checklist within the scope of accreditation that complies with 21 CFR Part 111 or 21 CFR Part 210; and

(c) The audit checklist for cGMP 21 CFR Part 111 or 21 CFR Part 210, facility score, the audit checklist score scale, and a corrective plan to remediate any deficiencies identified during the audit.

(3) Edible products produced with approval by the Administration under §B(4) of this regulation may not:

(a) Be a liquid edible product as described in §D of this regulation; or

(b) Contain more than:

(i) 40 milligrams of THC per serving; and

(ii) 400 milligrams of THC per package.

(4) A dispensary shall only sell or dispense high potency edible products to qualified patients and registered caregivers.

(5) A processor shall label high potency edible products in accordance with COMAR 14.17.18.04.

H. The Administration shall maintain permittee trade secrets in conformity with COMAR 10.62.37.11.

.06 Capsule and Tincture Products.

A. A tincture shall:

(1) Contain no additional non-cannabis ingredients except potable water, unless approved by the Administration; and

(2) For vegetable oil tinctures, are manufactured in accordance with the regulation of edible cannabis products under COMAR 14.17.13.05E—H and COMAR 10.62.37, except for COMAR 10.62.37.03 and COMAR 10.62.37.12B.

(3) Be dispensed in a container that:

(a) Has a resealing, child-resistant cap, or closure; and

(b) Includes within the package a measuring device that is appropriate for the product form, such as a measuring cap or dropper.

B. A tincture may have a non-opaque strip or measuring marks on the bottle or package, but the strip or marks do not suffice as a measuring device under §A of this regulation.

C. A licensee is encouraged to manufacture varying levels of potency for each tincture or capsule product the permittee distributes, including products containing:

(1) 2.5 milligrams of THC per serving; and

(2) 5 milligrams of THC per serving.

D. A dispensary shall only sell or dispense capsule and tincture products with more than 10 milligrams of tetrahydrocannabinol per serving or 100 milligrams tetrahydrocannabinol per package to qualifying patients or registered caregivers.

.07 Home Cultivation Products.

A. A licensed dispensary is authorized to sell and distribute home cultivation products intended to assist with the home cultivation of cannabis.

B. A licensed dispensary may not sell more than:

(1) Two seedlings to an adult use consumer; and

(2) Four seedlings to a qualifying patient who is 21 years old or older or to a registered caregiver.

C. Seedlings not sold by a dispensary shall be destroyed and recorded as green waste in accordance with standard operating procedures if the plant is:

(1) Taller than six inches;

(2) Wider than six inches; or

(3) Otherwise in a flowering or vegetative state.

D. A licensed dispensary may not cultivate cannabis plants.

E. A licensed dispensary shall only acquire home cultivation products under this regulation from a licensed grower.

.08 Cannabis Vaporizing Devices.

A. A dispensary may sell cannabis vaporizing devices to:

(1) Individuals 21 years old or older; or

(2) Registered patients and qualifying caregivers.

B. A cannabis vaporizing device which may be sold under §A of this regulation:

(1) May include a cartridge containing a concentrated or infused cannabis liquid for the purposes of heating and producing a vapor; and

(2) May not include any solid or semi-solid substances such as waxes, shatters, resins, or any other concentrated cannabis product that may be consumed using a vaporizing device or by heating the product in such a way to produce vapor, except to qualifying patients or registered caregivers.

C. Cannabis vaporizing devices may not include:

(1) Vitamin E Acetate; or

(2) Any other solvent, solution, or other substance deemed to be a risk to public health or safety by the Administration through the Technical Authority.

.09 Infused Non-Edible Products.

A. A dispensary shall only sell or dispense infused non-edible products that contain more than 10 milligrams tetrahydrocannabinol per serving or 100 milligrams tetrahydrocannabinol per package to qualifying patients or registered caregivers.

B. Infused non-edible products containing more than 10 milligrams tetrahydrocannabinol per serving or 100 milligrams tetrahydrocannabinol per package shall be labeled in accordance with COMAR 14.17.18.04.

.10 Concentrated Cannabis Products.

A. A dispensary shall only sell or dispense concentrated cannabis products to qualifying patients or registered caregivers.

B. Concentrated cannabis products shall be labeled in accordance with COMAR 14.17.18.04.

.11 Usable Cannabis Products.

A. Usable cannabis products may be sold to:

(1) Individuals 21 years of age or older; or

(2) Registered patients and qualifying caregivers.

B. A licensed dispensary may package, repackage, wrap, roll, or otherwise create usable cannabis products from usable cannabis in accordance with §§C and D of this regulation.

C. Repackaging Requirements.

(1) Handwashing Sinks.

(a) Each room used for the creation of cannabis products shall have a handwashing sink.

(b) The handwashing sink shall:

(i) Be accessible to all dispensary agents;

(ii) Provide warm water of sufficient volume under pressure of effective hand washing procedures as outlined in this chapter.

(c) A dispensary shall maintain at least one handwashing sink for the following number of agents who are engaged in repackaging while on duty at the same time:

(i) Every 15 agents; and

(ii) Any fraction of 15 agents.

(2) Scales.

(a) A scale used by a licensed dispensary for the creation of usable cannabis products shall be:

(i) A National Type Evaluation Program approved device;

(ii) Registered and certified by the Maryland Department of Agriculture in accordance with COMAR 15.03.08; and

(iii) Calibrated and recertified annually.

(b) A licensed dispensary shall make records and certifications required under (a) of this subsection available to the Administration available upon request.

(3) Sanitation.

(a) Scales, surfaces, and other equipment use for the purposes of creating usable cannabis products shall be cleaned and sanitized:

(i) Between shifts;

(ii) Between packaging, repackaging, or otherwise creation of usable cannabis products with different usable cannabis batches;

(iii) Before beginning any packaging, repackaging, or otherwise creation of usable cannabis products; and

(iv) After the completion of any packaging, repackaging, or otherwise creation of usable cannabis products.

(b) Licensed dispensaries shall maintain an accurate log of cleaning and sanitation required under §(a) of this subsection.

D. Products produced by dispensaries under this regulation shall be packaged and labeled in accordance with COMAR 14.17.18.

E. Licensed growers or processors making usable cannabis products shall also comply with §C—D of this regulation prior to the transfer to a licensed dispensary.

F. Transfer limits and Inventory Controls on Usable Cannabis.

(1) Usable cannabis transferred from a licensed grower to a licensed dispensary for the purposes of creation of usable cannabis products may not exceed:

(a) 1 pound in a single package; or

(b) 5 pounds in a single transfer.

(2) A licensed dispensary shall have no more than 10 pounds of usable cannabis in inventory at a given time for the purposes of creating usable cannabis products.

(3) The Administration may query the seed-to-sale tracking system to ensure compliance with this section.

G. A dispensary may not weigh, package, repackage, or create usable cannabis products at the point of sale, or conduct deli-style sales as described in COMAR 10.62.30.09.

14.17.14 Complaints, Enforcement, Record Keeping, and Inspections of Cannabis Businesses

Authority: Alcoholic Beverages and Cannabis Article, §§36-202, 36-203, and 36-901, Annotated Code of Maryland

.01 Complaints, Adverse Events, and Recall.

A. The Administration shall establish a procedure to receive, organize, store, and respond to all oral, written, electronic or other complaints regarding any cannabis product and severe adverse events.

B. Any complaints or adverse event reports received by a licensee or certifying provider shall be reported to the Administration.

C. In the event a licensee or certifying provider receives a complaint associated with a serious adverse event the licensee or certifying provider, shall report the complaint within 24 hours to:

(1) The Administration;

(2) If applicable, the licensed grower from which the cannabis originated; and

(3) If applicable, the licensed processor from which the cannabis product originated.

D. A complaint shall be investigated by the Administration in accordance with COMAR 10.62.17.03.

E. A licensee shall develop a procedure for the recall of cannabis products in accordance with COMAR 10.62.17.04.

.02 Records.

The licensee shall maintain records in accordance with COMAR 10.62.32.

.03 Inspections.

Inspections shall be conducted in accordance with COMAR 10.62.33.

.04 Discipline and Enforcement.

A. Diversion.

(1) A licensee, registrant, agent, or employee may not:

(a) Divert cannabis or cannabis products for any unauthorized sale or distribution;

(b) Fail to maintain records in accordance with this subtitle, COMAR 10.62, and the standard operating procedures of the licensee;

(c) Fail to accurately track, tag, or otherwise record inventory in the seed-to-sale tracking system; or

(d) Sell or dispense cannabis or cannabis products in manner that:

(i) Exceeds the personal use amount of cannabis or cannabis products;

(ii) Is reasonably expected to be in violation of the personal use amount; or

(iii) Could otherwise reasonably give rise to any other violation of law.

(2) A licensee, registrant, agent, or employee may not conduct a series of transactions that would be in violation of §A(1)(d) of this regulation.

B. Health Endangerment.

(1) A licensee, registrant, agent, or employee may not:

(a) Apply any contaminant to cannabis or cannabis products;

(b) Handle cannabis or cannabis products in a manner that would endanger health and safety;

(c) Store cannabis or cannabis products in a manner that would endanger health and safety;

(d) Otherwise risk the health and safety of a patient or consumer.

(2) A licensee, registrant, agent or employee may not sell, dispense or otherwise distribute cannabis or cannabis products to an individual younger than 21 years old unless the individual is a:

(a) Qualifying patient over the age of 18; or

(b) Registered caregiver.

C. A licensee or registrant may not substantially deviate or demonstrate a pattern of deviation from the standard operating procedures or terms set forth in the license.

D. The Administration may fine, suspend, restrict, revoke, or otherwise sanction any cannabis licensee or registrant for:

(1) Any violation of the Alcoholic Beverages and Cannabis Article, Title 36, Annotated Code of Maryland;

(2) Any violation of this regulation;

(3) Any violation of this chapter;

(4) Any other violation of this subtitle and COMAR 10.62;

(5) Restricting, limiting, or otherwise impeding an inspection or investigation by the Administration; or

(6) Any other violation of State, federal, or local:

(a) Law;

(b) Regulation; or

(c) Ordinances.

.05 Fines, Hearings, and Suspension.

A. A licensee, registrant, agent, or employee who violates Regulation .04A—B of this chapter is subject to a fine of up to $10,000 per violation.

B. A licensee, registrant, agent, or employee who violates Regulation .04C—D of this chapter is subject to a fine of up to $5,000 per violation.

C. The licensee, registrant, agent, or employee assessed a fine under this regulation may:

(1) Elect to pay the imposed fine; or

(2) Request a hearing not later than 30 days after the receipt of the notice of the fine.

D. Hearings requested under this regulation shall be conducted in accordance with COMAR 14.17.22.

E. The Administration shall remit any penalty collected under this regulation to either the:

(1) Medical Cannabis Compassionate Use Fund;

(2) Cannabis Business Assistance Fund;

(3) Community Reinvestment and Repair Fund; or

(4) Cannabis Public Health Fund.

F. Funds from fines remitted under §E of this regulation shall be distributed at the discretion of the Administration by evaluating:

(1) Available fund balances;

(2) Uses of the fund; and

(3) Future needs of the fund.

G. Summary Suspension.

(1) The Administration shall order the summary suspension of a license or registration if the Administration determines that the threat to public health, safety, or welfare requires immediate suspension of a license or registration.

(2) The Administration shall promptly give the licensee or registrant:

(a) Written notice of the suspension, the findings, and the reasons that support the findings; and

(b) An opportunity for a hearing before the Administration.

(3) Service of notice of intent to summarily suspend a license or registration shall be made by:

(a) Hand delivery;

(b) Certified mail to the address the licensee or registrant is required to maintain with the Administration; or

(c) Other reasonable means to effect service.

(4) A licensee or registrant aggrieved by the action of the Administration under this regulation may appeal the Administration’s action by filing a request for a hearing not later than 30 days after receipt of notice of the Administration's action.

H. Show Cause Hearing.

(1) In addition to the right to request a hearing provided in §G(4) of this regulation, a licensee or registrant aggrieved by the action of the Administration under §G of this regulation shall be provided with the opportunity for a hearing to show cause why the Administration should lift the summary suspension.

(2) If requested in writing, the show cause hearing shall be held promptly within a reasonable time after the effective date of the order of the summary suspension.

(3) The show cause hearing will be a non-evidentiary hearing to provide the parties with an opportunity for oral argument on the summary suspension.

(4) The show cause hearing shall be conducted before the Administration director or a designee who:

(a) Shall determine procedural issues;

(b) May impose reasonable time limits on each party’s oral argument; and

(c) Shall make rulings reasonably necessary to facilitate the effective and efficient operation of the show cause hearing.

(5) At the conclusion of the show cause hearing, the Administration director or a designee may:

(a) Affirm the order of summary suspension;

(b) Rescind the order of summary suspension;

(c) Enter into a consent order; or

(d) Enter into an interim order warranted by the circumstances of the case, including one providing for a stay of the summary suspension, subject to certain conditions.

(6) After the show cause hearing, if the Administration Director or a designee decides to continue the summary suspension, the licensee or registrant aggrieved by the decision may pursue a hearing in accordance with COMAR 14.17.22.

(7) Contesting a summary suspension through a show cause hearing does not toll or otherwise excuse the requirement that an aggrieved party request a hearing within 30 days of notice of the agency action, as set forth in §G(4) of this regulation.

(8) If, after due notice, the licensee or registrant against whom the action is contemplated does not appear, the Administration may hear and determine the matter.

.06 Advertising.

A. All advertisements for cannabis products, businesses, licensees, or other cannabis-related services shall comply with the requirements of Alcoholic Beverages and Cannabis Article, §§36-901—36-903, Annotated Code of Maryland.

B. A standard licensee, registrant, agent, or employee who violates §A of this regulation:

(1) Is subject to a fine not exceeding:

(a) $1,000 for the first violation;

(b) $5,000 for the second violation occurring within 24 months after the first violation; and

(c) $10,000 for each subsequent violation occurring within 24 months after the preceding violation; and

(2) May elect to:

(a) Pay the imposed fine; or

(b) Request a hearing not later than 30 days from the receipt of the fine.

C. In accordance with the hearing provisions in Regulation .05 of the chapter, the Administration may deny, suspend, or revoke the license or registration of a licensee, registrant, agent, or employee who violates §A of this regulation.

14.17.15 Cannabis Business Agents

Authority: Alcoholic Beverages and Cannabis Article, §§36-202, 36-203, 36-501, and 36-1001—36-1003, Annotated Code of Maryland

.01 Scope.

This chapter pertains to the regulation of cannabis agents as defined in COMAR 14.17.01.

.02 Registration.

A. Each agent shall be registered with the Administration before the agent may volunteer or work for a licensee or registrant.

B. Cannabis agent registration shall be conducted pursuant to Alcoholic Beverages and Cannabis Article, §36-501, Annotated Code of Maryland.

C. A licensee shall apply to register an agent by submitting to the Administration:

(1) The name, address, date of birth, and Social Security Number or Individual Tax Identification Number of an agent;

(2) Documentation of the submission of fingerprints of the agent of to the Criminal Justice Information System’s Central Repository in accordance with the Alcoholic Beverages and Cannabis Article, §36-505, Annotated Code of Maryland;

(3) The request for the criminal history record information of the agent to be forwarded to the Administration.

D. The Administration may not register as a cannabis agent an individual who has been convicted of or pleaded nolo contendere to a crime involving moral turpitude, whether or not any appeal or other proceeding is pending to have the conviction or plea set aside.

E. The Administration may not deny a cannabis agent registration based on any cannabis-related offense occurring before July 1, 2023.

.03 Registered Agent Identification Cards.

A. The Administration shall issue to each registered agent an identification card which includes a photograph of the face of the registered agent taken no more than 6 months before the date of the application.

B. At all times every registered agent at a licensed or registered premises shall visibly wear the identification card issued to the registered agent by the Administration.

C. The agent shall apply for renewal of the identification card every 2 years.

D. If a registered agent’s identification card is lost, destroyed, or stolen, within 24 hours of becoming aware of the loss, destruction or theft, the licensee shall:

(1) Report the loss, destruction, or theft to the Administration;

(2) Apply for a replacement cards; and

(3) Pay a replacement card fee specified in COMAR 14.17.21.

E. An identification card remains the property of the Administration and the Administration may order the return or seizure of an identification card if the registration is revoked or expires.

F. If a registered agent’s identification card is lost, destroyed, or stolen, a copy of the notification to the Administration shall be evidence of registration until a new card is obtained from the Administration.

.04 Termination.

A. Within 30 days of the termination of a registered agent, the licensee shall:

(1) Take custody of the terminated registered agent’s identification card;

(2) Obtain any keys or other entry devices from the terminated registered agent; and

(3) Ensure the terminated registered agent can no longer gain access to the licensed premises.

B. Within 1 business day of the termination of a registered agent, a licensee shall:

(1) Notify the Administration:

(a) Of the termination and the circumstance of the termination; and

(b) Whether the terminated registered agent has returned the agent’s identification card; and

(2) Initiate delivery of the terminated registered agent’s identification card to the Administration.

C. The Administration shall revoke the registration of an agent upon receiving notification that an agent is no longer associated with a licensee.

D. If a registered agent did not return the agent’s identification card within 30 days of the termination, the Administration shall notify the law enforcement agency with jurisdiction in the licensee’s area.

.05 Training.

A. The licensee shall train all registered agents on:

(1) Federal and State cannabis laws and regulation and other laws and regulations pertinent to the agent’s responsibilities;

(2) Standard operating procedures;

(3) The State alcohol and drug free workplace policy, as identified in COMAR 21.11.08.03;

(4) Detection and prevention of diversion of cannabis;

(5) Security procedures;

(6) Safety procedures including responding to:

(a) A medical emergency;

(b) A fire;

(c) A chemical spill; and

(d) A threatening event such as:

(i) An armed robbery;

(ii) An invasion;

(iii) A burglary; and

(iv) Any other criminal incident.

B. The licensee shall retain training materials and attendance records and make the training materials available for inspection by the Administration.

C. Registered agents shall also be required to complete a responsible vendor training program that:

(1) Meets the minimum requirements under Alcoholic Beverages and Cannabis Article, §§36-1001—36-1003, Annotated Code of Maryland; and

(2) Is registered with the Administration in accordance with §E(4) of this regulation.

D. A responsible vendor training program required under §E of this regulation shall be in addition to the training requirements under §A of this regulation.

E. Responsible Vendor Training Program.

(1) The Administration shall develop an application for a person to conduct a responsible vendor training program.

(2) The application shall at a minimum identify proficiency of the person in the training components of the Alcoholic Beverages and Cannabis Article, §36-1001(c), Annotated Code of Maryland, including:

(a) Detailed schedule of training program time;

(b) Program standards and evaluations for the training program;

(c) Sample curriculum materials providing accurate information on:

(i) Required license, registration, and other business authorization;

(ii) Age requirements, patient registration, and other acceptable identification cards;

(iii) Information on serving size, tetrahydrocannabinol, and other cannabinoid potency, and impairment;

(iv) Record maintenance;

(v) Privacy protection for patients;

(vi) Prohibited or unlawful acts;

(vii) Administrative or criminal liability;

(viii) State and local licensing and enforcement;

(ix) Statutory and regulatory requirements for employees and owners; and

(x) Statutory and regulatory requirements for the sale, transfer, or delivery of cannabis or cannabis products.

(3) Applications approved by the Administration shall be registered with the Administration for a period of three years from the date of approval.

(4) The Administration shall assess a fee for the application, registration, and renewal of a responsible vendor training program under this regulation as specified in COMAR 14.17.21.

(5) A person offering a responsible vendor training program under this paragraph may not have ownership or control of any cannabis license.

(6) A person offering a responsible vendor training program shall:

(a) Maintain records for at least four years; and

(b) Make these records available to the Administration upon request.

.06 Prior Registration.

For a cannabis agent previously registered to work or volunteer with a licensee by the Maryland Medical Cannabis Commission under COMAR 10.62.09, COMAR 10.62.20, or COMAR 10.62.26, registration shall be valid for two years from most recent renewal.

14.17.16 Cannabis Business Owners

Authority: Alcoholic Beverages and Cannabis Article, §§36-202, 36-501, 36-502, 36-503, 36-504, and 36-801, Annotated Code of Maryland

.01 Transfer of Ownership and Control.

A. A person wishing to hold an ownership interest of greater than 5 percent or control in a cannabis license shall comply with the application requirements under the Alcoholic Beverages and Cannabis Article, §36-502, Annotated Code of Maryland.

B. A license issued, regulated, or otherwise authorized under this subtitle or COMAR 10.62 shall only be transferred in accordance with the Alcoholic Beverages and Cannabis Article, §36-503, Annotated Code of Maryland.

C. Applicants and transferees under this chapter shall submit to a criminal history record check in accordance with the Alcoholic Beverages and Cannabis Article, §36-505, Annotated Code of Maryland.

.02 Disclosure of Ownership and Control.

A. Each licensee shall submit a table of organization, ownership, and control with the Administration:

(1) On or before July 1 of each year;

(2) Within 10 business days of any change in ownership interest or control greater than 5 percent; and

(3) Upon request by the Administration.

B. The table of organization, ownership, and control shall identify the management structure, ownership, and control of the licensee, including the:

(1) Name of each owner or principal officer and any other individual or entity with the authority to control the licensee;

(2) The office or position held, if any; and

(3) The percentage of ownership interest, if any.

C. If the licensee is a business entity with publicly traded stock, the identification of ownership shall include:

(1) The name and percentage of ownership interest of each individual or business entity with ownership of more than 5 percent of the voting shares of the entity, to the extent such information is known or contained in 13D or 13G Securities and Exchange Division filings; and

(2) To the extent known, the names and percentage of interest of ownership of persons who are relatives of one another and who together exercise control over or own more than 10 percent of the voting shares of the entity.

D. A licensee that is owned or controlled, in whole or in part, by another entity shall disclose to the Administration:

(1) The relationship between the licensee and the parent or affiliate; and

(2) Each owner, board member, or officer and any other individual with control or management authority over those entities owning or controlling the license.

E. Any individual identified as having ownership or control of a license may not have other ownership interest that exceeds the limitations set forth in Alcoholic Beverages and Cannabis Article, §36-401(e), Annotated Code of Maryland.

.03 Annual Report on Minority Owners and Employees.

On or before November 1 of each year, each licensee shall submit a report in a manner determined by the Administration regarding the licensee’s minority owners and employees.

.04 Mandatory Reporting of Legal Actions.

A. The required reporting under this regulation applies to any owner or manager of a licensee or its parent, affiliate, or any subsidiary who is or was a party to the legal action whether in Maryland or another jurisdiction.

B. Notification.

(1) An owner or manager described in §A of this regulation shall notify and provide a description to the Administration of any of the following events:

(a) The filing of any administrative, civil, or criminal action against the licensee or its parent, affiliate, or subsidiary by any governmental entity, private entity, or individual;

(b) The disposition of any administrative, civil, or criminal action against the licensee or its parent, affiliate, or subsidiary by any governmental entity, private entity, or individual, whether by judgment, final order, consent order, or other negotiated resolution; or

(c) The filing for bankruptcy of the licensee or its parent, affiliate, or subsidiary, the entry of a court order for the placement into receivership, or the date of an assignment for the benefit of creditors.

(2) The notification and description of the event required under §B(1) of this regulation shall be provided to the Administration within 14 calendar days after receiving:

(a) Proper service of process in accordance with the rules of civil or criminal procedure of a court of competent jurisdiction; or

(b) Formal written notice in accordance with the administrative rules of an administrative agency with jurisdiction.

C. The description under §B(2) of this regulation shall include the following:

(1) Title and docket number;

(2) Name and location of the court;

(3) Names of the parties;

(4) General nature and scope of the legal action; and

(5) Any judgment, final order, consent order, or other negotiated resolution.

.05 Prohibited Acts.

A. A licensee may not transfer ownership of the license for the purpose of:

(1) Improperly shielding the license or the value of the license from any judgement or liability; or

(2) Furthering any action or plan of action that violates any State, local or federal law.

B. Except as authorized under Alcoholic Beverages and Cannabis Article, Title 36, Annotated Code of Maryland, a licensee may not be:

(1) A member of the General Assembly;

(2) An employee of the Administration; or

(3) Otherwise be in violation of the Alcoholic Beverages and Cannabis Article, §36-504, Annotated Code of Maryland.

