January 20, 2022

Disclaimer: Transcripts are generated and may contain errors, including typos or misinterpretations of the spoken content, and may not follow the video content precisely. While we strive for accuracy, please verify critical information independently.

Chairman Alan Silverstein: Elizabeth Betty Buck with us, we have Eric Morrissette with us, and we have Barbara Wahl and myself, Alan Silverstein, so we have a quorum today. First order of business is approval of the December 16th meeting. I need a motion for approval.

Unidentified Speaker: I move.

Unidentified Speaker: Barbara. Second, please.

Unidentified Speaker: Eric, I have a second.

Chairman Alan Silverstein: Motion and a second. All those in favor signify by saying aye.

All Commissioners: Aye.

Chairman Alan Silverstein: Oppose, same sign. Motion carries. Executive director’s report, Mr. Kelly.

Executive Director Jeff Kelly: Thank you, Mr. Chair. Happy January in 2022, everybody, starting our beginning of our second year, and it’s pretty neat. Excuse me, we had a pretty interesting and fairly busy period of time since our last meeting in December. We had eight incidents for which people were charged or referred, either for charges or referred to local liquor boards for other actions. Of those, four of them were strictly alcohol-related incidents. One of them was an alcohol and tobacco-related incident, and the remaining three were tobacco incidents.

I’ll tell you about seizures first and OTP other tobacco products. We seized over nearly 9,400 sticks of other tobacco products, 26 packages of cigarettes, 116 containers of spirits, 65 containers of beer, and two containers of wine. Of those four alcohol cases, what I kind of wanted to draw your attention to is that two of them, well, three of them actually, something that is a little bit unusual for us. One is there was an instance where a wholesaler made a delivery to a retailer, or at least it made a delivery to someone who didn’t have a license. Likely, this was somebody who was a retailer who didn’t have the license any longer. Either they chose not to have it for whatever reason or were ineligible to get it renewed, but in any event, the wholesalers are obligated to check and verify that whoever they make deliveries to have a license in place, and in this case, they did not do that. So they have been charged, and we are working through that process internally.

In two other instances, again, these are cases of wholesalers committing acts that they’re not supposed to do. Wholesalers can’t give anything of value to a retailer. That means they can’t give them something physically, an item that’s physically usable. It means they can’t give them help or work or do anything other than the very strictly laid out provisions that are in the law and in our code. In this instance, we had two different wholesalers that went to retailers and were stocking shelves for them. They can’t do that. What wholesalers may do is drop off product in the store, of course. They may set up displays, set up a display in the store, but they can’t come back and replenish the display. They can rotate stock on shelves if they have dates that become expired. They can do that, but they can’t come there and just give labor away by restocking shelves. Oftentimes, during the holidays, some retailers might look to some of their wholesalers and see if they can get a little help stocking shelves. That’s what we think happened here. So two of those are for that. I bring that out because it’s really different than the usual, which might be purchasing. Usually, it’s what a retailer is doing, purchasing other than a wholesaler making a sale they shouldn’t make, but in this case, it was a wholesaler doing something a little bit wrong, either selling to an unlicensed individual or entity or providing some other services too. Just interesting, and these will carry out through our system. Just to bring your attention to it, on February 21st, that’s what is generally considered Betty’s very commission. Very this alcohol day in the house. It’s President’s Day. Every year during President’s Day, the house has alcohol day. That’s a day where you bring your lunch and your dinner and coolers of water because they are usually very long days where all of the alcohol bills receive their hearings. So this year it’s going to be virtual. It was last year too, and the nice part about it being virtual is you get a seat if you want, and it didn’t take like six hours or seven hours like they ordinarily do for other years. Nonetheless, you might want to tune in on the 21st and just see what’s going on.

Also, since the General Assembly started a little over a week ago now, there have been nine alcohol bills that have been introduced. Eight of them are local bills. One of them is a Statewide bill. I’ll talk about the Statewide first. It’s actually a bill just to create a study. This is to study minority involvement and historic involvement in the alcohol industry. So the Governor’s Office is assigned this responsibility. The ATC is one of many people who are to participate and help along with the study. I believe we do it at the end of this year, but we’re not obligated to staff it. We’re just going to provide information, I’m sure, and some historical context.

