ATCC seeks technology upgrades and staffing stability as cannabis enforcement hits legal roadblock

Samantha Tapia of the Department of Legislative Services presented the Alcohol, Tobacco, and Cannabis Commission’s fiscal 2025 operating budget to the Public Safety, Transportation, and Environment Subcommittee, saying the budget “increases $1,200,000, or 11% over fiscal 2024 to $12,100,000,” and that $900,000 in general funds is proposed to build an online licensing system.

The commission’s executive director, Jeff Kelly, told lawmakers the agency retained 22 positions transferred in the Cannabis Reform Act and has filled 21 of them. Kelly said ATCC’s staffing and a recent office move in Baltimore—arranged with the Department of General Services—include secure evidence storage and were necessary to run the agency independently after its formation in 2021.

Tapia described the budget composition: roughly 63% of the appropriation covers personnel (about $7.7 million), 22% covers contractual services (about $2.6 million), 7% for rent and utilities (about $886,000), with the remainder for supplies and statewide allocations. She also noted a fund swap of approximately $2.8 million in special funds for reimbursable funds tied to a memorandum of understanding with the Maryland Cannabis Administration.

Kelly reviewed inspection activity and enforcement work: ATCC exceeded FY23 goals, inspecting about 33% of licensed tobacco retailers and 22% of alcohol retailers. He said cannabis inspections began July 1 and that the agency has conducted 1,162 cannabis inspections so far. On enforcement trends, Kelly said increased inspections produced more violations and confiscations for alcohol and tobacco.

Kelly told the subcommittee that the Maryland Hemp Coalition filed suit in Washington County and that “a circuit court judge there saw enough to issue an injunction, which essentially stops us from taking any enforcement action against this unlicensed market” for operators that existed before July 1. He added the injunction did not prevent enforcement against sales to underage consumers and that ATCC is developing a compliance-check program to test and pursue underage sales, which it plans to run with local law-enforcement and public-health partners.

On fiscal matters, Kelly said ATCC requested a FY24 deficiency of roughly $840,000 to cover unexpected rent and utilities after the move. For FY25 the agency seeks funding primarily for technology: a licensing platform that will interface with Maryland’s 1-Stop business licensing portal and ATCC’s Salesforce system, upgrades to its public website, and a case-management system to support field reporting and evidence inventory. Kelly described the current manual licensing process—paper checks, data entry and mailed certificates—and said automation would speed turnaround, reduce labor and allow online payments and status checks. He summarized the technology request as the only substantive FY25 funding need beyond baseline operations.

Tapia recommended adding MFR (Managing for Results) measures for cannabis inspections to improve tracking of enforcement outcomes; Kelly agreed but cautioned that the injunction makes some near-term enforcement data uncertain. Lawmakers pressed on training and partnerships; Kelly said most ATCC field agents are Maryland-certified, many retired officers, and that the Maryland Cannabis Administration has provided training to help them adapt to regulating an item that is legal but newly regulated. Kelly also described outreach to all 21 jurisdictions to set points of contact and deconfliction procedures ahead of enforcement.

The subcommittee did not take a vote during the hearing. Members asked staff to continue monitoring enforcement data, consider committee narrative language to adopt the recommended MFR measures, and to follow up on coordination needs for underage-sales investigations. The chair adjourned the meeting.