C. An individual, group of individuals or persons may not own multiple, non-majority or unreported shares or interests in a cannabis license unless every holding is a passive interest that:

(1) Has an aggregate ownership interest of less than 5 percent; and

(2) Does not have control over the license.

D. Owners found in violation of this regulation by the Administration may be subject to any of the following sanctions:

(1) Fine;

(2) Suspension or revocation of the licensed business; or

(3) Forced divestiture of the owner from the licensed business.

14.17.17 Secured Creditors and Receivership

Authority: Alcoholic Beverages and Cannabis Article, §§36-202, 36-203, and 36-503, Annotated Code of Maryland

.01 Definitions.

A. In this chapter, the following terms have the meanings indicated:

(1) “Licensee” means a licensed grower, processor, or dispensary.

(2) “Secured creditor” means a lending institution defined under the Financial Institutions Article, §1-101, Annotated Code of Maryland, that has been approved by the Administration to obtain a security interest in the proceeds from an Administration -approved sale of a grower, processor, or dispensary license.

.02 Eligibility Requirements for Secured Creditors.

A. To act as a secured creditor under this chapter, the lending institution shall be approved by the Administration.

B. To request Administration approval, the lending institution shall provide the following documentation to the Administration:

(1) A compliance and reporting plan;

(2) A proposed plan for the appointment of a receiver that meets the requirements set forth in Regulation .05 of this chapter;

(3) Confirmation that the lending institution is in:

(a) Good standing and eligible to conduct business in Maryland; and

(b) Compliance with any regulatory requirements applicable to the lending institution; and

(4) Any other information requested by the Administration.

C. If additional information is requested pursuant to §B(4) of this regulation, the lending institution shall respond within 30 days, or the Administration may deny the request for eligibility as a secured creditor.

D. A secured creditor’s eligibility is effective, provided:

(1) The Administration has not revoked the secured creditor’s eligibility; and

(2) The secured creditor:

(a) Maintains compliance with the eligibility requirements under this chapter; and

(b) Submits an annual report to the Administration attesting to its continued compliance with the eligibility requirements beginning one calendar year after the date the secured creditor is approved.

E. The Administration shall maintain and make available on its website a list of eligible secured creditors approved under this chapter.

.03 Security Interest in a Cannabis License.

A. A licensed grower, processor, or dispensary may pledge an interest in the proceeds from an Administration-approved sale of cannabis license as a security interest for a loan.

B. An eligible secured creditor may obtain a security interest in the proceeds from an Administration-approved sale of a licensed grower, processor, or dispensary if:

(1) The following information has been provided to the Administration:

(a) A copy of the security agreement, subject to the restrictions listed in §C of this regulation; and

(b) Any other information requested by the Administration; and

(2) The Administration approves the secured creditor to obtain a security interest in the license.

C. Security Agreement Exclusions.

(1) A security agreement may not contain provisions that authorize the secured creditor to unilaterally:

(a) Require the loan to become due, except if the licensee materially breaches or defaults on its material obligations as set forth in the security agreement;

(b) Convert the debt under the loan to equity;

(c) Deprive the licensed grower, processor, or dispensary of the right to operate the license; or

(d) Restrict the ability of the licensed grower, processor, or dispensary from making payment on the secured loan through a third party unless the payment restriction would cause the secured creditor to violate a law by which it is governed.

(2) The Administration may restrict a security agreement for any other good cause as determined by the Administration.

D. Scope of a Security Interest in a Cannabis License.

(1) Upon Administration approval under §B of this regulation, a secured creditor may create a security interest in proceeds from the sale of a cannabis license associated with a loan to a licensed grower, processor, or dispensary.

(2) A security interest in a cannabis license entitles the secured creditor to the right to the proceeds from the sale of the cannabis license that occurs in accordance with a disposition plan under Regulation .08 of this chapter.

(3) A security interest in a cannabis license excludes the right to operate the license.

E. The Administration may deny a secured creditor from pursuing disposition of a cannabis license if the Administration determines that the arrangement is intended as a mechanism to circumvent the sale or transfer of ownership requirements under Alcoholic Beverages and Cannabis Article, §36-503, Annotated Code of Maryland.

.04 Selection of an Eligible Receiver.

A. Subject to approval by the Administration under Regulation .05 of this chapter, a secured creditor may select an eligible receiver who is a third party to oversee the disposition of a cannabis license, including the assets of the licensee, if a licensed grower, processor, or dispensary whose cannabis license is subject to an Administration-approved security interest:

(1) Is the subject of an order requiring appointment of a receiver;

(2) Becomes insolvent; or

(3) Otherwise materially breaches or defaults on its material obligations secured by the associated license as set forth in the Administration -approved security agreement.

B. Not later than 10 business days before the Administration approves the receiver, the secured creditor who selects a prospective receiver for approval under Regulation .05 of this chapter shall submit the following information to the Administration:

(1) Proof of the creditor’s secured interest in the proceeds from a sale of the license of the associated licensed grower, processor, or dispensary;

(2) Proof of an order requiring appointment of a receiver, insolvency, or evidence of the licensee’s material breach or default on its material obligations, as set forth in the associated Administration -approved security agreement; and

(3) Any additional information requested by the Administration.

.05 Application for Receivership.

A. A prospective receiver shall apply for and receive approval from the Administration in order to serve as a receiver under this chapter.

B. The applicant for receivership shall submit to the Administration a completed application, in a form developed by the Administration, accompanied by the following:

(1) Documentation establishing the applicant’s qualifications and ability to oversee the orderly disposition of the secured license in a manner that facilitates continuity of the licensee’s operations to the extent possible.

(2) A list of all owners and principal officers of the applicant and supporting documentation, including:

(a) Certificate of incorporation;

(b) Bylaws;

(c) Articles of organization;

(d) Operating agreements;

(e) Certificate of limited partnership;

(f) Resolution of a board of directors; or

(g) Other similar business formation documents;

(3) Documentation establishing that the individual or entity is eligible to do business in Maryland throughout the term of the receivership;

(4) Criminal history record information demonstrating that the applicant for receivership does not have any disqualifying criminal conviction applicable to licensees under this subtitle or COMAR 10.62;

(5) Financial records, including a record of tax payments in all jurisdictions in which an applicant has operated a business for the 3 years before the filing of the application;

(6) An affidavit confirming that the applicant does not have a financial or ownership interest in any grower, processor, or dispensary license in Maryland;

(7) A disposition of license plan, subject to Administration approval, which includes:

(a) A detailed description of the plan for the orderly disposition of the license and associated business assets in order to satisfy the security interest in the right to the proceeds from the sale of the license; and

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

(8) Any additional information requested by the Administration.

C. The application shall be accompanied by a non-refundable receivership application fee specified in COMAR 14.17.21.

D. Administration Determination of Receivership.

(1) Upon receipt of a completed receiver application and associated fee, the Administration shall either approve, deny, or request additional information from the applicant.

(2) If the applicant fails to provide any additional requested information to the Administration within 30 days of the request, the application shall be considered denied.

(3) If the Administration approves an application, the Administration shall appoint the applicant to serve as the receiver to oversee the orderly disposition of the license, including the sale and transfer of the license and associated business asset, provided the Administration has not otherwise revoked the approval.

(4) The approved receiver:

(a) Shall maintain compliance with the eligibility requirements under this chapter, as evidenced by submitting an annual report to the Administration attesting to continued compliance beginning one calendar year after the date the receiver is approved;

(b) Shall be a third party that is not affiliated with the secured creditor; and

(c) May not have a financial or ownership interest in any licensed grower, processor, or dispensary in Maryland during the period the receiver is actively carrying out its responsibilities under this chapter.

.06 Security Protocols for Receiver in a Non-Public Area of the Premises.

A. When a receiver is admitted to a non-public area of the premises of a licensee, a registered grower, processor, or dispensary agent of the licensee shall:

(1) Log the receiver in and out;

(2) Retain with the log a photocopy of the receiver’s government-issued identification;

(3) Continuously supervise the receiver while on the premises; and

(4) Ensure that the receiver does not touch any plant or cannabis product.

B. The licensee shall maintain a log of any visits by the receiver to non-public areas of the premises for 2 years.

.07 Receiver’s Responsibilities.

A. A receiver shall comply with the provisions in this subtitle, COMAR 10.62, and Alcoholic Beverages and Cannabis Article, Title 36, Annotated Code of Maryland, governing the licensed grower, processor, or dispensary that is subject to the receivership.

B. In the event of a material violation by the receiver, the Administration shall provide the secured creditor associated with the receivership with written notice of the violation and an opportunity to cure within 45 days after receipt of the written notice, unless the Administration determines that the violation is an imminent threat to public health and safety, in which case the Administration shall terminate the receivership immediately.

C. The Administration shall terminate the receivership if after providing notice and the opportunity to cure, the material violation is not cured within the 45-day period.

D. Whenever the Administration terminates a receivership under this regulation, the secured creditor may select another prospective receiver for Administration approval under Regulation .05 of this chapter.

.08 Disposition of a Secured 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 the disposition of license plan specified in Regulation .05B(7) of this chapter.

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. 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.

14.17.18 Finished Product Packaging

Authority: Alcoholic Beverages and Cannabis Article, §§36-202, 36-203, and 36-203.1, Annotated Code of Maryland

.01 Definitions.

A. In this chapter, the following terms have the meanings indicated.

B. Terms Defined.

(1) “Cartoon” means a drawing showing the features of the subject in a simplified or exaggerated way.

(2) “Child resistant” means with respect to packaging of cannabis or cannabis product ready for retail sale, designed or constructed to be significantly difficult for a typical child younger than 5 years old to open and not to be significantly difficult for a typical adult to open, and complies with 16 CFR §1700.15(B)(1).

(3) “Exit packaging” means an opaque bag, pouch or other container that cannabis, cannabis products and/or cannabis seeds and plants are placed after a retail sale and before the purchased items leave the licensed premise.

(4) “Lot” means all of a cannabis finished product that is uniform, that is intended to meet specifications, and that is manufactured, packaged, or labeled together during a specified time period according to a single lot record.

(5) “Marketing layer” means the outermost layer of a retail sale container, which is most predominantly apparent and visible. If the container consists of only a single layer, then the outer surface of the container is the marketing layer.

(6) “Tamper evident” means with respect to a device or process, bearing a seal, a label or a marking that makes unauthorized access to or tampering with a package, product, or container easily detectable.

.02 General Packaging Requirements.

A. All items shall be individually packaged by a licensed grower or processor prior to distribution to any licensed dispensary for retail sale.

B. Packaging Requirements.

(1) All packaging of any cannabis product for retail sale shall be:

(a) Tamper evident;

(b) Child resistant; and

(c) Plain and opaque.

(2) Tamper evident packaging required under this section:

(a) For soft sided packaging:

(i) Shall be sealed at the opening in a way that indicates if the container has been opened or tampered with; and

(ii) Once opened must remain clear that the package has previously been opened; or

(b) For a rigid container:

(i) Shall contain a tamper evident seal; or

(ii) The lid or enclosure shall have an adhesive band or seal that once opened must remain clear that the package has previously been opened.

(3) Any soft sided package shall be four millimeter or greater in thickness.

(4) Any package containing multiple servings shall be resealable.

.03 General Labeling Requirements.

A. All cannabis and cannabis products for retail sale shall be properly labeled in accordance with this regulation.

B. Labels required under this regulation shall:

(1) Be printed directly on, or on a label or sticker affixed directly to, the marketing layer.

(2) Use text no smaller than size 6 font or 1/12 an inch.

(3) Use text clearly written and printed in the English language.

C. Warning Statements.

(1) All products sold for retail shall include the following warning statements in a manner that complies with §B of this regulation:

(a) “The contents may only be lawfully consumed by a consumer 21 years old or older, or a registered medical cannabis patient.”

(b) “Consumption of cannabis may impair your ability to drive a car or operate machinery. Please use extreme caution.”

(c) “There may be health risks associated with cannabis use, especially if pregnant or breastfeeding.” and

(d) “This package contains cannabis. Keep out of reach of children and animals.”

(2) Any product intended for topical application shall include a statement identifying that the product is not intended for human consumption, ingestion, or inhalation.

(3) Any product for retail sale shall include the Maryland Poison Center emergency telephone number.

D. Product Information.

(1) All products sold for retail shall include the following product information in a manner that complies with §B of this regulation:

(a) Net weight of the cannabis, or cannabis product;

(b) Finished product lot number;

(c) Name of the licensee that packaged the product;

(d) Name, address, and phone number of the licensee that sold the product to report an adverse event;

(e) An itemization, including weight, of all cannabinoid and terpene ingredients specified for the product, and concentrates of any cannabinoid of less than one percent shall be printed with a leading zero before the decimal point;

(f) If applicable, a list of all major allergens contained in and used to manufacture the cannabis finished product in accordance with the Food Allergen Labeling and Consumer Protection Act of 2004, 21 U.S.C. §343 (2010), specifically milk, eggs, fish, crustacean shellfish, tree nuts, peanuts, wheat and soybeans;

(g) A list of all noncannabis ingredients;

(h) A list of any solvents used to produce the product; and

(i) Dates corresponding to the date that:

(i) The product was harvested, packaged, or produced; and

(ii) The product would be considered expired by, or best used by.

(2) Cannabinoid itemization required under §D(1)(e) of this section may be within a standard variance as identified by the Administration in the Technical Authority.

E. A certificate of analysis completed by an independent testing laboratory in accordance with COMAR 14.17.08 and the Technical Authority shall be made available on the package through a link or QR code.

F. Universal Symbol.

(1) Packages shall display the universal symbol:

(a) On the front or most predominantly displayed area of the package;

(b) In an area no smaller than ½ inch by ½ inch;

(c) In the form provided by the Administration and may not be modified, recreated, stylized, stretched, or otherwise distorted; and

(d) On a background where the symbol is clearly distinguishable and identifiable.

(2) The following symbol shall be the only symbol used on packages under this regulation:

.04 Medical Cannabis Product Packaging and Labeling.

A. Unless otherwise stated, product regulations under Regulations .02—.03 of this chapter apply to medical cannabis products. This regulation applies in addition to the regulations under this chapter.

B. In addition to the packaging and labeling requirements under Regulations .02 —.03 of this chapter, medical cannabis products shall:

(1) Maintain space for a licensed dispensary to attach a personalized label for the qualifying patient; and

(2) Bear a clear warning that it is illegal:

(a) For any person to possess or consume the contents of the package other than the qualifying patient; and

(b) To transfer the package or contents to any person other than a transfer by a caregiver to a qualifying patient.

C. High potency products that are only authorized for sale to qualifying patients under COMAR 14.17.13.03A shall maintain the requirements under §B of this regulation on the product packaging from the licensed grower or processor.

D. Products that are authorized for sale to either qualifying patients or adult use consumers may contain the warnings required under §B(2) of this regulation on a sticker or label that can be attached to the product at the point of sale.

E. All products dispensed to a qualifying patient under COMAR 14.17.12.04A shall attach a personalized label for the qualifying patient, which shall include:

(1) The name of the qualifying patient;

(2) The name of the certifying provider;

(3) The name of the licensee where the product was dispensed;

(4) The date that the medical cannabis was dispensed;

(5) The name of the product;

(6) The strength of applicable cannabinoid and terpene compounds:

(a) Displayed in units appropriate to the dosage form; and

(b) Concentrations of any cannabinoid of less than one percent shall be printed with a leading zero before the decimal point;

(7) The quantity of medical cannabis dispensed, displayed in units appropriate to the dosage form;

(8) Any directions for use of the product; and

(9) The instructions for proper storage or handling of the product.

.05 Edible Cannabis Product Packaging.

A. Unless otherwise stated, product regulations under Regulation .02—.04 of this chapter apply to edible cannabis products and tinctures. This regulation applies in addition to the regulations under this chapter.

B. All edible cannabis product packaging shall include:

(1) Milligrams per single serving of total THC, total CBD, and any other marketed cannabinoid;

(2) Milligrams per package of total THC, total CBD, and any other marketed cannabinoid;

(3) The number of servings per package and, if applicable, the recommended size of a serving;

(4) A nutritional fact panel consistent with the U.S. Food and Drug Administration Standards;

(5) A list of all active and inactive ingredients in descending order of predominance by weight in the cannabis product; and

(6) A warning label that states, “Effects of this product may be delayed by 4 or more hours.”

C. Any edible cannabis product containing multiple servings shall:

(1) Be resealable;

(2) Contain no greater than 10 milligrams of THC per serving;

(3) Contain no greater than 100 milligrams of THC per package; and

(4) Clearly indicate the size of a serving.

D. Multiple, individually packaged single serving products may be packaged together by a licensed processor using a marketing layer if the marketing layer:

(1) Contains the necessary labels, warnings, and standards under this chapter; and

(2) Does not combine products the THC content of which exceeds 100 milligrams.

.06 Packaging and Labeling Requirements of Cannabis Seeds and Plants.

A. This regulation applies only to cannabis seeds and plants for home cultivation regulated under COMAR 14.17.13.07.

B. Products sold under this regulation are exempt from Regulation .02—.05 of this chapter.

C. Cannabis Seeds.

(1) Packaging for cannabis seeds for sale to consumers shall:

(a) Keep cannabis seeds dry;

(b) Prevent germination of the seeds in the packaging; and

(c) Not impart any deleterious substances into the cannabis seeds.

D. Labeling Requirements.

(1) All cannabis seeds or plants for home cultivation shall display on the marketing layer:

(a) The name of the licensed facility where the cannabis seeds were derived or propagated;

(b) The name of the licensed dispensary where the product is being sold to an individual for home cultivation;

(c) The net weight of the product, or the number of individual seeds; and

(d) A warning label that states, “For home cultivation only. Must be 21 years old or older or a registered patient for home cultivation.”

.07 Prohibited Packaging and Labeling.

A. Any product labeled and sold in accordance with this subtitle may not bear any:

(1) Resemblance to the trademarked, characteristic or product-specialized packaging of any commercially available candy, snack, baked good or beverage;

(2) Statement, artwork or design that could reasonably mislead any person to believe that the package contains anything other than a cannabis finished product;

(3) Seal, flag, crest, coat of arms, or other insignia that could reasonably mislead any person to believe that the product has been endorsed, manufactured, or used by any State, county or municipality or any agency thereof;

(4) Cartoon, neon colors, celebrity, mascot, image, graphic or feature that is designed to or likely to appeal to minors;

(5) Images of food, candy, baked goods, cereal, fruit, beverages, or the words “candy” or “candies”;

(6) Depiction of any form of consumption of cannabis or cannabis products;

(7) Depiction of overconsumption or intoxicating effects of cannabis or cannabis products;

(8) Claims regarding health or physical benefits to the consumer; and

(9) False or misleading statements;

B. Labels, marketing layers or any other aspect of the product package are prohibited from obscuring any warnings, statements, or information required under this chapter.

C. Products are prohibited from targeting or being designed to appeal to any individuals younger than 21 years old.

.08 Exemptions.

Notwithstanding Regulations .01—.07 of this chapter, products labeled in accordance with COMAR 10.62.24 may be sold prior to January 1, 2024, if:

A. The product is unexpired; and

B. The product and the product packaging was approved prior to July 1, 2023.

14.17.19 Cannabis Research

Authority: Alcoholic Beverages and Cannabis Article, §§36-202, 36-701, and 36-702, Annotated Code of Maryland

.01 Academic Research.

A. An entity eligible to register with the Administration for the purpose of conducting a bona fide research project relating to the uses, properties, or composition of cannabis includes:

(1) An institution of higher education;

(2) A related medical facility; or

(3) An affiliated biomedical research firm.

B. Academic research institutions and entities shall operate in accordance with the Alcoholic Beverages and Cannabis Article, §36-701, Annotated Code of Maryland.

C. Registration.

(1) An entity qualified under §A of this regulation shall submit an application to the Administration that includes:

(a) The name of the primary researcher;

(b) The expected duration of the research project;

(c) The primary objectives of the research project, scope of work, and potential application(s) of the research findings;

(d) An application fee as specified in COMAR 14.17.21; and if applicable,

(e) A detailed budget.

(2) Registrations under this regulation shall be valid until:

(a) There is a change in the research project;

(b) The institution withdraws the registration; or

(c) 30 days have elapsed from the expected duration of the research project and the Administration has not been notified of any change or extension to the research project.

D. Modifications.

(1) The registered entity shall report any modifications to the scope, researcher, or any other information submitted as part of the application within 30 days to the Administration.

(2) The registered entity may continue to conduct research under this regulation while awaiting Administration approval of any modifications.

.02 Research and Development.

A. The Administration may register an entity to grow, process, test, and transfer cannabis for the purposes of research and development.

B. Research and development under §A of this regulation shall comply the purposes under the Alcoholic Beverages and Cannabis Article, §36-702, Annotated Code of Maryland.

C. Registration.

(1) An entity shall submit an application to the Administration that includes:

(a) The name of the primary researcher or entity;

(b) The address the research will be primarily taking place;

(c) The research purpose; and

(d) An application fee as specified in COMAR 14.17.21.

(2) Registrations under this regulation shall be valid for 2 years and may be renewed for additional 2 year terms in a manner determined by the Administration.

D. Research and development entities under this regulation shall otherwise comply with the Alcoholic Beverages and Cannabis Article, §36-702, Annotated Code of Maryland.

E. Modifications.

(1) The registered entity shall report any modifications to the scope, researcher, or any other information submitted as part of the application within 30 days to the Administration.

(2) The registered entity may continue to conduct research under this regulation while awaiting Administration approval of any modifications.

.03 Inspections and Controls.

A. The Administration may inspect entities registered under this chapter to ensure compliance with:

(1) The Alcoholic Beverages and Cannabis Article, Title 36, Annotated Code of Maryland;

(2) This subtitle and COMAR 10.62;

(3) This chapter;

(4) Any other violation of State, federal, or local:

(a) Law;

(b) Regulation; or

(c) Ordinances.

B. Inspections under this regulation may be announced or unannounced.

C. The Administration may issue identification cards for individuals associated with research entities registered under this chapter.

.04 Reporting Requirements.

A. The registrant shall submit to the Administration:

(1) An annual report on the progress and status of any research project; and

(2) A final report of the findings of the research project to the Administration within 30 days of the completion of the research project.

B. The final report shall include a summary of the research findings and their applications.

C. A published article or document on the research project may serve as the final report.

D. Approval is required by the Administration prior to publication of any findings.

.05 Prohibitions.

A. Entities registered under this regulation may not dispense, sell, sample, or otherwise distribute cannabis or cannabis products to individuals outside of the scope the defined research project.

B. Entities registered under this regulation may not otherwise operate in a manner that gives the appearance of the growing, processing, or dispensing of cannabis or cannabis products by a licensee.

C. Entities registered under this regulation may not perform research activities outside of Maryland.

14.17.20 Prohibited Acts

Authority: Alcoholic Beverages and Cannabis Article, §§36-202, 36-203, and 36-1101, Annotated Code of Maryland

.01 Definitions.

In this section, the term “naturally occurring biologically active chemical constituent” means a chemical compound, component, or other material found naturally in the Cannabis Sativa L. plant and recognized by the Administration.

.02 Prohibitions.

A. A licensee may not:

(1) Sell, transfer, or deliver cannabis to an individual who is visibly intoxicated;

(2) Offer cannabis or cannabis products as a prize, premium or consideration for a lottery, contest, game of chance, game of skill, or competition of any kind;

(3) Conduct direct-to-consumer internet sales of adult-use cannabis or cannabis products on or before July 1, 2025

(4) Violate any part of:

(a) The Alcoholic Beverages and Cannabis Article, Title 36, Annotated Code of Maryland;

(b) This subtitle or COMAR 10.62;

(c) This chapter;

(d) Any other violation of State, federal, or local:

(i) Law;

(ii) Regulation; or

(iii) Ordinances.

B. Persons not registered or licensed under this subtitle or COMAR 10.62 may not:

(1) Operate a business or establishment that could reasonably be interpreted to be a licensee;

(2) Sell or distribute a product intended for human consumption or inhalation that contains more than:

(a) 0.5 milligrams of THC per serving; or

(b) 2.5 milligrams of THC per package.

(3) Exemptions.

(a) Persons are exempt from §B(2) of this regulation if they sell or distribute a hemp-derived tincture that complies with the Alcoholic Beverages and Cannabis Article, §36-1102(d), Annotated Code of Maryland.

(b) Products exempted under this subsection shall be tested by an Independent Testing Lab under COMAR 14.17.08.05A.

C. Sales Restrictions.

(1) Naturally Occurring Biologically Active Chemical Constituents.