The other eight were, I mentioned local bills, and just briefly what that means is if you already know it, I apologize for oversimplifying it, but there’s usually Statewide bills or local bills. Statewide bills get a lot of consideration of scrutiny before they become passed or not. Local bills get some level of that scrutiny, but frequently a local bill is simply a bill that one particular county or jurisdiction, Baltimore City or one of the counties, would introduce that only impacts that county. For example, Montgomery County might want to have alcohol movie theaters. So there’s a bill, a local bill by the local delegation that all supports this, say we want to have these movie theaters with alcohol licenses in them. Please pass our bill. If the local jurisdiction is in favor of it, most of the time the General Assembly just gives them a courtesy and passes the bill. Every reason I said significant, we see more and more local bills now each year where they don’t introduce a Statewide Cinema bill or movie theater bill. They do it by jurisdiction. Growlers, I think, maybe a good example that uses these resalable beer containers. It started off in a handful of districts, and now it’s pretty much Statewide, but little by little you might see it happen one after year. It kind of gives you an idea of what the trend is going to be moving forward.

The tobacco bills, both bills are very similar in what they do. One’s a Statewide bill, one’s a local bill. The local is Baltimore City only. The Statewide is for everybody, obviously, and they both do the same thing, though. Right now, the state has the preeminent authority of regulating and enforcing the state, creating laws for state tobacco usage. These two bills would allow Baltimore City specifically, and the other, the entire state, the ability to enact their own laws and do their own enforcement on tobacco violations. Caveat being that anything that they enact has to be at least as stringent as existing state law. So they can’t make something less stringent than state law, but with these bills, they would be able to make something a little bit tougher, and that they would have the authority to carry that out as well.

Then, if I could, I just wanted to just very, very briefly introduce one of our representatives from the Maryland Department of Health, Dana Monro. Dana has been a 15-year veteran of the Department of Health who spent the entire time in the Center for Tobacco Prevention and Control. She currently serves as its director. She holds a master’s degree in Health Science from Johns Hopkins Bloomberg School of Public Health, a bachelor from Penn State University, and she’s a certified health education specialist. Interestingly also, because I just had a completely unrelated question of her recently, she’s also the state lead for the Pediatric initiative of COVID vaccines. I’m not saying it in the proper order, but she’s the lead for making sure that we figure out a way to help get the vaccine to pediatric patients for COVID. I just happen to have one of our industry members contact me yesterday and said, “I’m in trouble. My daughter needs help. She’s allergic to the vaccine. Do you have any way we can go?” I was able to reach out to Dana, who’s working to help us get some information on that. So just happenstance that we have another great resource here for a variety of reasons. I say welcome aboard, Dana. I’m glad to have you, and I’m sure the other Commissioners are glad to have you here as well. Mr. Chair, when we get to new business, I have just a little bit that I’ll bring you up to date on some other issue, but that will be the standard report.

Chairman Alan Silverstein: Can I ask a question?

Executive Director Jeff Kelly: Sure.

Chairman Alan Silverstein: And I don’t know if I’m allowed to know the answer, but Jeff, you had to know I was going to ask you this. Were the two distributors that stocked the shelves competitive distributors in the same store by chance?

Executive Director Jeff Kelly: I think that’s a fair statement.

Chairman Alan Silverstein: Okay, that’s what I figured.

Executive Director Jeff Kelly: That’s a fair statement. And, you know, interestingly, yes, that’s, yes. But I’ll say this. Now that we’re kind of aware of how this happens, it’s going to be a little bit easier for us to spot it in other stores now too because this really opened up new avenues of investigation for us. So I think we’re going to be a little better at being able to crack down on this also.

Chairman Alan Silverstein: Because it happens a lot.

Executive Director Jeff Kelly: That’s my understanding, and I’m hoping that the industry will… The industry has always been very good at self-policing, but this is one area they’ve never really done a pretty good job back. Everybody’s been kind of quiet about this, and probably because it’s more widespread than we may know. But you’ve just gotten a little peek behind the curtain, if you will, with this most recent case, and that’s why I’m saying it publicly as well, is to those industry members who are listening in today, you’re forewarned, you can’t do it. And we have ways of finding out what’s going on now.