(a) A person, registered agent, or licensed business may not sell or distribute a cannabinoid that is not derived from naturally occurring biological active chemical constituents.

(b) A licensed business may submit to the State Reference Laboratory, in a manner determined by the Administration, other compounds to be considered for sale, distribution, and regulation.

(2) Businesses licensed under this subtitle or COMAR 10.62 may not:

(a) Have a license to sell alcoholic beverages under Alcoholic Beverages and Cannabis Article, Title 1 or Title 2, Annotated Code of Maryland; or

(b) Allow another business to sell alcoholic beverages within its licensed premises.

D. Samples.

(1) A licensed business may not provide samples of cannabis or cannabis product unless authorized by this section.

(2) Under this section, samples are only authorized from a licensed business to:

(a) Another licensed business;

(b) An employee, owner, or agent of another licensed business; or

(c) An employee, owner, or agent of the licensed business.

(3) Trade Samples.

(a) Trade samples shall only be provided by a licensed growers and processors and shall be:

(i) Provided solely for the purpose of business-to-business marketing;

(ii) Recorded in the Administration’s seed-to-sale system;

(iii) Packaged and labeled in accordance with COMAR 14.17.18;

(iv) Tested in accordance with COMAR 14.17.08; and

(v) Comply with product requirements under COMAR 14.17.13;

(b) Trade samples under this subsection may not be:

(i) Sold to another licensed business, patient, caregiver, or consumer;

(ii) Consumed on any licensed premises; or

(ii) A cannabis plant.

(4) Employee Samples.

(a) Employee samples shall only be provided by a licensed business to an employee of the licensed business and shall be:

(i) Provided solely for the purpose of employee education;

(ii) Recorded in the Administration’s seed-to-sale system;

(iii) Packaged and labeled in accordance with COMAR 14.17.18;

(iv) Tested in accordance with COMAR 14.17.08; and

(v) Comply with product requirements under COMAR 14.17.13;

(b) Employee samples under this subsection may not be:

(i) Sold to another licensed business, patient, caregiver, or consumer;

(ii) Consumed on any licensed premises; or

(ii) A cannabis plant.

14.17.21 Fees

Authority: Alcoholic Beverages and Cannabis Article, §§36-202, 36-205, and 36-403, Annotated Code of Maryland

.01 Scope.

The following fees are established by the Administration.

.02 Fees.

A. Application fees:

(1) For a standard license, on-site consumption license, or incubator space— $5,000;

(2) For a micro license— $1,000.

B. Licensing fees:

(1) For a standard license, on-site consumption license, or incubator space issued under COMAR 14.17.06, the licensing fees for initial licensure or renewal shall be:

(a) Grower license—$50,000

(b) Processor license—$25,000

(c) Dispensary license—$25,000

(d) Incubator space license—$10,000

(e) On-site consumption license—$10,000

(2) For a micro license issued under COMAR 14.17.07:

(a) Grower license—$10,000

(b) Processor license— $10,000

(c) Dispensary license—$10,000

(3) Licensing fees required under this section shall be valid for a 5-year period.

(4) A licensed social equity business shall have the licensing fees in §B(1) and (2) of this regulation reduced by 50 percent by the Administration for each license type held by the social equity businesses.

C. Registration fees:

(1) Cannabis agent fees:

(a) Registration fee to be paid every 2 years—$50; and

(b) Replacement identification card fee—$50.

(2) Independent testing laboratory fees:

(a) Laboratory registration fee—$5,000;

(b) Employee registration fee to be paid every 2 years—$50; and

(c) Replacement employee identification card fee—$50.

(3) Ancillary business and security guard agency fees:

(a) Annual business registration fee—$1,000;

(b) Agent registration fee to be paid every 2 years—$50; and

(c) Replacement agent identification card fee—$50.

(4) Research and development fees:

(a) Academic research institution fees:

(i) Registration fee— $500;

(ii) Renew fee for each subsequent or modified research project—$100;

(iii) Academic research representative registration fee—$50; and

(iv) Academic research representative card replacement fee—$50

(b) Research and development entity fees:

(i) Registration fee—$1,000;

(ii) Renew fee for each subsequent or modified research project—$500;

(iii) Research and development representative registration fee—$50; and

(iv) Research and development representative card replacement fee—$50

(5) Responsible vendor training program fees:

(i) Registration fee—$500; and

(ii) Renewal fee—$250.

D. Medical cannabis program fees:

(1) Qualifying patient and caregiver fees:

(a) Identification card base fee—$25; and

(b) Replacement identification card fee—$50.

E. Micro license conversion fees:

(1) A micro licensee who wishes to convert the micro license into a standard license shall pay a pro-rated amount based on:

(a) The number of whole months remaining on the initial micro license; and

(b) The fee amount difference between a standard and micro license of the license type.

(2) The conversion fee in this section shall be calculated by the Administration using:

(a) For growers:

(i) $50,000 for a full 5-year license term; or

(ii) A pro-rated amount for each remaining whole month the initial micro license is valid.

(b) For processors:

(i) $25,000 for a full 5-year license term; or

(ii) A pro-rated amount for each remaining whole month the initial micro license is valid.

(b) For dispensaries:

(i) $25,000 for a full 5-year license term; or

(ii) A pro-rated amount for each remaining whole month the initial micro license is valid.

(3) The conversion fee calculated under this section shall be paid in full within 18 months of the date the conversion is in effect.

F. Permit fees:

(1) Edible cannabis product permit fees:

(a) Application fee—$1,000; and

(b) Annual permit fee—$500.

G. Miscellaneous fees:

(1) Transfer of ownership interest in or control of a grower, processor, dispensary, on-site consumption, or incubator space license with entity transferee—$1,000;

(2) Transfer of ownership interest in a grower, processor, dispensary, on-site consumption, or incubator space license with individual transferee—$500 per person;

(3) Change in the location of a grower, processor, or dispensary premises—$500;

(4) License reinstatement fee—$2,000;

(5) Receivership application fee—$1,000; and

(6) Management agreement fee—$1,000.

H. At its discretion, the Administration may waive or reduce the fees established in this regulation.

14.17.22 Hearing Procedures

Authority: Alcoholic Beverages and Cannabis Article, §36-202, Annotated Code of Maryland

.01 Scope.

A. This chapter applies to hearings that the Administration is required to conduct by statute or regulation except for those hearings for which specific procedural regulations have been promulgated.

B. These procedures are intended to supplement the procedures required by law. They are not substantive and are not to be construed as creating rights not set out by law. In the event of conflict, statutory provisions take precedence over this chapter.

C. The right to a hearing under this regulation is granted to a licensed business, registrant, agent, owner, or selected applicant that has been subject to an action by the Administration.

.02 Definitions.

A. The following terms have the meanings indicated.

B. Terms Defined.

(1) “Hearing” means a presentation or other preceding as defined by the Administrative Procedure Act, State Government Article, §10-201 et seq., Annotated Code of Maryland.

(2) “Hearing officer” means a designee empowered by statute to render a decision as defined by the Administrative Procedure Act, State Government Article, §10-201 et seq., Annotated Code of Maryland.

(3) “Notice of agency action” means a document issued by the Administration that states the granting of a license registration, plan of correction, remedial action certification, issuance of a fine, and consent order.

(4) “Party” means any person or agency named or admitted as a party to a Hearing, including the Administration.

.03 Notice of Administration Action.

A. The Administration shall provide notice of agency action and a statement of the right to a hearing required by law. The notice shall contain the information required by State Government Article, §§10-207 and 10-208, Annotated Code of Maryland.

B. The Administration acquires jurisdiction over a matter and a case commences when a party files a request for a hearing following the issuance of an agency action.

C. The Administration may delegate authority under State Government Article, §10-205, Annotated Code of Maryland, or as otherwise directed by the Administration.

.04 Request for a Hearing.

A. A party may file a request for a hearing within 30 days of the date of the notice of agency action.

B. If a party does not submit a request for a hearing within the 30-day period, the agency action becomes final and is not subject to appeal.

C. If the party has complied with the terms stated in the notice of agency action, a request for a hearing may not be considered unless the request for a hearing was received by the Administration within 30 days of the agency action.

D. The Administration may delegate a contested case regarding Administration determination to the Office of Administrative Hearings, as permitted and consistent with State Government Article, §10-205, Annotated Code of Maryland.

E. Any hearings delegated by the Administration under §D of this regulation shall be conducted in accordance with this chapter.

.05 Postponement.

A. A hearing officer shall consider a request for postponement only if the requesting party can establish good cause for the postponement.

B. Except as provided in §D of this regulation, a request for postponement shall be made in writing and be received by the Administration no fewer than 5 business days before the scheduled hearing.

C. The hearing officer may require documentation of the reasons for the postponement request from the party.

D. Emergency Request for Postponement.

(1) For purposes of this paragraph, "emergency" means a sudden, unforeseen occurrence requiring immediate attention which arises within 5 business days of the hearing.

(2) In an emergency, a request for postponement may be made by telephone.

(3) The hearing officer may require documentation of the reasons for the emergency postponement request from a party.

.06 Prehearing Conference and Case Resolution.

A. Before a hearing, the hearing officer may:

(1) Hold a prehearing conference; and

(2) Review or request materials relevant to the proceedings.

B. If all parties agree at a prehearing conference, a hearing officer may dispose of an issue by stipulation or settlement stating whether the disposition is with or without prejudice.

C. Case Resolution.

(1) The Administration may initiate a case resolution process with parties after the request of a hearing.

(2) Any cases that are not resolved through case resolution shall proceed with a hearing in accordance with this chapter.

.07 Scheduling a Hearing.

A. After receipt of a timely request for a hearing, the Administration shall schedule a hearing as soon as reasonably practicable.

B. The hearing officer shall notify the person or party:

(1) Of the date, time, and location of hearing;

(2) Of the statutory and regulatory authority of the Administration’s action or proposed action;

(3) That the person or entity may present witnesses and documents at the hearing;

(4) That the failure to appear for the scheduled hearing shall be treated as a withdrawal of the request for the hearing; and

(5) If the hearing is by telephone, video, or other electronic means, of instructions on how to appear for the hearing.

(6) Upon request of a person or party, witness, or representative who cannot hear, speak, or understand the spoken or written English language, the Administration shall provide a qualified interpreter during the Administration proceeding in which the party, witness, or representative is participating as required by the Americans with Disabilities Act.

.08 Filing.

Unless otherwise provided by law:

A. An initial pleading is deemed to be filed on the earlier of the date that a request for hearing, along with all required fees, necessary documents, and other information, is postmarked or received by the Administration, if required to be filed with the Administration.

B. Other pleadings are deemed to be filed on the earliest of the date on which they are addressed to the Administration and postmarked.

C. Non-postmarked documents delivered or electronically transmitted to the Administration after 5 p.m. are deemed to be filed on the next day on which the Administration is open for business.

.09 Hearings.

A. Procedures.

(1) The Administration shall record all hearings and provide a copy of that recording upon request.

(2) A party may produce witnesses and documents in support of the party’s position.

B. Written Subpoenas.

(1) A party may request that the hearing officer issue subpoenas for witnesses or documents necessary for the hearing.

(2) A party shall make the request in writing, no later than 21 days before the hearing, explaining why the subpoena is necessary.

(3) The hearing officer may:

(a) Question any witnesses;

(b) Allow a party time to provide additional evidence or written arguments and may reconvene the hearing if the hearing officer considers it necessary;

(c) Consult with any employee of the Administration and with the person before making a decision in a case, in accordance with State Government Article, §10-219(A), Annotated Code of Maryland; or

(d) Decline to issue the subpoena.

C. Evidence.

(1) The hearing officer shall consider evidence of the type and in the manner prescribed by State Government Article, §10-213, Annotated Code of Maryland;

(2) Copies of documents may be admitted, although the Administration’s hearing officer may require production of originals;

(3) The Administration shall retain documentary or other evidence for at least 60 days after a final order has been issued and all appeal rights have been exhausted or waived. The evidence may then be destroyed unless the owner or person producing it makes a written request for its return.

D. Burden of Proof.

(1) The standard of proof in a hearing shall be a preponderance of evidence.

(2) In the hearing of a contested case involving allegations that the party violated a law or regulation, the presenter of evidence for the Administration shall bear the burden of proving that the party committed the violations that resulted in the Administration’s action against a licensed business.

(3) In the hearing of a contested case resulting from the denial, or proposed denial, of a license, registration, or permit, the applicant shall have the burden of establishing the applicant's entitlement to the license, registration, or permit.

E. Hearings Conducted by Electronic Means.

(1) A hearing officer may conduct all or part of a hearing by telephone, video conferencing, or other electronic means, with the consent of all parties.

(2) All substantive and procedural rights applicable to hearings described in this regulation apply to telephone, video, or other electronic hearings, subject only to the limitations of the physical arrangement.

(3) For a telephone, video, or other electronic hearing, a party shall provide documentary evidence to be offered to all parties so that each party and the hearing officer receive it at least 5 days before the scheduled hearing.

(4) For a telephone, video, or other electronic hearing, the following may be considered a failure to appear and result in the assessment or denial of the application for refund becoming final and not subject to appeal:

(a) Failure to answer the telephone for 15 minutes from the time set for the hearing;

(b) Failure to free the telephone for a hearing;

(c) Any other failure without good cause to be ready to proceed with the hearing as scheduled.

.10 Final Determination.

A. The hearing officer shall issue a written final determination on behalf of the Administration.

B. The notice of final determination shall summarize:

(1) Any adjustments to the determination of fines or penalties and the reasons for the Administration’s action;

(2) The deadline for payment of a fine or penalty; and

(3) In the case of a suspension or revocation of a license, the reason for the Administration's action;

C. The final determination exhausts all administrative remedies.

.11 Record.

The hearing officer shall create and maintain a record that includes the information set forth in State Government Article, §10-218, Annotated Code of Maryland.

.12 Appeals.

A. A party may appeal the final determination of the Administration to a Maryland circuit court if done so within 30 days of receipt of the final determination.

B. For purposes of an appeal, the venue in the Circuit Court of Anne Arundel County shall be proper as that is where the Administration resides and carries on its regular business in Anne Arundel County.

WILLIAM TILBURG
Director
Maryland Cannabis Administration

Final Action on Regulations

Symbol Key

• Roman type indicates text already existing at the time of the proposed action.

• Italic type indicates new text added at the time of proposed action.

• Single underline, italic indicates new text added at the time of final action.

• Single underline, roman indicates existing text added at the time of final action.

• [[Double brackets]] indicate text deleted at the time of final action.

Title 08
DEPARTMENT OF NATURAL RESOURCES

Subtitle 02 FISHERIES SERVICE

08.02.11 Fishing in Nontidal Waters

Authority: Natural Resources Article, §§4-219, 4-603, and 4-616, Annotated Code of Maryland

Notice of Final Action

[23-045-F]

On June 26, 2023, the Secretary of Natural Resources adopted amendments to Regulation .01 under COMAR 08.02.11 Fishing in Nontidal Waters. This action, which was proposed for adoption in 50:8 Md. R. 344—345 (April 21, 2023), has been adopted as proposed.

Effective Date: July 24, 2023.

JOSH KURTZ
Secretary of Natural Resources

Subtitle 02 FISHERIES SERVICE

08.02.11 Fishing in Nontidal Waters

Authority: Natural Resources Article, §§4-219, 4-602, 4-603, and 4-616, Annotated Code of Maryland

Notice of Final Action

[23-036-F]

On June 26, 2023, the Secretary of Natural Resources adopted new Regulation .02 and amendments to Regulation .04 under COMAR 08.02.11 Fishing in Nontidal Waters. This action, which was proposed for adoption in 50:8 Md. R. 345—346 (April 21, 2023), has been adopted as proposed.

Effective Date: July 24, 2023.

JOSH KURTZ
Secretary of Natural Resources

Subtitle 02 FISHERIES SERVICE

08.02.20 Bait

Authority: Natural Resources Article, §§4-219 and 4-602, Annotated Code of Maryland

Notice of Final Action

[23-035-F]

On June 26, 2023, the Secretary of Natural Resources adopted amendments to Regulation .01 and new Regulation .03 under COMAR 08.02.20 Bait. This action, which was proposed for adoption in 50:8 Md. R. 349—350 (April 21, 2023), has been adopted with the nonsubstantive changes shown below.

Effective Date: July 24, 2023.

Attorney General’s Certification

In accordance with State Government Article, §10-113, Annotated Code of Maryland, the Attorney General certifies that the following changes do not differ substantively from the proposed text. The nature of the changes and the basis for this conclusion are as follows:

Regulation .03B: As originally proposed, the regulation prohibited the use of all trout from being used as bait. After further review by staff and discussions with the affected stakeholders, the Department is changing the bait prohibited from all trout to only brown and brook trout instead. The affected class could have reasonably anticipated these changes based on public comment. Furthermore, the changes are less restrictive than originally proposed.

.03 Prohibited Species

A. (proposed text unchanged)

B. Prohibited Species.

(1)—(8) (proposed text unchanged)

(9) [[All species of trout; and]] Brook trout;

(10) Brown trout; and

[[10]] (11) (proposed text unchanged)

JOSH KURTZ
Secretary of Natural Resources

Title 09
MARYLAND DEPARTMENT OF LABOR

Subtitle 12 DIVISION OF LABOR AND INDUSTRY

09.12.81 Elevator, Escalator, and Chairlift Safety

Authority: Public Safety Article, §§ 12-805, 12-806, and 12-809, Annotated Code of Maryland

Notice of Final Action

[22-275-F-I]

On April 19, 2023, the Commissioner of Labor and Industry adopted amendments to Regulation .02 under COMAR 09.12.81 Elevator, Escalator, and Chairlift Safety. This action, which was proposed for adoption in 50:1 Md. R. 11 (January 13, 2023), has been adopted as proposed.

Effective Date: October 2, 2023.

DEVKI K. VIRK
Commissioner of Labor and Industry

Title 10
MARYLAND DEPARTMENT OF HEALTH

Subtitle 09 MEDICAL CARE PROGRAMS

10.09.09 Medical Laboratories

Authority: Health-General Article, §§2-104(b), 15-103, and 15-105, Annotated Code of Maryland

Notice of Final Action

[22-340-F-I]

On June 16, 2023, the Secretary of Health adopted amendments to Regulations .01 and .03—.07 under COMAR 10.09.09 Medical Laboratories. This action, which was proposed for adoption in 50:6 Md. R. 220—221 (March 24, 2023), has been adopted as proposed.

Effective Date: July 24, 2023.

LAURA HERRERA SCOTT
Secretary of Health

Subtitle 09 MEDICAL CARE PROGRAMS

Notice of Final Action

[22-255-F]

On June 16, 2023, the Secretary of Health adopted:

(1) Amendments to Regulations .01 and .02, the repeal of Regulations .03 and .05, and amendments to and the recodification of existing Regulations .04 and .06—.10 to be Regulations .03 and .04—.08 under COMAR 10.09.49 Telehealth Services; and

(2) Amendments to Regulations .01, .02, .05, and .06 under COMAR 10.09.96 Remote Patient Monitoring.

This action which was proposed for adoption in 49:24 Md. R. 1028—1031 (November 18, 2022) has been adopted with the nonsubstantive changes shown below.

Effective Date: July 24, 2023.

Attorney General’s Certification

COMAR 10.09.49.02B: In response to comments received, the Maryland Department of Health (the Department), clarifies the definition of medically necessary by replacing the existing definition for the term with reference to the definition as stated in COMAR 10.09.36.01.

COMAR 10.09.49.07B: In accordance with Ch. 382 (S.B. 534), Acts of 2023, the Preserve Telehealth Access Act of 2023, the Department updates the final date for which telehealth includes audio-only telephone conversations from June 30, 2023 to June 30, 2025.

COMAR 10.09.96.05D: In response to comments received, the Department is broadening eligibility for remote patient monitoring services by removing the requirement that the participant be at high risk for avoidable hospital utilization.

10.09.49 Telehealth Services

Authority: Health-General Article, §§2-104(b), 15-103, 15-105, and
15-105.2(b), Annotated Code of Maryland; Ch. 280, Acts of 2013; Ch. 366, Acts of 2016; Ch. 367, Acts of 2016

.02 Definitions.

A. (proposed text unchanged)

B. Terms Defined.

(1)—(5) (proposed text unchanged)

(6) “Medically necessary” [[means that the service or benefit is:

(a) Directly related to diagnostic, preventive, curative, palliative, rehabilitative, or ameliorative treatment of an illness, injury, disability, or health condition;

(b) Consistent with currently accepted standards of good medical practice;

(d) Not primarily for the convenience of the participant, family, or provider]] has the meaning stated in COMAR 10.09.36.01.

(7)—(13) (proposed text unchanged)

.07 Limitations.

A. (proposed text unchanged)

B. A service delivered via telehealth does not include:

(1) An audio-only telephone conversation between a health care provider and a patient unless provided on dates of service between July 1, 2021, and June 30, [[2023]] 2025, inclusive;

(2)—(4) (proposed text unchanged)

C.—F. (proposed text unchanged)

10.09.96 Remote Patient Monitoring

Authority: Health-General Article, §15-103(b), Annotated Code of Maryland

.05 Participant Eligibility for Services.

A participant is eligible to receive remote patient monitoring services if:

A.—C. (proposed text unchanged)

D. The participant is at [[high]] risk for avoidable hospital utilization due to a poorly controlled chronic disease capable of being monitored via remote patient monitoring; and

E. (proposed text unchanged)

LAURA HERRERA SCOTT
Secretary of Health

Subtitle 15 FOOD

10.15.07 Shellfish Sanitation

Authority: Health-General Article, §§18-102, 21-211, 21-234, 21-304, and
21-346—21-350, Annotated Code of Maryland

Notice of Final Action

[22-302-F-I]

On May 19, 2023, the Secretary of Health adopted amendments to Regulation .01 under COMAR 10.15.07 Shellfish Sanitation. This action, which was proposed for adoption in 49:27 Md. R. 1116 (December 30, 2022), has been adopted as proposed.

Effective Date: July 24, 2023.

LAURA HERRERA SCOTT
Secretary of Health

Title 13A
STATE BOARD OF EDUCATION

Subtitle 01 STATE SCHOOL ADMINISTRATION

13A.01.08 Public Information Act Requests

Authority: General Provisions Article, §§4-101—4-601, Annotated Code of Maryland

Notice of Final Action

[23-015-F]

On June 27, 2023, the Maryland State Board of Education adopted new Regulations .01—.16 under a new chapter, COMAR 13A.01.08 Public Information Act Requests. This action, which was proposed for adoption in 50:7 Md. R. 313—315 (April 7, 2023), has been adopted as proposed.

Effective Date: July 24, 2023.

MOHAMMED CHOUDHURY
State Superintendent of Schools

Subtitle 01 STATE SCHOOL ADMINISTRATION

13A.01.09 Correction or Amendment of Public Records

Authority: General Provisions Article, §4-502, Annotated Code of Maryland

Notice of Final Action

[23-017-F]

On June 27, 2023, the Maryland State Board of Education adopted new Regulations .01—.11 under a new chapter, COMAR 13A.01.09 Correction or Amendment of Public Records. This action, which was proposed for adoption in 50:7 Md. R. 315—316 (April 7, 2023), has been adopted as proposed.

Effective Date: July 24, 2023.

MOHAMMED CHOUDHURY
State Superintendent of Schools

Subtitle 06 SUPPORTING PROGRAMS

13A.06.07 Student Transportation

Authority: Education Article, §§2-205, 5-218, and 8-410, Annotated Code of Maryland

Notice of Final Action

[23-025-F]

On June 27, 2023, the Maryland State Board of Education adopted amendments to Regulations .06—.08, .11, .12, .18, and .19 under COMAR 13A.06.07 Student Transportation. This action, which was proposed for adoption in 50:8 Md. R. 351—352 (April 21, 2023), has been adopted as proposed.

Effective Date: July 24, 2023.

MOHAMMED CHOUDHURY
State Superintendent of Schools

Subtitle 08 STUDENTS

13A.08.01 General Regulations

Authority: Education Article, §§2-205, 7-101, 7-101.1, 7-301, 7-301.1,
7-303—7-305, 7-305.1, 7-307, 7-308, and 8-404, Annotated Code of Maryland; Ch. 273, Acts of 2016; Federal Statutory Reference: 20 U.S.C. §§1232g and 7912

Notice of Final Action

[23-012-F]

On June 27, 2023, the Maryland State Board of Education adopted amendments to Regulation .03 under COMAR 13A.08.01 General Regulations. This action, which was proposed for adoption in 50:7 Md. R. 317 (April 7, 2023), has been adopted as proposed.

Effective Date: July 24, 2023.

MOHAMMED CHOUDHURY
State Superintendent of Schools

Title 30
MARYLAND INSTITUTE FOR EMERGENCY MEDICAL SERVICES SYSTEMS (MIEMSS)

Subtitle 08 DESIGNATION OF TRAUMA AND SPECIALTY REFERRAL CENTERS

30.08.08 Pediatric Trauma Center Standards

Authority: Education Article, §13-509, Annotated Code of Maryland

Notice of Final Action

[22-306-F]

On June 13, 2023, the Maryland State Emergency Medical Services Board adopted the repeal of existing Regulations .01—.20 and new Regulations .01—.22 under COMAR 30.08.08 Pediatric Trauma Center Standards. This action, which was proposed for adoption in 50:5 Md. R. 184—190 (March 10, 2023), has been adopted as proposed.

Effective Date: July 24, 2023.

THEODORE R. DELBRIDGE, M.D.
Executive Director

Withdrawal of Regulations

Title 14
INDEPENDENT AGENCIES

Subtitle 04 MARYLAND TECHNOLOGY DEVELOPMENT CORPORATION

14.04.09 Comprehensive Technical Assistance Program

Authority: Economic Development Article, §10-416(d), Annotated Code of Maryland

Notice of Withdrawal

[22-082-W]

Pursuant to State Government Article, §10-116(b), Annotated Code of Maryland, notice is given that the proposal to adopt new Regulations .01—.04 under a new chapter, COMAR 14.04.09 Comprehensive Technical Assistance Program, which was published in 49:9 Md. R. 536—537 (April 22, 2022), has been withdrawn by operation of law.

GAIL S. KLAKRING
Administrator
Division of State Documents

Proposed Action on Regulations

Title 08
DEPARTMENT OF NATURAL RESOURCES

Subtitle 18 BOATING—SPEED LIMITS AND OPERATION OF VESSELS

08.18.07 Chesapeake Bay

Authority: Natural Resources Article, §§8-703 and 8-704, Annotated Code of Maryland

Notice of Proposed Action

[23-123-P]

The Secretary of Natural Resources proposes to amend Regulation .02 under COMAR 08.18.07 Chesapeake Bay.

Statement of Purpose

The purpose of this action is to establish a 6-knot speed limit for the area surrounding the construction site of the Maryland Transportation Authority’s Eastbound Bay Bridge Deck Replacement Project on the Western Shore of the Chesapeake Bay. This re-decking project will include replacement of the deck floor system, barrier upgrades, major structural rehabilitation of the truss superstructure, lane use signal gantry replacements and utility relocations, as well as off-site stormwater management work. The deck replacement is scheduled to be completed by winter 2025/2026. The proposed action establishes a speed limit for an area of the Western Shore of the Chesapeake Bay around the construction site. This regulation will be effective through March 31, 2026.

The proposed action is required to ensure public safety and protect human life. Without an established speed limit, the construction zone poses safety threats for all waterway users, employees, and contractors. The proposed speed limit will help protect all workers and barges from excessive wake actions. This action will positively support the project and prevent delays. Additionally, this action has been developed in cooperation with the Maryland Transportation Authority and the U.S. Coast Guard.

Estimate of Economic Impact

The proposed action has no economic impact.

Economic Impact on Small Businesses

The proposed action has minimal or no economic impact on small businesses.

Impact on Individuals with Disabilities

The proposed action has no impact on individuals with disabilities.

Opportunity for Public Comment

Comments may be sent to Chesapeake Bay — Western Shore Bay Bridge Speed Zone Regulations, Regulatory Staff, Fishing and Boating Services, Department of Natural Resources, 580 Taylor Avenue, E-4, Annapolis, MD 21401, or call 410-260-8300, or email to boatingregspubliccomment.dnr@maryland.gov. Comments will be accepted through August 14, 2023. A public hearing has not been scheduled.

.02 Western Shore.

A.—N. (text unchanged)

O. Western Shore Bay Bridge Construction Area.

(1) Area. All of the waters enclosed by a line beginning at or near Lat. 39° 0.276' N., Long. 76° 24.347' W., then running 62° 0' to a point at or near Lat. 39° 0.444' N., Long. 76° 23.943' W., then running 145°0’ to a point at or near Lat. 39° 0.015' N., Long. 76° 23.554' W., then running 107°0’ to a point at or near Lat. 38° 59.874' N., Long. 76° 22.995' W., then running 198°0’ to a point at or near Lat. 38° 59.465' N., Long. 76° 23.161' W., then running 292° 0' to a point at or near Lat. 38° 59.693' N., Long. 76° 23.878' W., then running 328° 0' to the point of beginning.

(2) The area described in §O(1) of this regulation has a 6-knot speed limit at all times.

(3) This regulation shall be effective through March 31, 2026.

JOSH KURTZ
Secretary of Natural Resources

Title 10
MARYLAND DEPARTMENT OF HEALTH

Subtitle 24 MARYLAND HEALTH CARE COMMISSION

10.24.01 Procedural Regulations for Health Care Facilities and Services

Authority: Health-General Article, §§19-109(a)(1), 19-118(d), 19-120, 19-120.1, and 19-126, et seq., Annotated Code of Maryland

Notice of Proposed Action

[23-108-P]

The Maryland Health Care Commission proposes to repeal existing Regulations .01─.22 under COMAR 10.24.01 Certificate of Need for Health Care Facilities and adopt new Regulations .01─.22 under COMAR 10.24.01 Procedural Regulations for Health Care Facilities and Services. This action was considered at an open meeting held on April 20, 2023, a notice of which was given in accordance with General Provisions Article, §3-302(c), Annotated Code of Maryland.

Statement of Purpose

The purpose of this action is to adopt procedural regulations governing the Commission’s certificate of need (CON) and other health planning programs. The proposed regulations are necessary to respond to significant statutory changes that have occurred since these regulations were last updated in 2005 and to streamline and modernize the manner in which health care capital projects are reviewed by the Commission, given changes in the health care delivery system and health care policy. The proposed regulations incorporate statutory changes to the Commission’s authority over cardiac services, conversions of acute care hospitals to freestanding medical facilities, ambulatory surgery facilities, and comprehensive care facilities. In addition, the proposed regulations align the Commission’s procedures for reviewing different types of health care projects, establish and revise deadlines, establish new criteria for reviewing CON applications based in health equity, and provide the Commission with additional flexibility in monitoring approved projects through implementation and addressing public health emergencies.

Estimate of Economic Impact

The proposed action has no economic impact.

Economic Impact on Small Businesses

The proposed action has minimal or no economic impact on small businesses.

Impact on Individuals with Disabilities

The proposed action has no impact on individuals with disabilities.

Opportunity for Public Comment

Comments may be sent to Caitlin E. Tepe, Assistant Attorney General, Maryland Health Care Commission, 4160 Patterson Avenue, Baltimore, MD 21215, or call 410-764-3284, or email to caitlin.tepe@maryland.gov. Comments will be accepted through August 14, 2023. A public hearing has not been scheduled.

Open Meeting

Final action on the proposal will be considered by the Maryland Health Care Commission during a public meeting to be held on September 21, 2023, at 1 p.m., at 4160 Patterson Avenue, Baltimore, MD 21215.

.01 Definitions.

A. In this chapter, the following terms have the meanings indicated.

B. Terms Defined.

(1) “Acquisition” means:

(a) Any transfer of stock or assets that results in a change of the person or persons who control a health care facility; or

(b) The transfer of any stock or ownership interest in excess of 25 percent.

(2) “Adversely affected”, for purposes of determining interested party status in a Certificate of Need review, as defined in §B(35) of this regulation, means that a person:

(a) Is authorized to provide the same service as the applicant, in the same planning region, or contiguous planning region if the proposed new facility or service could reasonably provide services to residents in the contiguous area, and can demonstrate that the approval of the application:

(i) Would materially affect the quality of care at a health care facility that the person operates, such as by causing a reduction in the volume of services when volume is linked to maintaining quality of care; or

(ii) Would result in a substantial depletion of essential personnel or other resources at a health care facility that the person operates; or

(b) Can demonstrate to the reviewer that a health care facility operated by the person could suffer a potentially detrimental impact from the approval of a project before the Commission, in an issue area over which the Commission has jurisdiction, such that the reviewer, in the reviewer's sole discretion, determines that the person should be qualified as an interested party in the review.

(3) “Aggrieved party” means:

(a) An applicant or interested party who has submitted written exceptions to a proposed decision to the Commission and would be adversely affected by the final decision of the Commission; or

(b) The Secretary.

(4) Ambulatory Surgery Center.

(a) “Ambulatory surgery center” or “ASC” means any center, service, office, facility, or office of one or more health care practitioners, a group practice, or a non-rate-regulated center owned by a hospital that:

(i) Has no more than two operating rooms;

(ii) Operates primarily for the purpose of providing surgical services to patients who do not require overnight hospitalization; and

(iii) Seeks reimbursement from payors for the provision of ambulatory surgical services.

(b) “Ambulatory surgery center” or “ASC” includes the following subcategories:

(i) An ASC-P, which has only procedure rooms;

(ii) An ASC-1, which has one operating room; and

(iii) An ASC-2, which has two operating rooms.

(5) “Ambulatory surgical facility” means any center, service, office, facility, or office of one or more health care practitioners or a group practice that:

(a) Has three or more operating rooms;

(b) Operates primarily for the purpose of providing surgical services to patients who do not require overnight hospitalization; and

(c) Seeks reimbursement from a third-party payor as an ambulatory surgical facility.

(6) “Approved bed” means a bed approved by the Commission in a Certificate of Need, but not yet licensed.

(7) “Bed capacity” or “physical bed capacity” means the total number of beds that a health care facility can set up and staff in space designed for and licensable for use by patients requiring an overnight stay at the facility.

(8) “By or on behalf of” includes a capital expenditure that affects the physical plant, service volume, or service capacity of a health care facility or health maintenance organization regardless of the source of the funds.

(9) “Capital expenditure” means:

(a) An expenditure, including predevelopment costs, which:

(i) Is made as part of an acquisition, improvement, expansion, or physical plant replacement;

(ii) Results in a change or relocation that would require a CON under Regulation .02A(2)—(4) of this chapter; and

(iii) Is made by or on behalf of a health care facility that under generally accepted accounting principles is not properly chargeable as an expense of operation and maintenance or is made to obtain any physical plant for a facility by lease or comparable arrangement;

(b) A donation of a physical plant to a health care facility, if a Certificate of Need would be required for an expenditure by the health care facility to acquire the physical plant directly; or

(c) A transfer of a physical plant to a facility for less than fair market value, if the transfer of the physical plant at fair market value would be a capital expenditure.

(10) “Center for Health Care Facilities Planning and Development” means that center in the Commission that acts as the entry and information point for applications for Certificate of Need, requests for an exemption from Certificate of Need review, or other health care facility-related matters requiring action by the Commission, or its staff, as provided in this chapter.

(11) “Certificate of Conformance” means an approval issued by the Commission under Health-General Article, §19-120.1, Annotated Code of Maryland, that allows an acute general hospital to establish emergency percutaneous coronary intervention (PCI) services or elective PCI services without a Certificate of Need.

(12) “Certificate of Need” or “CON” means a certification of public need issued by the Commission under Health-General Article, Title 19, Subtitle 1, Annotated Code of Maryland.

(13) “Certificate of Ongoing Performance” means an approval issued by the Commission that the cardiac surgery services, emergency PCI services, or elective PCI services provided by an acute general hospital meet standards evidencing continued quality under Health-General Article, §19-120.1, Annotated Code of Maryland.

(14) “Commission” means the Maryland Health Care Commission.

(15) “Comparable” when used to determine whether two or more CON applications are subject to comparative review means that the proposed projects are in the same health planning region and involve the addition or expansion of at least one of the same medical services.

(16) “Comparative review” means a review in which two or more comparable CON applications are reviewed together and ranked based on each application’s satisfaction of the CON review criteria because the most recently published need projections do not support the implementation of all comparable projects.

(17) “CON-approved service” means any health care service for which a CON was obtained, including:

(a) Medical services;

(b) Cardiac surgery services;

(c) Organ transplant services;

(d) Burn treatment services; and

(e) Neonatal intensive care services.

(18) “Consolidation” means the reconfiguration of two or more health care facilities within a merged asset system such that:

(a) The health care facilities in the merged asset system are combined and the total number of health care facilities of the merged asset system is reduced; or

(b) The medical services or bed capacity are reallocated among two or more health care facilities of the merged asset system.

(19) “Contested review” means a review in which a person has been recognized as an interested party.

(20) “Department” means the Maryland Department of Health.

(21) “Determination of coverage” means the written determination in accordance with Regulation .14A of this chapter whether CON or other Commission review is required for a project.

(22) “Executive Director” means the person appointed chief administrative officer of the Commission in accordance with Health-General Article, §19-106, Annotated Code of Maryland.

(23) “Existing health care facility” means a health care facility that is licensed by the Department.

(24) “Freestanding medical facility” has the meaning stated in Health-General Article, §19-3A-01, Annotated Code of Maryland.

(25) “General hospice care program” has the meaning stated in Health-General Article, §l9-901, Annotated Code of Maryland.

(26) Health Care Facility.

(a) “Health care facility” means:

(i) A hospital, as defined in Health-General Article, §19-301, Annotated Code of Maryland;

(ii) A limited service hospital, as defined in Health-General Article, §19-301, Annotated Code of Maryland;

(iii) A related institution, as defined in Health-General Article, §19-301, Annotated Code of Maryland;

(iv) An ambulatory surgical facility;

(v) An inpatient facility that is organized primarily to help in the rehabilitation of disabled individuals, through an integrated program of medical and other services provided under competent professional supervision;

(vi) A home health agency, as defined in Health-General Article, §19-401, Annotated Code of Maryland;

(vii) A hospice, as defined in Health-General Article, §19-901, Annotated Code of Maryland;

(viii) A freestanding medical facility, as defined in Health-General Article, §19-3A-01, Annotated Code of Maryland;

(ix) A comprehensive care facility, except as provided by Regulation .03 of this chapter and Health-General Article, §19-114(d)(2), Annotated Code of Maryland; and

(x) Other health institutions, services, or programs that may be specified as requiring a CON under State law.

(b) “Health care facility” does not mean:

(i) A hospital or related institution operated, or listed and certified, by the First Church of Christ Scientist, Boston, Massachusetts;

(ii) A kidney disease treatment facility, or the kidney disease treatment stations and services provided by or on behalf of a hospital, if the facility or the services do not include kidney transplant services or programs; or

(iii) The office of one or more individuals licensed to practice dentistry under Health Occupations Article, Title 4, Annotated Code of Maryland, for the purposes of practicing dentistry.

(27) “Health care project” means a health care project requiring a Certificate of Need as set forth in Regulation .02 of this chapter.

(28) “Health care services” means clinically-related patient services, including medical services.

(29) “Health maintenance organization” or “HMO” means a health maintenance organization under Health-General Article, §19-701, Annotated Code of Maryland.

(30) “Health planning region” means the area used for regulation of a particular service as provided in the State Health Plan.

(31) “Holder” means the applicant or applicants to whom the Commission awarded a Certificate of Need, an exemption from Certificate of Need, or other Commission approval for a project that has not received first use approval or, if necessary, a license from the Department for that project.

(32) Home Health Agency.

(a) “Home health agency” has the meaning stated in Health-General Article, §19-401(b), Annotated Code of Maryland.

(b) “Home health agency” includes a parent home health agency, as defined by the Centers for Medicare and Medicaid Services under 42 CFR §484.2.

(33) “Hospital capital threshold” has the meaning stated in Health-General Article, §19-120(a)(4), Annotated Code of Maryland.

(34) “Initiation of construction” means:

(a) For a new health care facility or expansion of an existing health care facility, that an approved project has:

(i) Obtained all permits and approvals considered necessary by applicable federal, State, and local authorities to initiate construction;

(ii) Completed all necessary preconstruction site work; and

(iii) Started the installation of the foundation system with placement of permanent components such as reinforcing steel, concrete, and piles; and

(b) For the renovation of an existing health care facility, that an approved project has:

(i) Obtained all permits and approvals considered necessary by applicable federal, State, and local authorities to initiate renovation; and

(ii) Started the demolition or relocation of affected services necessary to undertake the renovation project.

(35) “Interested party” means a person recognized by a reviewer as an interested party, including:

(a) Any applicant who has submitted a competing application in a comparative review;

(b) The staff of the Commission;

(c) A local health department in the jurisdiction or, in the case of regional services, in the planning region, in which the proposed facility or service is to be offered;

(d) In the review of a replacement acute general hospital project proposed by or on behalf of a regional health system that serves multiple contiguous jurisdictions, a jurisdiction within the region served by the regional health system that does not contain the proposed replacement acute general hospital project; and

(e) A person who has demonstrated to the reviewer that it meets the definition of adversely affected by the approval of a proposed project.

(36) “Intermediate care” means:

(a) A planned regimen of 24-hour professional directed evaluation, observation, medical monitoring, and addiction treatment in an inpatient setting for individuals with substance abuse disorder, including American Society of Addiction Medicine (ASAM) Level 3.7 medically monitored intensive inpatient services; and

(b) Residential care, treatment, or custody of individuals with intellectual disability or persons with related conditions.

(37) “Jurisdiction” means the 23 counties of Maryland and Baltimore City.

(38) Licensed Bed Capacity.

(a) “Licensed bed capacity” means the number of health care facility beds in any of the medical service categories or subcategories, as they appear in the Commission's inventories of licensed service capacity.

(b) “Licensed bed capacity” for acute general hospitals:

(i) Means the capacity authorized by the Secretary under Health-General Article, §19-307.2, Annotated Code of Maryland;

(ii) Does not mean the number of holding beds to support hospital emergency services, bassinets, beds dedicated to observation of patients, an outpatient service, or recovery beds to support ambulatory surgical services.

(39) “Limited service hospital” means a health care facility that:

(a) Is licensed as a hospital;

(b) Changes the type or scope of health care services offered by eliminating the facility's capability to admit or retain patients for overnight hospitalization;

(c) Retains an emergency or urgent care center; and

(d) Complies with the regulations adopted by the Secretary under Health-General Article, §19-307.1, Annotated Code of Maryland.

(40) “Local health department” means the health department in a jurisdiction or a body designated by that jurisdiction to perform health planning functions.

(41) “Long-term significant relationship” means a relationship characterized by mutual economic dependence, demonstrated by evidence such as a joint lease or mortgage or power of attorney, and evidence of common legal residence shown by driver's licenses, voter registration, or other identification.

(42) “Maryland Health Care Commission” means the agency established by Health-General Article, Title 19, Subtitle 1, Annotated Code of Maryland.

(43) “Medical service” means:

(a) Any of the following categories of health care services as they appear in the Commission's inventories of service capacity:

(i) Medical/surgical/gynecological/addictions;

(ii) Obstetrics;

(iii) Pediatrics;

(iv) Psychiatry;

(v) Rehabilitation;

(vi) Chronic care;

(vii) Comprehensive care;

(viii) Extended care;

(ix) Intermediate care; or

(x) Residential treatment center care; or

(b) A subcategory of the rehabilitation, psychiatry, comprehensive care, or intermediate care categories of medical services for which the State Health Plan provides a need projection methodology or specific standards.

(44) “Merged asset system” means an entity comprised of one or more regulated health care facilities under common ownership or control.

(45) “Merger” means the union of two or more health care facilities by the transfer of all the property of one or more of them to one of them, which continues in existence, the others being merged therein.

(46) “Multiphased plan of construction” means a plan of construction for an addition, replacement, modernization, relocation, or conversion of an existing health care facility that involves distinct elements of construction, demolition, or renovation that require sequential implementation such that one element can be initiated before subsequent elements of the overall project can be initiated.

(47) “Operating room” means a sterile room in a surgical suite that meets the requirements of a restricted area and is designated and equipped for performing surgical operations or other invasive procedures that require an aseptic field.

(48) “Other Commission approval” means approval of a Certificate of Conformance, Certificate of Ongoing Performance, or an exemption from CON review.

(49) “Partial closing” or “partial closure” means the closure or decommission of one or more but not all CON-approved services offered by a health care facility.

(50) “Participating entity” means a person recognized by the Executive Director as a participating entity and may include:

(a) A third-party payor including:

(i) An insurer or nonprofit health service plan that holds a certificate of authority and provides health insurance policies or contracts in Maryland;

(ii) A health maintenance organization that holds a certificate of authority in Maryland;

(iii) A union that is providing a health plan to union members on behalf of an employer in a jurisdiction in which the proposed project will be located or from which an existing health care facility seeks to relocate;

(iv) A pharmacy benefit manager; and

(v) A self-insured employer offering health benefits through the Employer Retirement Insurance Security Act of 1974;

(b) A municipality where the proposed project will be located or from which an existing health care facility seeks to relocate; or

(c) In the case of a hospital project, a local health department in a jurisdiction that borders a jurisdiction in which a proposed facility or service will be located.

(51) “Person” includes an individual, receiver, trustee, guardian, executor, administrator, fiduciary, or representative of any kind and any partnership, firm, association, limited liability company, limited liability partnership, public or private corporation, or other entity.

(52) Personal Physician.

(a) “Personal physician” means a physician licensed to practice medicine who:

(i) Was chosen by an individual;

(ii) Has an established physician-patient relationship with the individual; and

(iii) Has provided health care services to the individual.

(b) “Personal physician” does not mean an owner of, an employee of, a person under contract with, or a person who has a material financial interest in a continuing care retirement community, its management company, or related entity.

(53) Predevelopment Costs.

(a) “Predevelopment costs” means all costs related to the preliminary development of a project, which include, but are not limited to, the costs of preliminary plans, studies, surveys, architectural designs, plans, reports, application fees, legal fees, financing fees, consulting fees, working drawings, or specifications undertaken in preparation for the development or offering of a health care project.

(b) “Predevelopment costs” does not include activities routinely undertaken by a health care facility as a part of its internal management or long-range planning process.

(54) “Primary service area” means:

(a) The Maryland postal ZIP code areas from which the first 60 percent of a hospital's patient discharges originate during the most recent 12-month period, where:

(i) The discharges from each ZIP code area are ordered from largest to smallest number of discharges; and

(ii) Two or more ZIP code areas having the same numbers of discharges are ordered from the largest to smallest based on the percentage of the hospital’s discharges originating from the ZIP code area in the most recent 12-month period;

(b) Point ZIP codes physically within any of the ZIP code areas designated in §B(54) of this regulation;

(c) Maryland ZIP code areas physically contiguous to any of the ZIP codes designated in §B(54) of this regulation that provided 50 percent or more of their discharges to the hospital in the most recent 12-month period; and

(d) For a merged asset system, the ZIP code areas that are tabulated separately for each hospital, and all ZIP code areas identified for each hospital which are included in the primary service area of the merged asset system.

(55) Public Obligation.

(a) “Public obligation” means a bond, note, evidence of indebtedness, or other obligation to repay borrowed money issued by:

(i) The Maryland Health and Higher Educational Facilities Authority;

(ii) The State, or any agency, instrumentality, or public corporation of the State;

(iii) A governmental entity described in Local Government Article, §19-205(a), Annotated Code of Maryland;

(iv) The Mayor and City Council of Baltimore; or

(v) A municipal corporation.

(b) “Public obligation” does not include an obligation, or portion of an obligation, if:

(i) The principal of and interest on the obligation or the portion of the obligation is insured by an effective municipal bond insurance policy and issued on behalf of a hospital that voluntarily closed in accordance with Health-General Article, §19-120(l); and

(ii) The proceeds of the obligation or the portion of the obligation are used to finance wholly or partly a facility or part of a facility that is used primarily to provide outpatient services at a location other than the hospital or that is used primarily by physicians who are not employees of the hospital to provide services to nonhospital patients.

(56) “Regional health system” means a hospital whose primary or secondary service area cover multiple jurisdictions.

(57) “Rehabilitation facility” means an inpatient facility that:

(a) Is organized for the primary purpose of assisting in the rehabilitation of persons with disabilities through an integrated program of medical and other services, which are provided under competent professional supervision;

(b) Is licensed as a special rehabilitation hospital; and

(c) Complies with the regulations adopted by the Secretary under Health-General Article, Title 19, Subtitle 3, Annotated Code of Maryland.