Chairman Alan Silverstein: I don’t think it’s always been like that. I think it’s just gotten worse lately because some of the bigger retailers are just putting a lot of pressure.

Executive Director Jeff Kelly: Oh, I know that. I mean, I’m hearing things now. On busy weekends, they’re putting out all calls to their solicitors who are the salespeople and saying, “I need help stocking my shelves this weekend. They’re empty,” and people are stopping what they’re doing and going into stock the shelves, which has never been and is not legal. But people are doing it because, quite honestly, the pain of doing it hasn’t necessarily outweighed the pleasure of getting paid more for helping. And our job is not to administer pain or pleasure but to make sure that all the rules are being followed equally, and that’s what we’re doing.

Chairman Alan Silverstein: Thank you.

Executive Director Jeff Kelly: Sure.

Chairman Alan Silverstein: Thank you. Brooke is here from the Maryland Department of Health. You have an update for us?

Brooke Torton: Yes, hi there. Thank you so much for having me. Brooke Torton, managing director of the Legal Resource Center for Public Health Policy, funded by the Maryland Department of Health. And Jeff, you took care of some of this for me, so I’m going to be quick. I just wanted to provide a brief legislative update. So I’ll just provide it just a tad more detail, Jeff, and add one bill to that. So Jeff referenced two bills. One is just Baltimore City and one was related Statewide, and this deals with tobacco preemption at the state level. So preemption at the state level prevents locals from passing laws generally speaking relating to tobacco in their jurisdiction. So the brief background I want to discuss is in 2013, there was a court decision, and it’s as a result of this court decision that we are in this position where we must go back to the legislature. The legislature is the one that has to give the authority back to the locals. Prior to 2013, locals for a few decades were passing laws relating to tobacco, but it was a court decision in 2013 that put a stop to this essentially. So there is a movement to get this bill passed based on the needs and the desire of locals to get… have the ability, the authority to pass laws that they feel would… that they’re in the best position to kind of know what’s happening in their communities and they can kind of come up with solutions that’s impacting their population. So that’s just a little bit of the background as to how we got to where we are. The second piece I want to mention is there is a bill that is related to authorizing pharmacists to furnish nicotine replacement therapy to people that come to them directly. So that is a bill, it’s SB62 and HB28. It’s actually being heard today at 4:00, the house version, at 4:00 today in HGO. I don’t believe the Senate bill has a hearing date yet, but essentially the idea of this bill is that it removes the barriers where patients have to go visit their doctor, you know, get a script, then go to the pharmacist. It’s just to kind of make it more accessible and easier for folks to get access to NRT, and this bill has been introduced in prior years as well. So this isn’t a new concept, and so look out if you’re interested. The hearing should be up around 4:00 today. If you visit the legislature’s website, you can go ahead and listen if you’re interested in that.

Chairman Alan Silverstein: Thank you very much, Brooke. We appreciate having you join us today. New business, Jeff?

Executive Director Jeff Kelly: Thank you. First is just to say that we may be able to do a presentation on something that’s really becoming up-and-coming and a concern perhaps, and that is synthetic tobacco. So what we’re hoping is to get on the agenda for next month synthetic tobacco, what it is, how it’s impacted, if it’s something we’re going to regulate or how we’re going to do that. And I would just say a couple of years ago, and you’re probably all aware of this, synthetic cannabinoids came out. So these were synthetic things that acted a lot like cannabis would act, but they weren’t illegal because cannabis was illegal, but these chemical compounds were not. So the General Assembly started learning what the chemical compounds were and then writing laws specific to them, saying… and the chemical name was in the bill saying this is no longer an illegal product in Maryland. So the wise chemist went back and changed that just a little bit and made it something else. And so next year another bill, and we found ourselves chasing all of this. Then we end up with a more general bill that simply said if it acts like a cannabinoid and it’s kind of like a cannabinoid, it could be enforced. We can go ahead and enforce it. The problem with that, it’s a great thought, but the problem was you still have to have lab work done to say that it acts like a cannabinoid and it’s kind of built like a cannabinoid, and there wasn’t any lab work available for that. So we became a little ineffective in how we could enforce the synthetic cannabinoids. So now we’re going to be dealing with perhaps synthetic tobacco products. And I’ll tell you that there is a lot of interest in the General Assembly. I’ve gotten quite a few calls about it generally, and Dana and I were talking. We might go to do something next month that’ll address this a little bit more and give you just more of a sense of what’s on the radar and what may be coming down the pipe.