(58) “Religious order” means an incorporated, not-for-profit organization:

(a) That is owned or is wholly operated by an entity founded and operating for the sole purpose of carrying out religious precepts; and

(b) Whose members have taken the vows required by the order and have devoted their lives to religious service, to the exclusion of lay life and activities.

(59) “Residential treatment center” has the meaning stated in Health-General Article, §19-301(p), Annotated Code of Maryland.

(60) “Reviewer” means one Commissioner, appointed by the Executive Director of the Commission, who:

(a) Evaluates a Certificate of Need application;

(b) Prepares a proposed decision for the consideration of the full Commission; and

(c) Serves as presiding officer at an evidentiary hearing on an application or applications.

(61) “Secretary” means the Secretary of Health.

(62) “Service area” means the geographic area from which a health care facility or provider draws its patients. Unless otherwise specified in a relevant State Health Plan chapter, service area means the zip code areas from which the greatest number of patients reside, which, when ordered from largest to smallest, comprise the top 85 percent of patients who receive a specific service at a health care facility for the most recent 12-month period of data available.

(63) “State Health Plan” means the State Health Plan for Facilities and Services and its modifications or additions, adopted by the Commission pursuant to Health-General Article, §19-118, Annotated Code of Maryland.

.02 Coverage.

A. Except as provided in Regulations .03—.05 of this chapter or as otherwise provided by law, a CON is required before:

(1) A new health care facility is built, developed, or established;

(2) An existing health care facility is moved to another site, unless the relocation is:

(a) The result of a partial or complete replacement of an existing hospital or related institution, as defined in Health-General Article, §19-301, Annotated Code of Maryland, and is to another part of the site or immediately adjacent to the site of the existing hospital or related institution;

(b) Of an existing health care facility owned or controlled by a merged asset system, subject to the provisions of Regulations .03E or .04A(2) of this chapter, whichever is applicable; or

(c) By a hospital converting to a limited service hospital, subject to the provisions of Regulation .04A(4) of this chapter, and is to a site within the immediate area, as determined by the Commission, as described in §B of this regulation;

(3) The bed capacity of a health care facility is changed;

(4) The type or scope of any health care service offered by a health care facility is changed, and the change:

(a) Establishes a new medical service;

(b) Establishes a new cardiac surgery, organ transplant surgery, burn treatment, or neonatal intensive care program;

(c) Establishes a new home health agency, general hospice care program, or ambulatory surgical facility;

(d) Builds or expands surgical capacity in a hospital, freestanding medical facility subject to rate regulation by the Health Services Cost Review Commission, or ambulatory surgical facility;

(e) Results in:

(i) The establishment of a new parent home health agency; or

(ii) The expansion of an existing home health agency into a jurisdiction in which it was not previously authorized by the Commission to operate;

(f) Eliminates an existing medical service; or

(g) Closes an existing health care facility or converts it to a non-health-related use; or

(5) A hospital makes a capital expenditure, as defined in Health-General Article, §19-120(k), Annotated Code of Maryland, and in this chapter, that exceeds the hospital capital threshold, including a capital expenditure:

(a) For the relocation of an existing health care facility owned or controlled by a merged asset system, except as provided in Regulation .03E of this chapter; and

(b) By a relocated health care facility to permit the facility to offer a new health care service for which CON is otherwise required.

B. Definition of Immediate Area for Limited Service Hospital Conversion.

(1) For the purpose of §A(2)(c) of this regulation, “immediate area” means a location on the site of the existing hospital, or on an adjacent site.

(2) A hospital may provide evidence as to why the Commission should approve a site for a limited service hospital beyond the immediate area of the converting hospital.

(3) The Commission may not approve a site for a limited service hospital unless the site is within:

(a) A 5-mile radius of the site of the hospital proposing the conversion; and

(b) Its primary service area.

C. A person may not divide a project into component parts except as permitted by this chapter. Commission staff shall issue a determination regarding whether two or more apparently individual projects actually represent component parts of a single project, considering, among other things, the timing of the projects, the functional areas of a facility to be affected, the number of construction contracts entered into, and whether expenditures under one contract depend upon the completion of a prior contract.

D. Proposed Change After Acquisition. If a person acquires an existing health care facility or service without a CON, in accordance with Regulation .03 of this chapter, and proposes to change the health care services it provides or its bed capacity, the proposed change requires review and approval in accordance with §A of this regulation.

E. A health maintenance organization, or health care facility that either controls, directly or indirectly, or is controlled by an HMO or a group of HMOs, shall obtain a CON before it builds, develops, operates, or participates in building, developing, or operating:

(1) A hospital; or

(2) Any other health care project for which a CON is required under §A of this regulation, unless at least 90 percent of the patients who will receive health care services from the project will be individuals enrolled in that health maintenance organization.

.03 Non-Coverage by Certificate of Need or Other Commission Approval.

A. Acquisition of an Existing Health Care Facility.

(1) At least 30 days before closing on a contract to acquire a health care facility, the person acquiring the facility shall notify the Commission in writing, with a copy to the local health officer in each affected jurisdiction and the appropriate State licensing agency, of the intent to acquire the facility, and include the following information:

(a) The health care services provided by the facility;

(b) The bed capacity, or jurisdiction served, if a community-based service;

(c) Complete organizational charts that describe the ownership of the health care facility prior to and after the proposed acquisition; and

(d) Any other information required by this chapter, by the State Health Plan chapter applicable to the health care facility, or requested by Commission staff.

(2) Deemed Approval.

(a) Except for acquisitions of a comprehensive care facility established under §I of this regulation, CON review is not required if Commission staff does not issue either a determination of coverage or notice that timely or complete notice was not received within 60 days of receipt of a notice from the person acquiring the health care facility.

(b) Upon request, Commission staff shall provide written confirmation that an acquisition was deemed approved under this regulation.

(3) Commission staff’s determination that CON or other Commission review is not required remains valid for 180 days from its issuance. A new determination of coverage shall be required if the acquisition is not completed within that time period.

(4) If the acquisition is completed, the buyer shall sign a notice of completion of acquisition and file it with the Commission within 15 days of the completion of the acquisition.

B. Acquisition of a Comprehensive Care Facility, Home Health Agency, or Hospice.

(1) In addition to providing the information required in §A of this regulation, a person seeking to acquire a comprehensive care facility, home health agency, or hospice shall:

(a) Identify each person with an ownership interest in the acquiring entity or a related or affiliated entity, including

(i) The percentage of ownership interest of each such person; and

(ii) The history of each such person’s experience in ownership or operation of health care facilities;

(b) Provide information on corporate structure and affiliations of the acquirer, purchase price, source of funds, and other relevant data as requested;

(c) Affirm that the services provided will not change as a result of the proposed acquisition and that its commitment to Medicaid participation, if any, will not decrease as a result of the proposed acquisition; and

(d) Affirm under penalties of perjury, that within the last 10 years no owner or former owner of the purchaser, or member of senior management or management organization, or a current or former owner or senior manager of any related or affiliated entity has been convicted of a felony or crime, or pleaded guilty, nolo contendere, entered a best interest plea of guilty, received a diversionary disposition regarding a felony or crime, and that the purchaser or a related or affiliated entity has not paid a civil penalty in excess of $10 million dollars that relates to the ownership or management of a health care facility.

(2) Disqualification for Acquisition. A comprehensive care facility, home health agency, or hospice may not be acquired by an entity if an owner or member of senior management or an owner or member of senior management of a related or affiliated entity of the acquiring entity has been convicted of a felony or crime or pleaded guilty, nolo contendere, entered a best interest plea of guilty, or received a diversionary disposition regarding a felony or crime within the last 10 years, unless:

(a) All of the individuals involved in the fraud or abuse are no longer associated with the entity or any of its related or affiliated entities;

(b) Each entity has fully complied with each applicable plan of correction; and

(c) If applicable, each entity has fully complied with each condition of the imposition of a civil penalty or agreed disposition.

(3) In an acquisition of a home health agency or hospice, the purchaser may only acquire the authority to provide services in jurisdictions for which the facility being acquired was granted a CON or is otherwise recognized by the Commission as having legal authorization.

C. Closure of a Health Care Facility.

(1) A CON is not required to close a health care facility or part of a health care facility, including a State hospital, if it provides notice to the Commission at least 90 days prior to the closing or 45 days prior to the partial closing and complies with the provisions of §C(2)—(4) of this regulation, if applicable.

(2) An acute general hospital shall hold a public informational hearing in accordance with Regulation .04D of this chapter if the hospital:

(a) Files a notice of the proposed closing of the hospital with the Commission; or

(b) Is located in a jurisdiction with fewer than three acute general hospitals and files a notice of the partial closing of the hospital.

(3) The Commission may require a health care facility not covered by §C(2) of this regulation to hold a public information hearing in accordance with Regulation .04D of this chapter.

(4) If a hospital that intends to close has outstanding public obligations issued on its behalf, written notice of its intended closing shall be given to the Maryland Health and Higher Educational Facilities Authority and the Health Services Cost Review Commission by the:

(a) Commission, within 5 days after receiving a written notification by the hospital of its intended closure;

(b) Hospital, within 10 days of filing with the Commission its written notification of its intended closure, along with a written statement of all public obligations issued on behalf of the hospital that provides the information required by Economic Development Article, §10-346(a)(2), Annotated Code of Maryland; and

(c) Commission, that the hospital held a public informational hearing in consultation with the Commission in the jurisdiction where the hospital is located.

D. Temporary Delicensure or Suspension of Bed Capacity, Health Care Facility, or CON-Approved Service.

(1) A temporary delicensure of licensed bed capacity or a licensed and operating health care facility or a temporary suspension of a CON-approved service does not require CON review, and the Commission will retain the bed capacity or health care facility on its inventory or permit the reimplementation of the CON-approved service without obtaining a CON for up to 1 year, if the owner or licensed operator:

(a) Provides written notice to the Commission at least 30 days before the proposed temporary delicensure or temporary service suspension;

(b) Identifies good cause for the proposed temporary delicensure or temporary service suspension;

(c) States the intention either to bring the bed capacity back onto the facility's license or relicense the health care facility or reimplement the CON-approved service at the end of the 1-year period, or to notify the Commission that it intends to take another of the actions permitted under this subsection; and

(d) Has received authorization from the Executive Director for the temporary delicensure or temporary service suspension.

(2) Bed capacity or a facility that has been authorized by the Commission to be temporarily delicensed or a CON-approved service that has been authorized by the Commission to be temporarily suspended is not subject to the provisions of this section:

(a) During the pendency at the Commission of a letter of intent to apply or an application for CON approval involving the temporarily delicensed bed capacity or facility or the temporarily suspended CON-approved service;

(b) If the Commission has issued a Certificate of Need to reimplement the facility's temporarily delicensed bed capacity or the facility’s temporarily suspended CON-approved service;

(c) If the Commission has approved a request pursuant to Regulation .03 or .04 of this chapter to reimplement the bed capacity, facility or CON-approved service, and has determined that the bed capacity, facility, or CON-approved service may be reimplemented without a CON or other Commission approval, including but not limited to actions that may be undertaken by a merged asset system of which the facility is a member;

(d) If the Commission receives a notice of acquisition of the temporarily delicensed bed capacity or facility and the buyer and seller timely complete the acquisition, in accordance with Regulation .03 of this chapter; or

(e) If the Commission receives written notification that the owner or operator of the temporarily delicensed bed capacity or facility has applied for relicensure or reimplementation of the temporarily suspended CON-approved service.

(3) The requirements and procedures in this subsection do not apply to:

(a) A proposal to close, on either a temporary or a permanent basis:

(i) An acute general hospital or part of a hospital, including a medical service, in a jurisdiction with fewer than three acute general hospitals; or

(ii) A health care facility that provides any medical service approved by the Commission as a regional or Statewide health resource; or

(b) A temporary interruption of a CON-approved service that does not exceed 30 days.

(4) This section does not substitute any notice or approvals that may be required from another body that regulates the bed capacity, health care facility, or CON-approved service.

(5) A health care facility may not request authorization by the Commission to temporarily delicense bed capacity or the entire health care facility or to temporarily suspend a CON-approved service more than one time in a 1-year period.

(6) No fewer than 30 days before the end of the 1-year or other applicable period, a health care facility that has temporarily delicensed bed capacity or its entire facility or has temporarily suspended a CON-approved service shall notify the Commission that, before the end of the 1-year or other applicable period, it will:

(a) Apply to relicense the bed capacity or the entire facility temporarily delicensed or reimplement the CON-approved service temporarily suspended pursuant to this subsection;

(b) Submit and receive the Executive Director's approval of a specific plan for the relicensure of the bed capacity or facility or for the reimplementation of the temporarily suspended CON-approved service, that:

(i) Imposes stated time frames by which steps toward the relicensure of the bed capacity or facility or reimplementation of the service will be accomplished, or the bed capacity, facility, or service will be deemed abandoned; and

(ii) May be revised upon a proposal by the owner or operator, with the approval of the Executive Director;

(c) File a letter of intent, followed within 60 days by a Certificate of Need application, or request the applicable level of Commission action pursuant to Regulations .03 and .04 of this chapter, for the relocation of the bed capacity or facility, or for a capital expenditure deemed necessary to relicense the temporarily delicensed beds or facility or necessary to reimplement the temporarily suspended CON-approved service;

(d) Execute a binding contract to transfer ownership of the health care facility, if the requirements of §A of this regulation are met;

(e) Execute a binding contract to transfer ownership of the previously licensed bed capacity, contingent on the filing within 90 days for those filings not subject to a published review cycle or upon the Commission’s next published review schedule of a letter of intent to apply for CON approval, or other applicable level of Commission action pursuant to Regulations .03 and .04 of this chapter if required, to relocate the bed capacity; or

(f) Relinquish the bed capacity or the authorization to provide the CON-approved service, or seek the appropriate Commission approval to delicense and permanently close the health care facility.

(7) The Executive Director may extend the period of a temporary delicensure or temporary service suspension under this subsection beyond 1 year for good cause.

(8) An application for a CON to reimplement at another location any previously operating bed capacity that has not operated for 2 or more years shall demonstrate that the bed capacity is needed in the jurisdiction.

(9) If, at the end of the 1-year period or other time period permitted under this section, the requirements of §C(5) or (7) of this regulation have not been met, no request for an extension of time has been granted pursuant to §C(6) of this regulation, and the previously delicensed bed capacity or facility has not been relicensed or the previously suspend service has not been reimplemented, the bed capacity, health care facility, or service is deemed abandoned by its owner or operator.

E. A CON is not required to relocate an existing health care facility owned or controlled by a merged asset system, if:

(1) The proposed relocation is not across jurisdictional boundaries and is to a site in:

(a) The primary service area of the hospital to be relocated; or

(b) The service area of the non-hospital health care facility to be relocated;

(2) At least 45 days before the proposed relocation, notice is filed with the Commission, which will publish notice of the proposed relocation in the Maryland Register and a newspaper of general circulation in the affected area; and

(3) The relocation of the existing health care facility does not:

(a) Change the type or scope of health care services offered; and

(b) In the case of a hospital, require a capital expenditure that exceeds the hospital capital threshold, except as provided in §J of this regulation.

F. Change in Bed Capacity.

(1) A CON is not required to increase or decrease bed capacity if:

(a) For a health care facility that is not an acute general hospital, the change does not exceed ten beds or 10 percent of the facility’s total bed capacity, whichever is less, and the facility’s licensed bed capacity has not changed in the preceding 2 years;

(b) For a special rehabilitation hospital or a residential treatment center, the change does not exceed ten beds or 40 percent of its current bed capacity, whichever is less, and the facility’s licensed bed capacity has not changed in the preceding 2 years;

(c) For an acute general hospital located in a jurisdiction with three or more acute general hospitals, the change:

(i) Is between hospitals in a merged asset system located within the same health planning region;

(ii) Does not involve comprehensive care or extended care beds;

(iii) Does not occur earlier than 45 days after a notice of intent to reallocate bed capacity is filed with the Commission; and

(iv) Does not create a new health care service through the relocation of beds from one jurisdiction to another jurisdiction pursuant to this subsection;

(d) The change in bed capacity is the result of the annual recalculation of licensed bed capacity in acute general hospitals provided for under Health-General Article, §19-307.2, Annotated Code of Maryland;

(e) For an existing medical service provided by an acute general hospital:

(i) The total bed capacity of the hospital does not increase;

(ii) The change is maintained for at least a 1-year period, unless modified pursuant to CON or exemption from CON, or as a result of the annual recalculation of hospital licensed bed capacity required at Health-General Article, §19-307.2, Annotated Code of Maryland; and

(iii) The hospital notifies the Commission at least 45 days before the proposed change in bed capacity of its medical services; or

(f) At least 45 days before increasing or decreasing bed capacity, written notice of the intent to change bed capacity is filed with the Commission, and the increase or decrease in bed capacity will occur in:

(i) An existing general hospice that has a current license issued by the Secretary and involves an increase in bed capacity for the provision of inpatient hospice care under the facility’s current license; or

(ii) An existing intermediate care facility that offers residential or intensive substance-related disorder treatment services for withdrawal management and treatment under the facility’s current license issued by the Secretary.

(2) Except as otherwise provided in this regulation, a CON is not required to decrease bed capacity at a health care facility if at least 45 days before decreasing bed capacity, written notice of the intent to change bed capacity is filed with the Commission.

G. A CON is not required for a non-hospital health care facility project by a health maintenance organization if:

(1) At least 90 percent of the patients who will receive health care services from the facility are enrolled in the health maintenance organization;

(2) The health maintenance organization requests a determination of coverage from Commission staff that describes its proposed project, including its street address, and the health care service to be provided; and

(3) Commission staff issues a determination that CON or other Commission review is not required.

H. A home health agency is not required to obtain a CON to open a branch office, as defined by the Centers for Medicare and Medicaid Services at 42 CFR §484.2, although notice to the Commission is required.

I. Religious Orders.

(1) A CON is not required before a religious order seeks licensure to operate a comprehensive care facility for the exclusive use of members of that religious order, provided that the religious order seeks and receives a determination of coverage from Commission staff that a CON is not required.

(2) The request for a determination of coverage shall provide the following:

(a) The name and address of the facility;

(b) The number of beds in the facility;

(c) The name of the religious order that will own and operate the facility;

(d) An affirmation that the facility will be owned and operated by the religious order for the exclusive use of its members; and

(e) Agreement to participate in the Maryland Long-Term Care Survey, authorized by COMAR 10.24.03.

(3) Commission staff shall issue a determination that either CON review is not required, with or without conditions, or that CON review is required for stated reasons.

J. Hospital Capital Expenditures in Excess of the Hospital Capital Threshold.

(1) A CON is not required by a hospital before it obligates an amount exceeding the hospital capital threshold for capital expenditures for physical plant construction or renovation, or before it receives a donated physical plant whose appraised value exceeds the hospital capital threshold, under the following circumstances:

(a) The capital expenditure may be related to patient care.

(b) The capital expenditure does not require, over the entire period or schedule of debt service associated with the project or plant, a total cumulative increase in patient charges or hospital rates of more than $1,500,000 for the capital costs associated with the project.

(c) At least 45 days before an obligation is made or the physical plant is donated, the hospital provides notice to the Commission and to the Health Services Cost Review Commission, in the form of a written request for determination of coverage, as provided in Regulation .14A of this chapter, which shall contain the following information:

(i) A description of the proposed capital project, including whether it involves new construction, renovation of or additions to the existing physical plant, or the donation of a physical plant, with any necessary adaptations;

(ii) The total capital costs associated with the project;

(iii) The sources and uses of funds to be applied to the project, including hospital equity contributions, if applicable, as documented by audited financial statements of the hospital and relevant subsidiary corporations, if any, from which funds are to be taken;

(iv) A description of the financing arrangement, if applicable, for the proposed project, including the debt service schedule; and

(v) A statement by one or more persons authorized to represent the hospital that the hospital does not require a total cumulative increase in patient charges or hospital rates of more than $1,500,000 for the capital costs associated with the project.

(2) After consultation with the Health Services Cost Review Commission, the Commission shall issue a determination whether CON review is required within 45 days after it receives the information specified in this section. If Commission staff does not issue a determination within 60 days of receipt of all relevant financial information by the Commission and by the Health Services Cost Review Commission, the Commission is considered to have issued a determination that approval of the capital expenditure is not required by the Commission or by the Health Services Cost Review Commission.

(3) Commission staff shall issue a determination that either CON review is not required, with or without conditions, or that CON review is required for stated reasons.

K. Continuation of Specific Exception from Certificate of Need for Continuing Care Retirement Communities.

(1) A comprehensive care facility on the campus of a continuing care retirement community is excepted from CON review, provided that the requirements of Health-General Article, §19-114(d)(2)(ii)(1), Annotated Code of Maryland, and this chapter are met, and that the number of comprehensive care beds located on the campus of the continuing care retirement community does not exceed:

(a) 20 percent of the number of independent living units at a continuing care retirement community that has 300 or more independent living units; or

(b) 24 percent of the number of independent living units at a continuing care retirement community that has fewer than 300 independent living units.

(2) Limited Direct Admission. Notwithstanding the provisions of Health-General Article, §19-114(d)(2)(ii), Annotated Code of Maryland, a continuing care retirement community does not lose its exception from CON when the continuing care community admits an individual directly to a comprehensive care facility within the continuing care community under either of the following circumstances:

(a) Two individuals having a long-term significant relationship are admitted together to a continuing care retirement community and:

(i) The admission occurs after October 1, 1999;

(ii) The admission includes spouses, two relatives, or two individuals having a long-term significant relationship, as defined in Regulation .01B of this chapter and supported by documentary proof in existence for at least 1 year before application to the continuing care retirement community, admitted at the same time, under a joint contract, who are jointly responsible for expenses incurred under the joint contract; and

(iii) One of the individuals admitted under the joint contract will reside in an independent living unit or an assisted living unit; or

(b) An individual is admitted directly into a comprehensive care bed at a continuing care retirement community and:

(i) The individual must have executed a continuing care agreement and must have paid entrance fees that are at least equal to the lowest entrance fee charged by the continuing care retirement community for its independent or assisted living units;

(ii) The individual must pay the entrance fee by the same method, terms of payment, and time frame as a person who immediately assumes residence in an independent or assisted living unit at that continuing care retirement community; and

(iii) The individual admitted to the comprehensive care bed must have the potential for eventual transfer to an independent living unit or assisted living unit at that continuing care retirement community, as determined by the subscriber's personal physician, as defined in Regulation .01B of this chapter.

(3) Under §K(2)(b)(iii) of this regulation, an individual is deemed not to have potential for eventual transfer to an independent living unit or assisted living unit if the individual can qualify for hospice services under federal Medicare regulations or if the individual has an irreversible condition that would make it unlikely that the individual could transfer to an independent living unit or assisted living unit at the continuing care retirement community. Irreversible conditions include quadriplegia, ventilator dependence, and any end-stage condition.

(4) The total number of comprehensive care beds occupied by individuals who are directly admitted to comprehensive care beds pursuant to §K(2)(b) of this regulation may not exceed 20 percent of the total number of licensed and available comprehensive care beds at the continuing care retirement community.

(5) The admission of the individual directly into the comprehensive care bed pursuant to §K(2)(b) of this regulation may not cause the occupancy of the comprehensive care facility at the continuing care retirement community to exceed 95 percent of its current licensed capacity.

(6) The comprehensive care facility at the continuing care retirement community shall maintain an attestation by the individual's personal physician that the individual has the potential for eventual transfer to an independent living unit or an assisted living unit.

(7) The nursing home administrator of the comprehensive care facility at each continuing care retirement community who admits an individual directly to a comprehensive care bed pursuant to §K(2)(b) of this regulation shall maintain information, in a format specified by the Commission, about each admission in the format required by the Commission and encrypted by the continuing care retirement community so that the individual's identity will not be disclosed. The forms shall be maintained by the nursing home administrator, to be provided to Commission staff upon its request, and shall include:

(a) The number and utilization of licensed comprehensive care beds excluded from Certificate of Need requirements at the continuing care retirement community;

(b) The admission source of each individual admitted pursuant to §K(2)(b) of this regulation to a comprehensive care bed excluded from Certificate of Need requirements at the continuing care retirement community;

(c) For an individual admitted pursuant to §K(2)(b) of this regulation, the amount of and terms of payment for the entrance fee;

(d) The dates of admission and discharge of each individual admitted pursuant to §K(2)(b) of this regulation;

(e) The site to which an individual directly admitted pursuant to §K(2)(b) of this regulation is discharged; and

(f) Any other information as required by Commission staff.

.04 Exemption from Certificate of Need Review.

A. The Commission may exempt from the requirement of CON review and approval the following actions:

(1) Merger or consolidation of two or more hospitals or other health care facilities, if the facilities or an organization that operates the facilities give the Commission 45 days written notice of their intent to merge or consolidate;

(2) Relocation of an existing health care facility owned or controlled by a merged asset system, if:

(a) The relocation is to a site outside the primary service area of the health care facility to be relocated but within the primary service area of the merged asset system; and

(b) The relocation of the existing health care facility does not:

(i) Change the type or scope of health care services offered; and

(ii) Require a capital expenditure for its construction that exceeds the capital review threshold, adjusted for inflation, except as provided by Regulation .03J of this chapter;

(3) A change in the bed capacity of an existing health care facility pursuant to the consolidation or merger of two or more health care facilities, or conversion of a health care facility or part of a health care facility to a non-health-related use, except as provided in Regulation .03F of this chapter;

(4) A change in the type or scope of the health care services offered by a health care facility, if, at least 45 days before increasing or decreasing the volume of one or more health care services, the Commission finds that the proposed change is pursuant to the:

(a) Consolidation or merger of two or more health care facilities;

(b) Conversion of all or part of a health care facility to a non-health-related use; or

(c) Conversion of a hospital to a limited service hospital;

(5) A capital expenditure that exceeds the review threshold for capital expenditure made as part of a consolidation or merger of two or more health care facilities, or conversion of a health care facility or part of a health care facility to a non-health-related use; or

(6) The establishment of a freestanding medical facility through the conversion of an acute general hospital, as provided in §F of this regulation and in COMAR 10.24.19.04C.

B. Unless otherwise provided in this chapter for a specific type of health care facility, complete notice of intent to seek exemption from CON review shall be filed with the Commission at least 45 days before the intended action, and shall include:

(1) The name and location of each affected health care facility;

(2) A general description of the proposed project including, in the case of mergers and consolidations, any proposed:

(a) Conversion, expansion, relocation, or reduction of one or more health care services;

(b) Renovation of existing facilities;

(c) New construction;

(d) Relocation or reconfiguration of existing medical services; or

(e) Change in bed capacity at each affected facility;

(3) The scheduled date of the project's completion;

(4) Identification of each outstanding public obligation;

(5) Information demonstrating that the project:

(a) Is not inconsistent with the State Health Plan;

(b) Will result in the delivery of more efficient and effective delivery of health care services; and

(c) Is in the public interest; and

(6) Any other information, analyses, or other requirements established in State Health Plan regulation for requests seeking exemption from CON review.

C. Notice by the Commission to the Public, Elected Officials, and Other State Agencies.

(1) Within 5 days after it receives a complete Notice of Intent from a health care facility seeking exemption from CON review, the Commission shall publish notice of its receipt:

(a) In at least one newspaper of general circulation in the affected area;

(b) In the next available issue of the Maryland Register; and

(c) On the Commission’s website.

(2) The Commission shall mail the same notice to elected public officials in whose district or jurisdiction the exemption from CON review is proposed.

(3) The Commission shall solicit comment from the affected public, in evaluating whether the action or project proposed for exemption from CON review is in the public interest.

D. Public Informational Hearing.

(1) An acute general hospital shall hold a public informational hearing in the jurisdiction where it is located within 30 days after it has filed with the Commission notice of its intent to:

(a) Close;

(b) Partially close, if the hospital is located in a jurisdiction with fewer than three acute general hospitals; or

(c) Convert to a limited service hospital or freestanding medical facility.

(2) Before holding the public informational hearing, the hospital shall consult with the Commission, to ensure that:

(a) Within 5 days of notifying the Commission of its intent to close, partially close, or convert, the hospital has provided public notice of the proposed closure or conversion and of the time and location of the required public informational hearing and how the public can electronically obtain additional information, including publication in at least one newspaper of general circulation in the affected area; and

(b) The public hearing will address the information required by §D(3) of this regulation.

(3) Requirements for a Public Informational Hearing.

(a) The acute general hospital proposing to close, partially close, or convert to a limited service hospital or freestanding medical facility shall hold a public informational hearing at the hospital or if that is not feasible at a public meeting area near the hospital.

(b) The hospital shall post a notice of the public informational hearing in public areas of its facility and on the landing page of its website.

(c) The hospital shall identify to the public the names of the senior management and Board of Directors attending the meeting.

(d) The hospital shall present at least the following information at the public informational hearing:

(i) The reasons for the closure, partial closure, or conversion;

(ii) The plan for transitioning acute care services previously provided by the hospital to residents of the hospital service area;

(iii) The plan for addressing the health care needs of the residents of the hospital service area;

(iv) The plan for retraining and placing displaced employees;

(v) The plan for the hospital’s physical plant and site; and

(vi) The proposed timeline for the closure, partial closure, or conversion to a freestanding medical facility.

(e) The public informational hearing shall be recorded.

(f) Within 10 business days after the public informational hearing, the hospital shall make available on its website a recording of the public informational meeting and provide a written summary of the hearing, which shall also be provided to:

(i) The Governor;

(ii) The Secretary;

(iii) The governing body of the jurisdiction in which the hospital is located;

(iv) The local health department and the local board of health or similar body for the jurisdiction in which the hospital is located;

(v) The Commission; and

(vi) Subject to State Government Article, §2-1257, Annotated Code of Maryland, the Senate Finance Committee, the House Health and Government Operations Committee, and the members of the General Assembly who represent the district in which the hospital is located.

E. Commission Action.

(1) Unless otherwise provided in this chapter for a specific type of health care facility, the Commission shall issue an exemption from CON review to the health care facility or the merged asset system seeking this determination within 45 days after it receives the notice of intent required by §B of this regulation, if:

(a) The facility or system has provided the information required by the notice of intent, and has held a public informational hearing if required by §D of this regulation; and

(b) The Commission, in its sole discretion, finds that the action proposed:

(i) Is not inconsistent with the State Health Plan or an institution-specific plan developed by the Commission under Health-General Article, §19-119, Annotated Code of Maryland;

(ii) Will result in more efficient and effective delivery of health care services; and

(iii) Is in the public interest.

(2) For any project that the Commission may exempt from CON review under §A of this regulation, for which a final Commission decision has not been issued within 45 days after it receives a complete notice of intent as required by §B of this regulation, Commission staff shall provide a status report at the next Commission meeting and any subsequent Commission meeting stating the reasons for the delay and the expected time frame for issuing its final decision.

(3) CON review is not required and the exemption request shall be deemed approved for any project which the Commission may exempt from CON review under §A of this regulation if final action by the Commission does not occur within 90 days after the facility or system has provided complete notice of intent as required by §B of this regulation and has held a public hearing if required by §D of this regulation.

(4) Upon request, Commission staff shall provide written confirmation that an exemption request has been deemed approved in accordance with §E(3) of this regulation.

F. Freestanding Medical Facility.

(1) In accordance with COMAR 10.24.19.04C and this regulation, the Commission may exempt from CON review the establishment of a freestanding medical facility as a result of a conversion from a licensed acute general hospital.

(2) At least 60 days before the conversion, written notice of intent to convert the licensed general hospital to a freestanding medical facility shall be filed with the Commission in accordance with COMAR 10.24.19.04C.

(3) Provided that all the requirements of this regulation and COMAR 10.24.19.04C are met, the Commission shall grant the exemption if it finds, in its sole discretion, that the conversion:

(a) Is consistent with the State Health Plan;

(b) Will result in the delivery of more efficient and effective health care services;

(c) Will maintain adequate and appropriate delivery of emergency care within the statewide emergency medical services system as determined by the State Emergency Medical Services Board; and

(d) Is in the public interest.

(4) The Commission may approve, approve with conditions, or deny the requested exemption.

(5) Failure to maintain compliance with conditions on an exemption or with the time frame for completion of the conversion may result in withdrawal of the exemption issued by the Commission in accordance with Regulation .12 of this chapter. An exemption holder may request approval of a reasonable modification to the conversion timeline in accordance with Regulation .12A(4) of this chapter.

.05 Ambulatory Surgery Centers: Determination of Coverage and Data Reporting.

A. Determination of Coverage.

(1) A CON is not required for an ambulatory surgery center.

(2) A person shall obtain a determination of coverage from the Commission before:

(a) Establishing a new ambulatory surgery center;

(b) Adding a new operating room or any other rooms in which procedures are performed to an existing ambulatory surgery center; or

(c) Making any change in the information provided for initial determination of coverage.

(3) Change in Location. A determination of coverage for an ambulatory surgery center is issued only for the exact address specified in the determination. A change in address or in the layout of the center before it is built, developed, or established requires a new determination of coverage.

(4) Change in Ownership. A determination of coverage regarding an ambulatory surgery center is issued only for the person specified in the determination. If the principal owner or a majority of other owners of an existing ambulatory surgery center is expected to change, a request for a new determination of coverage shall be filed and include:

(a) A complete list of the existing owners and the post-transaction owners; and

(b) An attestation by the ambulatory surgery center that, subsequent to the issuance of the original determination of coverage, no changes have been made and that, as a result of the planned change in ownership, no changes will be made:

(i) To the physical plant or layout of the ambulatory surgery center; or

(ii) In the surgical specialties provided.

(5) Expiration of Determination of Coverage. A determination of coverage for a new ambulatory surgery center or for new capacity at an existing ASC-P or ASC-1 may be issued and is effective for 2 years from the date of the determination. If that capacity is not built or established within 2 years, the determination of coverage is void.

(6) Notice. Before seeking to establish a new operating room or any other rooms in which procedures are performed, or to make any change in the information provided for initial determination of coverage, a person shall provide notice to the Commission at least 45 days in advance that includes all information required by COMAR 10.24.11.04A.

(7) For purposes of this regulation, all ambulatory surgery centers that are located in the same building and that share any common ownership or control shall be considered one entity, and their operating rooms shall be considered together for purposes of determining coverage under Regulation .02 of this chapter.

(8) Except as provided in this regulation or permitted in the Certificate of Need or exemption criteria in the State Health Plan under COMAR 10.24.11, an ambulatory surgical facility or other entity primarily providing ambulatory surgical services may not relocate beyond an adjacent site or expand its number of operating rooms without obtaining a Certificate of Need.

(9) A CON is not required for ambulatory surgical services provided as part of an office of one or more individuals licensed to practice dentistry under Health-Occupations Article, Title 4, Annotated Code of Maryland, for the purpose of practicing dentistry, if the ambulatory surgical facility is not used in a medical practice other than dentistry.

B. Data Reporting and Annual Survey of Ambulatory Surgical Centers, Facilities, and Providers.

(1) To provide information for the Commission's planning purposes and to determine changes in circumstances and operation that may affect coverage by CON requirements, each existing ambulatory surgery center, facility, office, and provider that primarily provides ambulatory surgical services shall annually provide to the Commission the information required by COMAR 10.24.04.

(2) A person providing ambulatory surgical services who is required to obtain a license under Health-General Article, §19-3B-02(a), Annotated Code of Maryland, shall annually provide the required information on a form provided by the Commission.

.06 Access to Information and Facilities.

To the extent permitted by law, an applicant shall provide access to general information, records, plans and specifications, meetings, sites, and facilities to Commission staff upon proper notice and as is reasonable and necessary in the performance of the Commission's responsibilities. The Commission may require other health care providers to provide similar information.

.07 Preapplication Procedures.

A. Letter of Intent.

(1) A prospective applicant for a Certificate of Need shall submit to the Center for Health Care Facilities Planning and Development a brief letter of intent, with a copy to each local health department in the health planning region. The Center for Health Care Facilities Planning and Development shall formally log all letters of intent upon receipt.

(2) A prospective applicant identified in a letter of intent may be the person or persons who will be the licensee. If the legal entity that will be the licensee has not yet been formed or finalized at the time of filing a letter of intent:

(a) A prospective applicant shall identify the intended ownership and control of the licensee with the same level of specificity as required in §A(3) of this regulation; and

(b) The legal entity that will be the licensee shall be formed at the time of filing an application for a CON.

(3) The letter of intent shall include the following information:

(a) The identity of each person on whose behalf the letter of intent is filed, including:

(i) The name and address of each such person; and

(ii) In the case of a letter of intent filed on behalf of a person that is not a natural person, the date the entity was formed, the business address of the entity, and the identity and percentage of ownership of all persons having an ownership interest of 5 percent or more in the entity;

(b) A description of the proposed project;

(c) The quantity and types of beds or health services involved; and

(d) The specific location and each jurisdiction in which services will be provided, according to the relevant planning region in the State Health Plan for that facility or service.

(4) A letter of intent shall be submitted in accordance with the published review schedule established by the Commission in accordance with Regulation .08D of this chapter, but if no applicable review schedule has been published, a letter of intent may be submitted at any time.

(5) Notice of the receipt of a letter of intent for a project not subject to a published review schedule shall be placed in the Maryland Register, and a 30-day period initiated for the submission of any other letters of intent for comparable projects to be included in a comparative review.

(6) Upon docketing of an application, the letter of intent for that project is no longer valid for purposes of comparative review.

(7) If a letter of intent is submitted for a proposed health care project which might be comparable to a project application which has been submitted but not yet docketed, the projects shall be given a comparative review.

(8) Notwithstanding any other regulation in this chapter, no letter of intent or application shall initiate a comparative review with an earlier filed letter of intent or application if the earlier filed letter of intent predates the later filed letter of intent by a period of more than 60 days, unless the Executive Director finds that the applicant in the earlier filed matter has unreasonably delayed in the advancement of its application through staff’s completeness review, and that good cause exists to review the projects in comparative review.

(9) If a person submits a letter of intent for a proposed health care project that might be comparable to an application which has already been docketed, a comparative review may not be conducted.

(10) If an application for a CON is not filed in accordance with Regulation .08A(1) of this chapter, the letter of intent is void.

(11) Letters of intent are subject to public inspection during normal business hours.

B. Preapplication Conference. After the filing of a letter of intent, an applicant may request that the Commission staff arrange a preapplication conference to discuss:

(1) Commission procedures for reviewing the application or applications;

(2) Information and data to be included in the application or applications;

(3) The State Health Plan requirements that may affect the project; and

(4) Other matters relevant to the filing and processing of the application or applications.

C. The discussions in §B of this regulation are informal, and statements at the meetings are not admissible as evidence at a Commission proceeding.

.08 Procedure for Review of CON Applications.

A. Review Schedule.

(1) An application shall be submitted in accordance with the published review schedule established by the Commission in accordance with §D(1) of this regulation, but if no applicable review schedule has been published, an application may be submitted at any time 60 days after the filing of the letter of intent but no more than 180 days after the filing of the letter of intent, unless a shorter period has been approved by the Executive Director.

(2) In a case when need for additional service capacity is projected, the Commission may not docket an application until it has made a final decision on each previously docketed application for a comparable project, unless the most recently published need projections or State Health Plan would support the approval of both projects.

B. Submission of Application.

(1) An application for a CON shall be submitted to the Commission's Center for Health Care Facilities Planning and Development in the form and manner prescribed by the Commission.

(2) The application, and all information supplementing the application, shall be signed by at least one principal of the applicant, who shall sign a statement as follows: “I solemnly affirm under penalties of perjury that the contents of the application (or the supplementary information) are true to the best of my knowledge, information, and belief.”

C. Completeness Review and Docketing.

(1) Prior to docketing an application for review, Commission staff shall review the application for completeness:

(a) Within 20 business days for projects involving the establishment of a health care facility, the relocation of a health care facility or the introduction by a hospital of cardiac surgery or organ transplantation; and

(b) Within 15 business days for all other projects.

(2) Commission staff may schedule a conference with the applicant within the completeness review period prescribed in §C(1) of this regulation.

(3) Commission staff shall determine whether the application contains all the information requested in the application. If staff determines that the application is not complete, the staff shall make one written request for additional information that specifies the information requested and the 15-business-day deadline for the applicant to supply the requested information. For good cause, staff may make one additional request for information, to which the applicant shall have 10 business days to respond. Additional information may be requested by staff beyond that required to make the application complete, which shall also be subject to a time limit for the applicant to supply the requested information.

(4) If Commission staff determines, based on staff’s review of the application and any additional information provided in response to a staff request for additional information, that the application is complete and conforms with the applicable docketing rules in the State Health Plan, the staff shall docket the application for review and publish notice of the docketing on the next available publication date of the Maryland Register.

(5) If an applicant fails to supply the required information within the specified time limit, staff may dismiss the application. Staff may, at its discretion, extend the response time for an applicant in a noncomparative review, or, with the consent of all applicants, for an applicant in a comparative review, up to an additional 10 business days, or more upon a demonstration of good cause for the additional extension.

(6) Commission staff or a reviewer may:

(a) Request information from the applicant supplementing an otherwise complete application at any time during the review of an application; and

(b) Set reasonable time limits for the applicant to supply the requested information.

D. Notice to the Public.

(1) At least once each year, Commission staff shall publish in the Maryland Register a schedule for conducting reviews of applications for designated services by health planning region, as follows:

(a) The schedule shall include the status of applicable need forecasts found in the State Health Plan or published elsewhere as required by the State Health Plan for conducting the reviews of the designated services by health planning region;

(b) The schedule shall establish application submission dates not sooner than 3 months following the publication of the proposed schedule; and

(c) The schedule shall identify scheduled reviews by health planning region and shall state the dates for the receipt of letters of intent and the submission of applications.

(2) Within 10 business days of receiving a complete application, Commission staff shall request that the Maryland Register publish notice to the public of the docketing of an application. The Commission shall also publish notice in a newspaper of general circulation in the area of the proposed project. Notices shall comply with State Government Article, §10-207, Annotated Code of Maryland, and shall include:

(a) A citation to the Commission's enabling act and this chapter, the name of the applicant, the matter or docket number, and a general description of the project containing the information required in letters of intent;

(b) An explanation that a person who meets the definition of “interested party” in Regulation .01B of this chapter may become an interested party to the review of this application by submitting written comments on the application within 30 days of its docketing; and

(c) A statement that a person may request in writing that the Commission advise them of further notices of the proceedings on the application, and that any further notice of proceedings will only be sent to persons who have submitted a written request.

(3) If an evidentiary hearing is held in accordance with Regulation .11 of this chapter, the Commission shall provide notice to each person who has requested to be apprised of further proceedings on the application.

E. Modifications to Letters of Intent and Applications.

(1) An applicant shall give written notice to the Center for Health Care Facilities Planning and Development of any modifications to the applicant's letter of intent before submitting an application.

(2) An application may be modified until the 45th day after docketing. After the 45th day of docketing, an application may only be modified as a result of a project status conference held pursuant to Regulation .09A(2) of this chapter or upon a showing of good cause.

(3) If an application is modified:

(a) The Commission shall provide:

(i) Notice of the changes by a dated posting on the Commission's website and in a newspaper of general circulation in the affected jurisdiction; and

(ii) A 10-business-day period following the website posting for comments on the changes; and

(b) Each applicant in the review will be deemed to have waived the right to a final decision by the Commission within the statutorily prescribed time.

(4) The following modifications to a proposed project require a new Certificate of Need application:

(a) Changes in the fundamental nature of a proposed facility or the medical services to be provided;

(b) Increases in the total bed capacity of a proposed facility; or

(c) A change in the site of a proposed facility.

F. Comments by a Person Seeking Interested Party Status or by a Participating Entity and Applicant's Response.

(1) Written Comments by a Person Seeking Interested Party Status.

(a) A person seeking interested party status shall file written comments on an application within 30 days of docketing.

(b) The comments shall include information sufficient to establish interested party status, as defined in Regulation .01B of this chapter.

(c) If a person seeking interested party status is opposing an application, the comments shall state with particularity the State Health Plan standards or the review criteria in §G of this regulation that the person seeking interested party status believes have not been met by the applicant and the reasons why the applicant does not meet those standards or criteria.

(d) Factual assertions made in comments by a person seeking interested party status that are not included in the record shall be accompanied by appropriate documentation and sworn affidavit.

(e) In a review with only one applicant, the comments shall be 25 pages or fewer, double-spaced, excluding attachments.

(f) In a comparative review, the comments shall be 35 pages or fewer, double-spaced, excluding attachments.

(2) Written Comments by a Person Seeking Participating Entity Status.

(a) A person seeking participating entity status shall file written comments on an application within 30 days of docketing that:

(i) Include information that the participating entity wishes the Commission to consider; and

(ii) State with particularity the State Health Plan standards or review criteria in §G of this regulation that it believes have not been met by the applicant, and the reasons why the applicant does not meet those standards or criteria.

(b) A person granted participating entity status shall be copied on Commission documents in the review of the application.

(c) A person granted participating entity status is not an interested party and has no right to judicial review of a final Commission decision.

(3) Response to Comments.

(a) An applicant is permitted to make one written filing responding to all written comments on its application within 15 days of receipt of those comments.

(b) The applicant’s response may not be more than 25 pages, double-spaced, excluding attachments.

(c) In a comparative review, the applicant’s response may not be more than 35 pages, double-spaced, excluding attachments.

(d) Factual assertions in an applicant's response that are not included in the record shall be accompanied by appropriate documentation and sworn affidavit.

G. Criteria for Review of Application.

(1) In a Certificate of Need review, the applicant carries the burden of proving by a preponderance of the evidence that the project meets the applicable criteria for review.

(2) In reviewing an application for a CON, the Commission shall consider the applicant's submissions, the comments, if any, of interested parties, participating entities, the local health department, and information gathered during the Commission’s review of the application, to which each applicant and interested party has been afforded the opportunity to respond. In a comparative review the Commission shall award a CON to the applicant, or applicants, that best meet the review criteria in §G(3) of this regulation.

(3) Criteria for Review of an Application for Certificate of Need.

(a) State Health Plan. An application for a Certificate of Need shall be evaluated according to all relevant State Health Plan standards.

(b) Need. The Commission shall consider the applicable need analysis in the State Health Plan. If no State Health Plan need analysis is applicable, the Commission shall consider whether the applicant has demonstrated a need for the proposed project.

(c) Alternatives to the Project. The Commission shall consider the alternative approaches to meeting the need identified for the project that were considered by the applicant in planning the project and the basis for the applicant’s choice of the project among considered alternatives. In a comparative review of applications within the same review cycle, the Commission shall compare the costs and the likely effectiveness of alternative projects in meeting identified needs, improving the availability and accessibility of care, and improving the quality of care.

(d) Project Financial Feasibility and Facility or Program Viability. The Commission shall consider the availability of resources necessary to implement the project and the availability of revenue sources and demand for the proposed services adequate to ensure ongoing viability and sustainability of the facility to be established or modified or the service to be introduced or expanded.

(e) Compliance with Terms and Conditions of Previous Certificates of Need. An applicant shall demonstrate compliance with all terms and conditions of each previous CON granted to the applicant.

(f) Project Impact. The Commission shall consider the impact of the proposed project on the costs and charges of existing providers of the facilities and services included in the project and on access to those facilities and services in the service area of the project.

(g) Health Equity. The Commission shall consider how a proposed project will address health care disparities in availability, accessibility, and quality of care among different populations within the service area. The Commission shall consider how social determinants of health within the service area of the proposed project create disparities in the delivery of health care.

(h) Character and Competence. The Commission shall assess the character and competence of an applicant based upon experience and past performance, including any records of violation in operating a health care service or facility.

.09 Commission Decision and Action on CON Applications.

A. Proposed Decision.

(1) Preparation of Proposed Decision.

(a) In a comparative or contested review, or in a review in which an evidentiary hearing is held in accordance with Regulation .11 of this chapter, the Executive Director shall appoint a single Commissioner, who may be assisted by the staff of the Commission, to act as reviewer and prepare a proposed decision for consideration by the Commission.

(b) In all other reviews, Commission staff shall review the application and prepare a staff report and recommendation for consideration by the Commission.

(2) Project Status Conference.

(a) The reviewer or staff, as appropriate, may request that a project status conference be held before the issuance of a proposed decision or staff report, to apprise each applicant, interested party, and participating entity of those aspects of a proposed project that appear to be inconsistent with applicable standards and review criteria.

(b) Following the project status conference, the reviewer or staff will send each applicant, interested party, and participating entity a summary of the project status conference that includes dates, as needed, for additional filings.

(c) The applicant shall send to each interested party and participating entity a copy of proposed project changes made pursuant to the project status conference.