That’s item one. And just two things that are off-business here. I happened to meet a week ago with the chairman of the Economic Matters Committee. It’s a brand new chairman, Chairman C.T. Wilson from Charles County. He seems like a real nice fellow, absolutely supportive of this commission. So if there’s anything he can do, he wants to do it to help us. He said specifically if we have any legislative needs this year to come to him directly. He’d be more than happy to introduce bills for us. There’s a timeline on that because it’s all got to be done within the next few weeks. If there’s something that’s burning you guys and you want to talk about it, please let’s talk about it. We can do that offline, and if it’s something that we want to take to him and ask him to bill for, that’s great. But I think he’s going to be a terrific partner. His committee regulates alcohol, tobacco, and a whole host of other things. He’s got a real interest in this, and he’s also going to be responsible for drafting policy for cannabis if and when cannabis is passed, which, you know, it’s subject to referendum this year perhaps. And if it’s passed the referendum and they decide to enact it, then he’s going to be developing policy on that. He’s already kind of laying that work out. He’s going to be leaning on this commission very heavily for input and wants all of our concerns and worries about tobacco and alcohol out of the way so we can focus on cannabis full-time when and if this should pass.

The last thing I like to mention in new business is yesterday Governor Hogan introduced his budget allowances to the General Assembly for consideration. Scheduled for a series of hearings and whatnot, but we’ve got ours. Now the way the budget works is the Department of Budget and Management sends us a number, and the number they sent us originally was roughly $3.7 million. So they say that’s your target budget. Figure out a way to spend it and see if you need that much, and if you need more, you’re going to have to do something different, but that’s what you’re getting, we think, preliminarily. Send us in your budget for that. So we do budget submission from that, and then we were allowed to do something called an over-the-target budget, which we’ve only been around now for a year and we didn’t really know what we were going to need, and we didn’t have budgeting allotments previously because nobody knew. We have a better sense of where we are and what additional needs we have, so we supplemented our budget with what’s called the over-the-target budget, and we asked for a certain amount of bodies, people, and some to support that operation. And I’d have to say that the Department of Budget and Management and the Governor were very generous to us and have included in their allowance for us to the General Assembly seven additional agents and one additional administrative position and the supplement funding behind that that we’ll need to equip and train and carry that out. So I’m just thrilled that we got that. I really am. It amounts to an additional, oh gosh, like $1.6 million additional, so it’s almost a 50% increase in what we had to get more staff and more people out there because that’s where we’ve really been short. We don’t have the agents in the field. This will go a long way, of course, to the extent that it passes. It doesn’t take effect until July 1st, but I hope to have a list lined up and ready by July 1 if we’re able to get this.

That’s it, Mr. Chair. Thank you.

Chairman Alan Silverstein: Does any of the other members of the commission or anybody else have any questions or any other business before us? If not, I take a motion for adjournment.

Unidentified Speaker: So moved.

Chairman Alan Silverstein: All right, Betty Buck. I need a second.

Unidentified Speaker: Second.

Chairman Alan Silverstein: Eric Morrissette. Motion and a second. All those in favor signify by saying aye.

All Commissioners: Aye.

Chairman Alan Silverstein: Opposed, same sign. I want to thank everybody for joining us today. We’ll see you next month. Thank you. Take care.

February 17, 2022

Disclaimer: Transcripts are generated and may contain errors, including typos or misinterpretations of the spoken content, and may not follow the video content precisely. While we strive for accuracy, please verify critical information independently.