(d) Each interested party and participating entity in the review of an application shall have 7 days to file comments on the proposed changes made pursuant to the project status conference.

(3) Opportunity to Present Oral Argument. Each applicant and interested party in a contested or comparative review may request the opportunity to present oral argument to the reviewer before the reviewer prepares a proposed decision on the application for consideration by the full Commission, as follows:

(a) The request shall be made within the time period for an applicant's response to comments under Regulation .08F(1) of this chapter;

(b) The decision to grant oral argument is at the sole discretion of the reviewer;

(c) The reviewer may set reasonable time limits for oral argument; and

(d) The reviewer may, if there is a genuine dispute as to the credibility of a material witness on a matter of fact, require the witness to answer questions on that matter under oath during the oral argument portion of a CON review.

(4) A staff report and recommendation on a proposed project or a reviewer’s proposed decision on a project shall state the staff’s conclusion or the reviewer's finding as to whether:

(a) Each relevant State Health Plan standard or review criterion set forth in Regulation .08G of this chapter:

(i) Is met by the applicant;

(ii) Is not applicable to the project; or

(iii) Is applicable to the project and is not met by the applicant;

(b) In a comparative review, one or more of the projects is preferred under a State Health Plan standard or criterion either as a result of consideration of a preference standard or because one or more of the projects was determined to be superior based on the reviewer’s consideration of the applicable criteria; and

(c) To recommend that one or more of the projects be granted a CON.

B. Exceptions.

(1) Pursuant to State Government Article, §10-216, Annotated Code of Maryland, each applicant and interested party who has submitted comments under Regulation .08F(1) of this chapter may submit written exceptions to a staff report and recommendation or a proposed decision and make oral argument to the Commission.

(2) Schedule.

(a) A proposed decision in a contested or comparative review shall be issued at least 30 days before the Commission meeting at which the proposed decision and order will be considered.

(b) Upon issuance of a staff report or proposed decision, Commission staff shall issue a notice specifying the schedule for the submission of exceptions and any response, the date on which the Commission shall hear oral argument, and rules for conduct of the hearing.

(c) Unless otherwise agreed by each applicant and interested party, the schedule issued by Commission staff in a contested or comparative review shall specify that exceptions shall be filed at least 10 days after the issuance of a proposed decision and any response to the exceptions filed at least 7 days after the filing of exceptions. The Commission staff may shorten these periods by agreement of the parties, or extend any deadlines set for good cause shown.

(3) Exceptions Requirements.

(a) Exceptions shall specifically identify each finding and conclusion to which exception is taken, citing those portions of the record on which each exception is based.

(b) Exceptions shall be limited to 25 pages, double-spaced, excluding attachments.

(c) Responses to exceptions shall be limited to 15 pages, double-spaced, excluding attachments.

(4) Oral arguments before the full Commission concerning the proposed decision are limited to 10 minutes per applicant and 10 minutes per interested party, unless extended by the Chair of the Commission. An applicant may reserve time for rebuttal.

C. Participation By Participating Entity In Certain Reviews After Issuance of a Staff Report or Reviewer's Proposed Decision.

(1) Request by Participating Entity to Address the Commission.

(a) After the issuance of a staff report or a reviewer's proposed decision, a participating entity may request the opportunity to address the Commission before Commission action on the application by submitting a written request at least 7 days before the scheduled Commission meeting that will consider an application, specifying the points that it wants to make.

(b) The Chair of the Commission, after consultation with the Executive Director, may permit a participating entity, or combination of participating entities, to make an oral presentation to the Commission on matters it addressed in written comments on the application.

(c) At least 5 days before the scheduled Commission meeting that will consider an application, the Executive Director shall advise each applicant, interested party, and participating entity in a review whether the Chair will permit a participating entity or combination of participating entities to make an oral presentation to the Commission, and shall specify the format of the presentation.

(2) An applicant may address the Commission in any review in which a participating entity is granted permission to address the Commission before action on an application.

D. Final Decision.

(1) The Commission's final decision on a project shall contain findings of fact and conclusions of law and:

(a) Approve the application;

(b) Approve the application with conditions; or

(c) Deny the application.

(2) The decision of the Commission shall be by a majority of the quorum present and voting.

E. Action on the Application.

(1) The Commission shall act on an application for a CON not later than 150 days after the application has been docketed. If no evidentiary hearing is held, the Commission shall act on an application within 90 days after the docketing of the application. Staff shall report to the Commission the status of all projects where a staff report is not issued for Commission action within 90 days.

(2) With the exception of CON applications to establish a health care facility, relocate a health care facility, or establish cardiac surgery services or organ transplantation services at an existing acute general hospital, a CON application filed after October 1, 2019 shall be deemed approved if the application is uncontested and final action by the Commission does not occur within 120 days after the application is docketed.

(3) On motion by an applicant or an interested party, a review of a CON application may be stayed for a period not to exceed 6 months if the reviewer, or if a reviewer is not appointed, the Executive Director, determines that there is good cause for a stay.

(4) The Commission shall notify the applicant, interested parties, participating entities, and the local health department of the Commission’s final decision.

(5) The Commission may not render a final decision until:

(a) A staff report and recommendation or a reviewer’s proposed decision has been provided to each party; and

(b) Each applicant and interested party has been given an opportunity to file exceptions and present oral argument before the Commission.

F. Judicial Review.

(1) The Commission's final decision is subject to judicial review under State Government Article, Title 10, Subtitle 2, Annotated Code of Maryland.

(2) In order to seek judicial review, a party must be an aggrieved party.

(3) For purposes of judicial review, the record of the proceeding shall include:

(a) The application;

(b) Requests to an applicant for additional information from Commission staff, the reviewer, the Commission, and responses to the requests;

(c) Comments received from each interested party and responses from each applicant;

(d) Reports or recommendations from staff;

(e) Motions and responsive filings;

(f) The prehearing conference report, if any;

(g) Prefiled testimony, if any;

(h) A recording or transcript of any hearing;

(i) The reviewer's proposed decision, all exceptions, and responses to exceptions; and

(j) The Commission's final decision.

(4) A decision of the Commission is a final decision for purposes of judicial review.

(5) A request for reconsideration in accordance with Regulation .19 of this chapter will stay the final decision of the Commission for purposes of judicial review until the Commission decides the request for reconsideration.

.10 Miscellaneous Rules and Procedures.

A. Computation of Time.

(1) In computing a period of time prescribed by these regulations, by order of the Commission, or by an applicable statute, the day of the action or default initiating the designated period of time is not included. The last day of the period so computed is to be included unless it is a day on which the office of the Commission is closed, in which event the period extends until the next day on which the office of the Commission is open. Unless otherwise noted, all time periods shall be computed in calendar days.

(2) At the discretion of the reviewer, the Executive Director, or the Executive Director's designee, and upon a showing of good cause by the submitting party, a period of time to submit a document or perform any act permitted or prescribed by these regulations may be extended for a reasonable period of time.

B. Filing of Documents. In all matters before the full Commission, filings may not be made directly to individual commissioners except at the direction of the reviewer or the Executive Director.

C. Motion Practice.

(1) A motion shall be made in writing, except when made at a hearing or prehearing conference in accordance with Regulation .11 of this chapter, and shall state concisely the action the movant desires the Commission to take, and supporting grounds and authority.

(2) A motion shall be filed within 20 days of the determination to which the motion responds.

(3) The following actions shall be taken by motion:

(a) A demand for an action which the movant desires the Commission, the reviewer, or the staff of the Commission to take;

(b) A request for reconsideration, under Regulation .19 of this chapter;

(c) An objection to the introduction of a statement or other evidence by a party during an evidentiary hearing held under Regulation .11 of this chapter;

(d) A challenge to a reviewer or other member of the Commission;

(e) An action that might be initiated properly or undertaken by a party to a review, and that is not otherwise provided for in this chapter; and

(f) Any other question that is justiciable.

(4) A motion need not be verified unless it is based on facts not apparent from the record or documents filed in the proceeding.

(5) An applicant or interested party to the review may file one written answer to a motion, in the same format required of motions, within 10 days of the filing of the motion.

(6) Except as otherwise provided in these regulations, the reviewer or, in a matter in which no reviewer has been appointed, the Executive Director shall rule on a motion made prior to the issuance of a proposed decision or staff recommendation. Except as otherwise provided in these regulations, the Chair shall rule on all other motions.

(7) The person presiding over the motion may hear oral argument on the motion at the request of a party.

D. Summary Decision.

(1) At any time after an application is docketed, staff may file a motion for summary decision to deny the application.

(2) The motion shall identify the grounds for the motion, which is not required to address every applicable State Health Plan standard. The applicant may respond to the motion in writing, within 15 days of receipt of the motion.

(3) The reviewer, or, in a matter in which no reviewer has been appointed, a commissioner appointed as motions officer by the Executive Director, may hear oral argument on the motion at the request of a party and shall issue a proposed ruling which shall be subject to review by the full Commission.

(4) A quorum of the full Commission shall make a final ruling on the motion for summary decision.

E. Ex Parte Contacts. After the docketing of an application and until the Commission renders its final decision under this regulation, the ex parte provisions of the State Government Article, Title 10, Annotated Code of Maryland, apply.

F. Local Health Department Review and Comment. The Commission shall seek information and comment from each local health department in the health planning region for the proposed project, and shall consider any response from each health department in making a final decision on an application.

G. Required Approvals.

(1) Except in emergency circumstances posing a threat to public health, all decisions of the Commission on an application for a Certificate of Need shall be consistent with applicable State Health Plan standards and criteria established by the Commission.

(2) Unless the Commission finds that the facility or service for which a proposed expenditure is to be made is not needed or is not consistent with the State Health Plan, the Commission shall approve an application for a Certificate of Need to the extent that the expenditure will be made to eliminate or prevent an imminent safety hazard, as defined by federal, State, or local fire, building, or life safety codes or regulations, to comply with State licensing standards, or to comply with accreditation standards for reimbursement under Title XVIII of the Social Security Act or under the State Medical Assistance Program approved under Title XIX of the Social Security Act.

H. Notice of Final Action on a Certificate of Need Application. The Commission shall provide a copy of a CON decision to State or local licensing agencies, the Maryland Medical Assistance Program, and the Health Services Cost Review Commission.

I. Participation of Staff. A reviewer may seek the assistance of any member of the Commission staff in preparing a proposed decision.

J. Transferability. A Certificate of Need or other Commission approval is not transferable.

K. Consent Agenda.

(1) The Commission may take action on the following categories of items by use of a consent agenda at a public meeting of the Commission:

(a) Adoption of final regulations previously adopted by the Commission as proposed permanent regulations that:

(i) Do not result in public comments after publication in the Maryland Register; and

(ii) Contain no wording changes.

(b) A change in an approved project that requires Commission approval pursuant to Regulation .17 of this chapter and is recommended for approval by the Executive Director with the exception of:

(i) An increase in the capital cost of a project that exceeds the approved capital cost inflated by the cost index specified in Regulation .17 of this chapter that also includes a change in the financing mechanism of the project; or

(ii) A change in the financing mechanism of the project.

(c) Confirmation of an emergency CON issued by the Executive Director in accordance with Regulation .20 of this chapter.

(d) Other categories of actions that a majority of the fully authorized membership of the Commission votes to include on the consent docket.

(2) Consent agenda items shall be disseminated to the Commissioners prior to the meeting along with copies of any related materials. At the beginning of the meeting, the Chair of the Commission will present the consent agenda to the Commissioners and ask whether anyone wishes to remove an item from the consent agenda to the main agenda or the next scheduled meeting. Items may be removed from the consent agenda on the request of any one Commissioner. Items not removed may be adopted by general consent without debate. Removed items may be taken up either immediately after the consent agenda, placed later on the agenda, or moved to the meeting that follows at the discretion of the Chair.

.11 Evidentiary Hearings.

A. Request for Evidentiary Hearing.

(1) Except as otherwise provided in these regulations, a request for an evidentiary hearing shall be made within 45 days of the docketing of an application or within 30 days after the modification of an application in a review.

(2) At the request of an applicant or interested party, the Commission may hold an evidentiary hearing in the review of a CON application for any health care facility other than an ambulatory surgical facility if, in the judgment of the reviewer, an evidentiary hearing is appropriate due to the magnitude of the impact that the proposed project may have on the health care delivery system and the project, if approved, would result in one of the following:

(a) A substantial negative impact on the costs and charges for the type of the facility, services, or both included in the project;

(b) A substantial negative impact on access to those facilities and services by the population in the proposed project’s expected service area;

(c) A significant decrease in the availability and overall quality of health care services in the affected area in a manner not consistent with policies or need projections set forth in the State Health Plan, such as by causing a loss of reasonable access to an essential medical service by a substantial number of patients; or

(d) Any impact that the reviewer concludes may be sufficiently serious to merit an evidentiary hearing.

B. General.

(1) Reviewer as Presiding Officer.

(a) If an evidentiary hearing is held in accordance with this chapter, the reviewer shall:

(i) Conduct a full, fair, and impartial hearing;

(ii) Take action to avoid unnecessary delay in the disposition of the proceedings; and

(iii) Maintain order.

(b) A reviewer has the power to regulate the course of an evidentiary hearing and the conduct of the parties and authorized representatives, including the power to:

(i) Administer oaths and affirmations;

(ii) Rule upon offers of proof and receive relevant and material evidence;

(iii) Consider and rule upon motions in accordance with this chapter;

(iv) Examine witnesses and call witnesses as necessary to ensure a full and complete record;

(v) Limit unduly repetitious testimony and reasonably limit the time for presentations;

(vi) Grant a continuance or postponement;

(vii) Modify or waive, reasonably and for good cause, any time periods established by this chapter;

(viii) Request that parties submit legal memoranda, proposed findings of fact, and proposed conclusions of law;

(ix) Make proposed decisions and take any other appropriate action authorized by law;

(x) Issue orders as are necessary to secure procedural simplicity and administrative fairness and to eliminate unjustifiable expense and delay; and

(xi) Conduct the hearing in a manner suited to ascertain the facts and safeguard the rights of the parties to the hearing.

(c) The reviewer may impose appropriate sanctions for failure to abide by this chapter or any lawful order of the reviewer.

(2) Conduct of Evidentiary Hearings.

(a) An evidentiary hearing need not be conducted according to technical rules of evidence, but shall be conducted in accordance with the State Government Article, Title 10, Subtitle 2, Annotated Code of Maryland, and these regulations.

(b) Reliable hearsay is admissible.

(c) Rules of privileges are effective to the extent they would be effective in a judicial proceeding in Maryland.

(d) Nonexpert opinion testimony may be considered.

(e) Qualification as an expert lies within the discretion of the reviewer. The qualification of an expert need not be based on academic degrees. Reasonably extensive practical experience with the subject may be sufficient for an expert qualification.

(f) Reliable and probative documents previously filed with or compiled by the Commission or its staff or consultants that are relevant to issues being considered by the Commission may be incorporated by reference into the record of a proceeding by the Commission or, by leave of the reviewer, by a party to the proceeding, upon notice to the parties and an opportunity to object.

(g) The reviewer may take administrative notice of all judicially cognizable facts to the same extent as courts of this State, either on the reviewer's own motion or at the request of a party. The reviewer may also take official notice, without meeting formal evidentiary rules, of general technical or scientific facts within the specialized knowledge of a member of the Commission. A party to the hearing is entitled, on timely request, to an opportunity to show that the Commission should not take administrative or official notice of specific facts and matters, or that the fact or matter to be officially noticed is inapplicable to the proceeding or is incorrect or misunderstood by the Commission.

(3) A party to the hearing may be represented by counsel.

(4) The prehearing conference and the hearing shall be recorded. If an applicant or other person desires a transcript, that person shall pay all costs to transcribe the recording.

(5) Documents filed in the proceeding shall be served on the reviewer, the assistant attorneys general of the Commission, and each interested party, and shall include a certificate of service.

C. Prehearing Procedures.

(1) The reviewer shall hold a prehearing conference, and may hold settlement conferences, before an evidentiary hearing.

(2) The reviewer shall notify each applicant and interested party of the prehearing conference in writing. The notification shall:

(a) Include the date, time, and place of the prehearing conference or conferences;

(b) Summarize the rules of procedure governing the evidentiary hearing; and

(c) State the dates, if known, for the submission of prefiled testimony and the date, time, and place of the evidentiary hearing.

(3) The principal purpose of the prehearing conference is to expedite the evidentiary hearing. To this end the reviewer may, among other things:

(a) Instruct the parties to:

(i) Formulate and submit a list of genuine contested issues to be decided at the hearing;

(ii) Identify each potential witness, the subject matter of each witness's testimony, and documents to be introduced; and

(iii) Raise and address issues that can be decided before the hearing;

(b) Encourage stipulations as to facts, law, and other matters;

(c) Schedule dates for the submission of prefiled testimony, further prehearings, the hearing, and submission of briefs and documents; and

(d) Rule on any pending motions.

(4) A written summary of the prehearing conference shall be made a part of the record of the proceeding.

(5) The reviewer may record the prehearing conference or have a stenographer present.

(6) A request for the postponement of a hearing shall be made at a reasonable time before the hearing and may be granted only for good cause shown, at the discretion of the reviewer.

D. List of Genuine Issues.

(1) The reviewer shall establish a list of genuine issues of material fact for the evidentiary hearing.

(2) An evidentiary hearing shall be held only on those genuine factual issues or issues on which the reviewer determines that testimony would be useful in rendering a decision.

E. Written Direct Testimony.

(1) Direct testimony shall be in writing and may not be delivered orally.

(2) A party who wishes to present testimony at the evidentiary hearing shall file written testimony before the hearing in accordance with the schedule set by the reviewer.

(3) The written direct testimony shall set forth the conclusions of the person submitting it and all arguments and facts supporting these conclusions.

(4) Written direct testimony shall be verified either under oath at the hearing or by including the statement specified in Regulation .08B(2) of this chapter.

(5) Upon notice with an opportunity to object, the reviewer shall separate irrelevant material from the remainder of the record and keep that material apart. Parts of the body of the written direct testimony judged irrelevant by the reviewer shall be so marked and may not be considered by the Commission in its deliberations.

(6) Persons submitting written testimony shall make themselves available for oral cross-examination. Submitted application materials are also subject to cross-examination. Letters submitted into the record which are not considered written testimony are not subject to cross-examination.

F. Cross-Examination.

(1) Cross-examination of each witness shall be live and under oath.

(2) The reviewer and each non-proponent applicant and interested party may conduct reasonable cross-examination of a witness who gave direct or rebuttal testimony.

(3) The reviewer may set reasonable time limits on the cross-examination of witnesses.

G. Rebuttal Testimony.

(1) Rebuttal testimony is permitted on any issue specified by the reviewer.

(2) Rebuttal testimony, whether specified by the reviewer to be written or oral, is subject to live cross-examination.

H. Post-Hearing Briefs. The reviewer may request post-hearing briefs.

I. Informal Proceedings. At the request of an applicant, and if each interested party waives the right to present evidence, argument, and conduct cross-examination, the reviewer may establish informal rules for mediation, structured negotiation, or another consensual procedure for reaching a decision.

.12 Holder Responsibilities and Withdrawal of a Certificate of Need or Other Commission Approval.

A. Project Implementation Schedule.

(1) An application for a CON or other Commission approval shall propose a schedule for implementation of the project that specifies the estimated time for, at a minimum, the following project implementation steps:

(a) The time required to enter a binding obligation following Commission approval of the application for the project;

(b) The time required to initiate construction, renovation, or both following execution of a binding obligation;

(c) The time required to complete the approved construction, renovation, or both following initiation of construction, renovation, or both; and

(d) The time required to place the new facility or modified facility in operation following the completion of approved construction, renovation, or both.

(2) The proposed project implementation schedule for a project requiring a multiphased plan for implementation shall detail those multiple phases and specify the estimated time requirements for, at a minimum, the four time periods listed above for each phase.

(3) A holder shall abide by the project implementation schedule submitted with its application for a CON or other Commission Approval.

(4) The project implementation schedule may be reasonably modified by the holder during the period during which the project is being implemented with approval of Commission staff.

B. Progress Report.

(1) Up until an approved project’s completion, licensure, if required, and first use, a holder shall submit a semiannual progress report in the form and manner prescribed by Commission staff.

(2) The semiannual progress report shall detail the holder’s compliance with the project implementation schedule and any conditions on approval imposed by the Commission.

(3) A holder shall submit the semiannual progress reports in accordance with the following schedule:

(a) The first report shall be due at least 45 days before the 6-month anniversary of the final action awarding the CON or other Commission approval; and

(b) Subsequent progress reports shall be due every 6 months after the due date of the prior report.

C. Obligation.

(1) Except as provided by §C(2) of this regulation, a holder shall obligate at least 51 percent of the approved capital expenditure for a project involving building construction, renovation, or both, as documented by a binding construction contract or equipment purchase order, within the following specified time periods:

(a) An approved new hospital has up to 36 months to document the required obligation;

(b) A project involving an approved new non-hospital health care facility or involving a building addition or replacement of building space of a health care facility has up to 24 months to document the required obligation;

(c) A project limited to renovation of existing building space of a health care facility has up to 18 months to document the required obligation; and

(d) A project that does not involve construction or renovation shall document that the approved project is complete and operational within 18 months of project approval.

(2) In a multiphased plan of construction with more than one construction contract approved for an existing health care facility, a holder has:

(a) Up to 12 months after approval to obligate 51 percent of the capital expenditure for the first phase of construction; and

(b) Up to 12 months after completion of the immediately preceding phase of construction to obligate 51 percent of the capital expenditure for any subsequent approved phase of construction.

D. Effective Date of a CON or other Commission approval. The effective date of a CON or other approval is the date of Commission action approving the application for the project. If a request for reconsideration is timely filed under Regulation .19 of this chapter, the effective date of the approval is the date the Commission rules on the request. The filing of a notice of appeal does not stay enforcement of the Commission decision.

E. Grounds for Withdrawal of Commission Approval. The Commission may withdraw a CON or other Commission approval if it finds that:

(1) The holder made a material misrepresentation upon which the Commission relied in approving the application;

(2) The holder failed to demonstrate sufficient progress in implementing the project;

(3) The holder has failed to obligate or complete an approved project as required by §A of this regulation;

(4) The holder failed to meet a condition on the approval;

(5) The holder failed to timely provide the semiannual progress report required under §B of this regulation; or

(6) The project differs materially from that approved by the Commission.

F. Notice Before Withdrawal of a CON or Other Commission Approval.

(1) If Commission staff determines that a CON or other Commission approval should be withdrawn, Commission staff shall inform the holder and each appropriate local health department, setting forth in writing the reasons for the proposed withdrawal.

(2) This notice shall set forth the right of the holder to submit written argument in support of its position and present oral argument to the Commission, as well as the right to an evidentiary hearing conducted in accordance with Regulation .11 of this chapter, to show cause why the approval should not be withdrawn.

(3) A holder that has failed to demonstrate sufficient progress in project implementation shall show good cause for the lack of progress.

G. Final action by the Commission withdrawing a CON or other approval shall:

(1) Be in writing;

(2) Include findings of fact and conclusions of law; and

(3) Be transmitted to the holder and to each appropriate local health department within 30 days of the date of action by the Commission.

H. CON Application after Withdrawal of a Prior CON. If a CON or other approval is withdrawn due to lack of sufficient progress in implementing the project, the holder may file an application seeking Commission approval to initiate or complete the previously authorized project, which shall be considered a new application by the Commission.

.13 Procedures for Certificate of Conformance and Certificate of Ongoing Performance Applications.

A. Coverage.

(1) A certificate of conformance is required to introduce primary or elective percutaneous coronary intervention services at a hospital.

(2) A certificate of ongoing performance is required and shall be periodically renewed to certify that a hospital providing cardiac surgery services or percutaneous coronary intervention services is maintaining an acceptable level of quality and performance in its provision of those services.

(3) A hospital with newly established cardiac surgery services or percutaneous coronary intervention services at an acute general hospital may continue to provide services without a certificate of ongoing performance until the Commission acts on the hospital’s first application for a certificate of ongoing performance.

B. Submission of Applications.

(1) An application for a certificate of conformance or a certificate of ongoing performance shall be submitted to the Commission in a form and manner prescribed by the Commission.

(2) An application shall be submitted in accordance with a published review schedule established by the Commission under §E of this regulation, except that applications to establish both primary and elective percutaneous coronary intervention services based on insufficient access under COMAR 10.24.17.04A(2)(b) may be filed at any time.

(3) The application, and all information supplementing the application, shall be signed by at least one principal of the applicant, who shall sign a statement as follows: “I solemnly affirm under penalties of perjury that the contents of this application are true to the best of my knowledge, information, and belief.”

C. Completeness Review of Certificate of Conformance Applications.

(1) Commission staff shall review a certificate of conformance application for completeness within 15 business days.

(2) If staff determines the application is not complete, staff may request additional information to make the application complete within the 15-business-day period to review the application. The applicant shall provide full and clear responses to the completeness and additional information request within 15 business days unless an extension is requested and granted.

(3) If Commission staff determines after review of the application and information provided in response to staff’s request that the application is complete, staff shall notify the applicant of its determination.

(4) If an applicant fails to supply requested information within the specified time limit, staff may dismiss and return the application.

D. Additional Information. Commission staff may:

(1) Request information from an applicant supplementing an application at any time during the review of an application, provided that such additional information is material to the determination of whether the applicant has satisfied the criteria and standards for approval; and

(2) Set reasonable time limits for the applicant to supply the requested information.

E. Notice to the Public.

(1) At least once each year, the Commission staff shall publish in the Maryland Register a schedule for reviews of:

(a) Certificate of conformance applications to establish primary or elective percutaneous coronary intervention services; and

(b) Certificate of ongoing performance applications if at least one hospital is required to file an application in the time period covered by the schedule.

(2) The Commission shall publish, on its website, information on the receipt of applications for certificates of conformance and certificates of ongoing performance.

F. The Commission shall act on an application for a certificate of conformance not later than 120 days after staff notified the applicant that the application is complete, except for applications reviewed in conjunction with a CON application in accordance with COMAR 10.24.17.04C.

G. Criteria for Review of Applications. Applicable criteria and standards for certificate of conformance reviews and certificate of ongoing performance reviews are specified in COMAR 10.24.17, the State Health Plan chapter for cardiac surgery and percutaneous coronary intervention services.

H. Staff Report and Recommendation. Commission staff shall review a certificate of conformance and certificate of ongoing performance applications and prepare a staff report and recommendation that contains the staff’s conclusion as to whether the applicant has met each applicable criterion and standard in COMAR 10.24.17.

I. Exceptions.

(1) An applicant may submit exceptions to a staff report and recommendation and present oral argument on its exceptions to the Commission.

(2) Schedule.

(a) Staff’s issuance of a staff report and recommendation shall be accompanied by a notice that specifies the schedule for the submission of exceptions and the date of the Commission meeting at which the Commission shall hear oral argument on exceptions.

(b) Unless otherwise agreed by each applicant and interested party, the schedule issued by Commission staff shall specify that:

(i) A party filing exceptions has at least 10 days to file exceptions; and

(ii) A party filing a response to exceptions has at least 7 days to file a response.

(c) The Commission staff may shorten these periods by agreement of the parties, or extend any deadlines set for good cause shown.

(3) Exceptions shall specifically identify each staff conclusion to which exception is taken, citing those portions of the record on which each exception is based.

(4) Exceptions and any response to exceptions shall be limited to 25 pages, double-spaced, excluding attachments.

(5) Commission staff may file a written response to exceptions and present oral argument at the exceptions hearing.

(6) Oral arguments on exceptions to the staff report and recommendation and any response shall be limited to 10 minutes per argument unless extended by the Chair of the Commission.

J. Final Decision on an Application for Certificate of Conformance.

(1) A final decision on an application for a certificate of conformance shall contain findings of fact and conclusions of law and shall:

(a) Approve the application;

(b) Approve the application with conditions; or

(c) Deny the application.

(2) A certificate of conformance issued by the Commission for an approved application shall specify the period of time for which the initial certificate is effective and the expected date by which the hospital is expected to seek a certificate of ongoing performance for its primary or elective percutaneous coronary intervention services or both.

K. Final Decision on an Application for Certificate of Ongoing Performance.

(1) The Commission's final decision on an application for a certificate of ongoing performance shall contain findings of fact and conclusions of law and shall:

(a) Approve the application;

(b) Approve the application with conditions; or

(c) Deny the application or revoke the Commission’s approval for the involved services provided that all the steps in COMAR 10.24.17 including performance of a focused review and an opportunity for agreement upon and completion of a plan of correction have been provided to the hospital.

(2) A certificate of ongoing performance issued by the Commission shall specify the period of time for which the certificate is effective and the expected date by which the hospital is expected to seek a new certificate of ongoing performance for its primary or elective percutaneous coronary intervention services or both, as applicable, or for its cardiac surgery services.

(3) The duration of a certificate of ongoing performance may be extended beyond the renewal deadline, if due to extenuating circumstances, the Executive Director determines an extension is necessary and appropriate, prior to staff producing a written report and recommendation to the Commission regarding the hospital’s application for renewal of its certificate of ongoing performance.

L. The decision of the Commission shall be by a majority of the quorum present and voting.

M. The decision of the Commission is subject to judicial review in accordance with Regulation .09F of this chapter.

.14 Special Procedures.

A. Determination of Coverage. Except as otherwise provided in Regulations .03 or .05 of this chapter, a project that requires a determination of coverage shall be dealt with in the following manner:

(1) A written request for determination of coverage shall be filed with the Center for Health Care Facilities Planning and Development.

(2) The Executive Director of the Commission shall review the request and act on it within 30 business days of receipt of complete information.

(3) The person requesting the determination shall provide all additional information requested by Commission staff.

(4) The Commission shall notify the person, each appropriate local health department, and each agency responsible under the Department's licensure program for the type of project whether it requires a Certificate of Need or other Commission review.

(5) Commission staff’s determination of coverage may be appealed by the requesting party to the Commission by use of a motion filed in accordance with Regulation .10C of this chapter.

(6) The Executive Director may issue a determination that:

(a) Certificate of Need or other Commission review is not required; or

(b) Certificate of Need review is required for stated reasons.

B. Declaratory Rulings.

(1) A person uncertain as to how a statute or regulation enforced by the Commission applies to that person or that person’s property may file with the Commission a petition for a declaratory ruling in accordance with the procedures in §B of this regulation.

(2) The Commission may decline to issue a declaratory ruling for any of the following reasons:

(a) The petition is not in accordance with this section;

(b) The petition contains insufficient factual or legal information upon which to base a declaratory ruling;

(c) The petition raises issues adequately addressed in a final decision or regulation of the Commission;

(d) The petition fails to pose a significant issue;

(e) The petition is properly heard as part of an evidentiary hearing; or

(f) A declaratory ruling would not be in the public interest.

(3) Within 15 days of receipt of a petition, the Executive Director shall either assign the petition to the full Commission for a decision or appoint a Commissioner to make a proposed ruling on the petition, which ruling shall be considered by the full Commission.

(4) Within 45 days, or by the second regularly scheduled Commission meeting following the filing of the petition, whichever is later, the Commission shall rule or decline to rule on the petition, or may postpone issuing a formal written declaratory ruling for up to 35 days.

(5) To secure a declaratory ruling, an affected person shall submit a petition for a declaratory ruling that contains the following information:

(a) The petitioner's name, address, and telephone number;

(b) A one or two sentence statement of each question on which a ruling is requested;

(c) A one or two sentence summary of the petitioner's position on each question;

(d) Citation to each provision that the Commission needs to interpret in order to answer each question posed;

(e) A brief statement of each relevant fact;

(f) The petitioner's factual, legal, and policy arguments, referring to documents, affidavits, data, and other relevant information, which shall be appended to the petition, unless the documents are readily accessible to the Commission; and

(g) A statement by the petitioner under penalties of perjury that each fact recited as relevant to the question posed is true to the best of the petitioner's knowledge, information, and belief.

(6) The Commission shall promptly publish notice of the receipt of a petition in the Maryland Register and shall note the petition on meeting agendas until the Commission acts upon the petition.

(7) The Commissioner making a proposed ruling or the Commission, in addition to considering the materials submitted by the petitioner and comments from staff, may:

(a) Request and receive oral or written statements from any person;

(b) Consider any document, data, study, or other relevant material; or

(c) Require argument on the question on the record, giving the petitioner the opportunity to present argument and to proffer witnesses and documents for the Commission's consideration.

(8) The proposed and final declaratory ruling shall be in writing, and state:

(a) Each question addressed;

(b) The proposed or final ruling; and

(c) The factual and legal basis for the ruling.

(9) A final declaratory ruling binds the Commission and the petitioner on the facts set forth in the petition, except when this binding effect violates the due process rights of a competing applicant in a comparative review.

(10) The Commission may revoke, alter, or amend a proposed or final declaratory ruling, which may have prospective effect only.

(11) A petitioner may appeal the declaratory ruling as set forth in State Government Article, Title 10, Annotated Code of Maryland.

.15 Commission Approval Required Before Certain Actions.

A. Obligation of Capital Expenditure.

(1) A person may not incur an obligation for a capital expenditure for a project that is subject to review under these regulations until the applicant receives a CON or other required Commission approval.

(2) An obligation for capital expenditure is incurred by or on behalf of a health care facility:

(a) When a contract, enforceable under State law, is entered into by or on behalf of the health care facility for the construction, acquisition, lease, or financing of a capital asset;

(b) When a governing body of the health care facility takes formal action to commit its own funds for a construction project undertaken by the health care facility as its own contractor; or

(c) In the case of donated property, on the date on which the gift is completed under applicable State law.

B. Obligation of Predevelopment Expenditures. An applicant proposing predevelopment expenditures requiring review under this chapter may not enter into a binding contract or other obligation for such activities until the applicant receives a CON or other required Commission approval.

C. Binding Commitments for Financing. A binding arrangement or commitment for financing a project may not be entered into by an applicant until the applicant receives a CON or other required Commission approval for the project.

.16 Voluntary Withdrawal of an Application.

An applicant may voluntarily withdraw its application without prejudice prior to final action by the Commission on the application. Written notice of the withdrawal shall be submitted to the Commission through the Executive Director. A withdrawn application may be resubmitted at a later date as a new application.

.17 Project Changes After Commission Approval.

A. Filing of Request. A holder that desires to change a project that has received CON or other Commission approval shall submit a request for the proposed change and supporting documentation to the Commission, copying each local health department within the health planning region of the project and, in the case of a change in the location or address of a project involving construction of a new health care facility, to all health care facilities of that type located in the health planning region.

B. Commission Approval Required Before Project Changes. Any of the following proposed changes that would place the project at variance with its CON or other approval issued under this chapter, including any condition placed on the approval, shall be reviewed by the Commission:

(1) A significant change in physical plant design;

(2) A capital cost increase that exceeds the approved capital cost inflated by an amount determined by applying the Hospital Capital Market Baskets published by IHS Markit in Health Care Cost Review or other guidance approved by the Commission and posted on the Commission website from the application submission date to the date of the filing of a request for a project change;

(3) A change in the financing mechanisms of the project; or

(4) A change in the location of the project.

C. Impermissible Changes. The following proposed changes to an approved project require a new CON or other appropriate review and may not be considered by the Commission:

(1) Changes in the fundamental nature of a facility or the services to be provided in the facility from those that were approved by the Commission;

(2) Increases in the facility’s total bed capacity or operating room inventory; or

(3) Changes in the medical service provided or approved.

D. Commission Action.

(1) Requested changes subject to review under §B of this regulation shall be reviewed by the Commission.

(2) Within 5 days after the Commission’s receipt of a written request to change the address or location of an approved project, Commission staff shall arrange to publish notice of receipt of the change request in the Maryland Register and one newspaper of general circulation in the appropriate health planning region, shall post the notice on its website, and shall provide written notice of receipt of the change request to:

(a) Each member of the General Assembly in whose district the relocation is planned;

(b) Each member of the governing body for the jurisdiction in which the relocation is planned; and

(c) The county executive, mayor, or chief executive officer, if any, in whose county or city the relocation is planned.

(3) The Commission shall provide a written notification within 45 days of the Commission’s receipt of a complete change request that:

(a) The proposed change is approved in whole or part and incorporated into a modified CON or other modified approval for the project with conditions as appropriate; or

(b) The proposed change is denied, with explanation.

.18 Review Required Before Licensing or First Use of Project.

A. Request for First Use Review and Approval. Not fewer than 60 days but not more than 120 days before the first use of any portion of a facility or service developed under a CON or other Commission approval, the holder shall specify the anticipated date for first use and request in writing, through the Center for Health Care Facilities Planning and Development, a final review and first use approval. The request shall include:

(1) Documentation of the final cost of the project; and

(2) A description of any differences in physical plant design, space, or services in the finished project when compared with the description of the project reviewed and approved by the Commission.

B. Action on Request. Within 30 days of receipt of all required information, Commission staff shall issue an approval for first use or a finding that the project does not conform to its CON or other Commission approval. Issuance of first use approval is not a new final decision concerning a CON and may not be appealed.

C. Nonconformance with CON or Other Commission Approval. If the Executive Director finds that a project does not conform to its CON or other approval, the applicant may not proceed to licensure or first use until the Executive Director issues a written finding that the project conforms with its approval. Based on a finding that a project varies significantly from the project that was granted a CON or other approval, the Executive Director may invoke the full review process established in Regulation .04, Regulations .08—.10, and Regulation .13 of this chapter in order to reexamine the project.

D. Duration of First Use Approval. First use approval remains in effect for 90 days. If a project is not put into use within that 90-day period, the holder shall reapply for first use approval.

.19 Reconsideration Procedures.

A. Request for Reconsideration. An aggrieved party may request that the Commission conduct a hearing to reconsider a Commission final decision to grant, to grant with conditions, or to deny a Certificate of Need application, a request for an exemption from CON review, or a certificate of conformance application issued under this chapter. This request shall be in writing and filed with the Center for Health Care Facilities Planning and Development within 15 days of the date upon which the Commission renders its decision and shall show good cause for reconsideration of the decision.

B. Good Cause. For purposes of this regulation, a request for a reconsideration shows good cause if it:

(1) Presents significant, relevant information which was not previously presented to the Commission and which, with reasonable diligence, could not have been presented before the Commission made its decision;

(2) Demonstrates that there have been significant changes in factors or circumstances relied upon by the Commission in reaching its decision; or

(3) Demonstrates that the Commission has materially failed to follow its adopted procedures in reaching its decision.

C. Notice of Reconsideration Request. At least 15 days prior to the date the Commission will consider a request for reconsideration, the Commission shall provide written notice of the date to the person making the request, each applicant, each interested party, and each relevant local health department. Each interested party may file a written response.

D. A request to present oral arguments shall be made at the time of filing an initial request for reconsideration or a response.

E. If the Commission determines that good cause has been demonstrated, the Commission may reverse or modify its previous decision. Within 30 days, the Commission shall issue a new decision containing written findings of fact and conclusions of law stating the basis for its decision, which shall be its final decision for the purpose of judicial review.

.20 Emergency Certificate of Need.

A. The Executive Director may issue an emergency Certificate of Need under the following circumstances that would otherwise require issuance of a CON:

(1) A situation presents hazards to employees or patients of a health care facility, and the project required to address the situation would otherwise require CON review;

(2) The closing of a health care facility by State licensing authorities requires changes or adjustments in other facilities to accommodate displaced patients, and the changes or adjustments would otherwise require that these facilities obtain a CON under these regulations; or

(3) A project that would require CON review is necessary to address a public health emergency and cannot be delayed.

B. Procedure for an Emergency Certificate of Need.

(1) A health care facility may apply for an emergency CON by sending a signed letter in PDF format by email and hard copy to the Executive Director that contains:

(a) A description of the project for which an emergency CON is sought;

(b) An explanation of the need for emergency action;

(c) The location and current use of the space where the proposed project will be implemented;

(d) The time frame by which the project can be implemented;

(e) Approximate cost, if known; and

(f) Status of existing unused physical bed space at the health care facility that could quickly be converted to inpatient or resident care to address the emergency.

(2) The applicant shall timely provide additional information requested by Commission staff.

C. Commission Action.

(1) The Executive Director may grant or deny an emergency CON application after consultation with the Chair of the Commission and receipt of suitably detailed information from the applicable State licensing agency regarding the need for emergency action. If, upon receipt of this information, the Executive Director agrees that the project is needed to address an emergency situation, the Executive Director shall issue an emergency Certificate of Need. The issuance of an emergency CON shall be on the agenda of the next scheduled Commission meeting for confirmation by the Commission.

(2) The Executive Director may exercise the discretion not to make a decision on an emergency CON application and refer the application for consideration by the Commission. If a quorum of the Commission agrees that the project is needed to address an emergency situation, the Commission shall issue an emergency Certificate of Need.

D. Duration of Emergency Certificate of Need. The emergency CON is temporary and is valid for a period not to exceed 165 days. The duration of an emergency CON may be extended by the Executive Director for good cause shown by the applicant or at the request of the Secretary.

E. A health care facility that desires to retain the capacity or project approved in an emergency CON shall, at least 30 days before the termination of the emergency CON, file a letter of intent followed by a CON application in accordance with the provisions in Regulation .08 of this chapter for an unscheduled review. The normal review process and time period set forth in this chapter apply to the review of a CON application filed after issuance of an emergency CON. This filing deadline may be extended by the Executive Director. The duration of an emergency CON shall be extended automatically during any period of time when the applicant has properly and timely sought a CON to retain the capacity or project approved on an emergency basis.

F. Review of Denied Application. In the event the Executive Director denies an application for an emergency CON, the applicant may submit a written request for Commission review of the decision within 15 days of the denial, stating with particularity the grounds and factual basis for the applicant’s disagreement with the Executive Director’s decision. The Commission shall make a decision on the request for review within 45 days of the request.

.21 Severability.

If any provision of this chapter is declared void by a court of law, the remainder of this chapter shall be unaffected and of continued force and effect.

.22 Effective Date.

A. A letter of intent or application submitted after the effective date of these regulations is subject to their provisions.

B. A request for a determination of coverage under Regulation .14A of this chapter, submitted after the effective date of these regulations, is subject to the provisions of this chapter.

C. Upon request by a holder, a project that has previously received a Certificate of Need or other Commission approval may be governed by this chapter.

D. Pending Reviews.

(1) Except in contested or comparative CON reviews, an application for a CON or other Commission approval pending at the time these regulations become effective shall be subject to their provision upon request of the applicant.

(2) Upon request of an applicant for a CON in a contested or comparative review, an application pending at the time these regulations become effective may be subject to their provisions with the consent of all interested parties and upon a finding of good cause by the reviewer.

(3) If the applicable CON review criteria have materially changed as a result of these regulations, the application of these regulations to a pending CON application shall be deemed a modification and governed by Regulation .08E of this chapter.

RANDOLPH S. SERGENT
Chair
Maryland Health Care Commission

Subtitle 67 MARYLAND HEALTHCHOICE PROGRAM

10.67.08 Maryland Medicaid Managed Care Program: Non-Capitated Covered Services

Authority: Health-General Article, §§2-104(b), 15-103, and 15-105, Annotated Code of Maryland

Notice of Proposed Action

[23-120-P]

The Secretary of Health proposes to amend Regulation .02 under COMAR 10.67.08 Maryland Medicaid Managed Care Program: Non-Capitated Covered Services.

Statement of Purpose

The purpose of the proposed action is to:

(1) Update the list of behavioral health diagnosis codes to reflect the addition of new International Classification of Diseases, 10th Revision (ICD-10) diagnosis codes;

(2) Remove the mental health and substance use disorder diagnosis code tables for dates of service before October 1, 2015;

(3) Update the current revenue codes included in the behavioral health carve out;

(4) Carve out the new peer recovery support services and behavioral health crisis services; and

(5) Correct COMAR references.

Estimate of Economic Impact

The proposed action has no economic impact.

Economic Impact on Small Businesses

The proposed action has minimal or no economic impact on small businesses.

Impact on Individuals with Disabilities

The proposed action has no impact on individuals with disabilities.

Opportunity for Public Comment

Comments may be sent to Jourdan Green, Director, Office of Regulation and Policy Coordination, Maryland Department of Health, 201 West Preston Street, Room 512, Baltimore, MD 21201, or call 410-767-6499 (TTY 800-735-2258), or email to mdh.regs@maryland.gov. Comments will be accepted through August 14, 2023. A public hearing has not been scheduled.

.02 Behavioral Health Non-Capitated Covered Services.

A. An MCO is not responsible for reimbursing for the following substance use disorder services, regardless of diagnosis:

(1) Services delivered by a community-based provider as described in COMAR 10.09.80 with the following procedure codes:

H0001—H0020	(text unchanged)
H0024	Group peer recovery support services
H0038	Individual peer recovery support services
H0047—Q9992	(text unchanged)

(2) (text unchanged)

B.—C. (text unchanged)

D. An MCO is not responsible for reimbursing for the following substance use disorder services if the MCO is billed with a primary diagnosis listed in [§K] §M of this regulation:

(1) Services delivered by an inpatient hospital with the following revenue codes:

0114—0156	(text unchanged)
0169	Administrative Days
0762	(text unchanged)

(2)—(3) (text unchanged)

E. An MCO is not responsible for reimbursing for mental health services with a primary diagnosis listed in [§M] §N of this regulation when the services are provided by a hospital and the services are the result of the treatment of mental health diagnosis.

F.—G. (text unchanged)

H. An MCO is not responsible for reimbursing the behavioral poisoning diagnoses listed in [§O] §P of this regulation in an emergency department setting.

I. An MCO is not responsible for services billed by specialty mental health providers listed in COMAR 10.09.59 when the bill includes the specialty behavioral health diagnoses listed in [§L or M] §M or N in the primary diagnosis field.

J. An MCO is not responsible for reimbursement of behavioral health crisis services as described in COMAR 10.09.16.

[J.] K.—[K.] L. (text unchanged)

[L.] M. Table of substance use disorder diagnoses, for dates of service on or after October 1, 2015:

[(1)] (table proposed for repeal)

[(2) For dates of service on or after October 1, 2015:]

F1010—F1029	(text unchanged)
F1090	Alcohol use, unspecified, uncomplicated
F1091	Alcohol use, unspecified, in remission
F10920—F1190	(text unchanged)
F1191	Opioid use, unspecified, in remission
F11920—F1290	(text unchanged)
F1291	Cannabis use, unspecified, in remission
F12920—F1390	(text unchanged)
F1391	Sedative, hypnotic, or anxiolytic use, unspecified, in remission
F13920—F1490	(text unchanged)
F1491	Cocaine use, unspecified, in remission
F14920—F1590	(text unchanged)
F1591	Other stimulant use, unspecified, in remission
F15920—F1690	(text unchanged)
F1691	Hallucinogen use, unspecified, in remission
F16920—F1890	(text unchanged)
F1891	Inhalant use, unspecified, in remission
F18920—F1990	(text unchanged)
F1991	Other psychoactive substance use, unspecified, in remission
F19920—R785	(text unchanged)

[M.] N. Table of mental health diagnoses, for dates of service on or after October 1, 2015:

[(1)] (table proposed for repeal)

[(2) For dates of service on or after October 1, 2015:]

F200—F319	(text unchanged)
F32A	Depression, unspecified
F320—F4329	(text unchanged)
F4381	Prolonged grief disorder
[F438] F4389	(text unchanged)
F439—G259	(text unchanged)
[R457	State of emotional shock and stress, unspecified
R45850	Homicidal ideations
R45851	Suicidal ideations]
O99340—O99345	(text unchanged)
R457	State of emotional shock and stress, unspecified
R45850	Homicidal ideations
R45851	Suicidal ideations
T1491XA	Suicide attempt, initial
Z046	(text unchanged)

[N.] O. (text unchanged)

[O.] P. Table of poisoning diagnoses, for dates of service on or after July 1, 2016:

T360X2A—T3992XA	(text unchanged)
T400X1A	Poisoning by opium, accidental (unintentional), initial encounter
T400X2A	(text unchanged)
T401X1A

Issue Date	Emergency and Proposed Regulations 5 p.m.*	Notices, etc. 10:30 a.m.	Final Regulations 10:30 a.m.
2023
July 28	July 10	July 17	July 19
August 11	July 24	July 31	August 2
August 25	August 7	August 14	August 16
September 8	August 21	August 28	August 30
September 22	September 1**	September 11	September 13
October 6	September 18	September 25	September 27
October 20	October 2	October 6**	October 11
November 3	October 16	October 23	October 25
November 17	October 30	November 6	November 8
December 1	November 13	November 20	November 22
December 15	November 27	December 4	December 6
December 29	December 11	December 18	December 20