Unidentified Speaker: So synthetic nicotine, it’s created in a lab and it’s not derived from tobacco. I can’t necessarily explain specifically the science that goes into that, but I can tell you that it is extremely expensive to make and this is a new and kind of developing area that we’ve seen. Some manufacturers have begun to use synthetic nicotine in their products. The reason for that is the FDA asserts regulatory authority over tobacco and derivatives of tobacco. So back in 2016, when they published the deeming rule, they defined tobacco products as products that were derivative of the tobacco plant. Nicotine is a derivative of the tobacco plant, and that is how the FDA extended its authority to include these electronic smoking devices because they include liquid nicotine product and nicotine is a derivative of tobacco. At the time, I don’t know that they were kind of anticipating that industry may then switch to these synthetic nicotine products that are created in a lab and are not derivatives from the actual plant.

Moving forward a little bit, I just want to give a really brief history on this because Puff Bar is the main company that we’ve heard about being someone that’s using the synthetic nicotine in their products instead of nicotine that’s derived from the tobacco plant. So back in July of 2020, Puff Bar gets a warning letter from the FDA telling them to remove their product from the market. The reason they were telling them to remove their products from the market was because they actually introduced them after 2016. The FDA, in 2016 when they asserted their authority over tobacco products, they said, “We’re not going to issue enforcement against those who have their electronic smoking devices on the market still. We’re going to let you submit your pre-market tobacco product application, but that applies to products that are already on the market.” Now Puff Bar just went ahead and introduced them after that date. So the FDA says, “You were introduced after this date. Whether or not you submit a pre-market tobacco product application, our enforcement discretion doesn’t apply to you.” That was back in July of 2020.

Then moving forward a little bit in February of 2021, Puff Bar announces that their products that they’re selling are actually including synthetic nicotine, not nicotine that is a derivative of tobacco. Presumably, that’s how they feel they can get around the FDA regulation. The FDA has spoken out and said they’re going to be handling this on a case-by-case basis. So we have yet to see anything else specifically, any other word on this, but of course, we are tracking very specifically what they’re going to do and what they’re saying.

Here in Maryland, the Alcohol and Tobacco Commission has authority over the licensing and the taxation of tobacco products. At the Legal Resource Center, we’ve been asked quite a bit, “Do our laws cover synthetic nicotine?” We see what’s happening at the federal level. Are laws in Maryland broad enough to encompass these products? So we engage in analysis and we have concluded that, yes, our definitions are broad enough to include these products. We also spoke with the Office of the Attorney General, and they concur with this position that, yes, our definitions are broad enough to encompass these products. The definition of other tobacco products and electronic smoking devices does vary some across our licensing, taxation, and sales restriction, but like I said, there is some variation there, but they are broad enough.

I’m just going to get into that and show you the language here on the screen and show you a little more specifically what I am referring to. Licensing for other tobacco products, I’ve included the language here, the definition, just a select part of this here, and as you’ll see, they’re talking about other tobacco products include the products that are intended for human consumption and that are made of or derived from anything that contains tobacco or nicotine. They don’t specify whether it has to be nicotine as a derivative of the tobacco plant or just any type of nicotine. It’s just nicotine. And so again, now we’re looking at the electronic smoking devices on the licensing article there. So anything that can be used, any device that can be used to deliver aerosolized or vaporized nicotine to an individual. They’re not qualifying what nicotine means. This could be a derivative of tobacco, could be synthetic, or who knows, maybe some other type of nicotine down the road. So here, looking at licensing, it looks like we are certainly covered for products that contain synthetic nicotine.

Taxation, here in our taxation article for other tobacco products and electronic smoking devices, it’s referring to the business regulation article definitions for each. You’ll see the 16.5 101 and 16.7 101, and so because they’re deferring to those definitions, and I’ve just talked a little bit about what they’re saying and what that means there, it’s the same definition. So the same explanation that I just provided applies there as well.

All right, now as far as sales are concerned, I know the Alcohol and Tobacco Commission, this isn’t necessarily your specific area. You don’t regulate in this area, but just to let you know, we wanted to make it clear that the same analysis applies here as well. When we’re looking at the civil penalties for those who sell electronic smoking devices to people under 21, they’re referring to that same definition in the business regulation article. The licensing provisions for electronic smoking devices, same definition there. And then for the criminal penalty for selling to those under 21, they include a definition of tobacco product here, but it’s the same exact concept here. You’ll see I have in quotes, it’s, you know, we’re talking about human inhalation, absorption, etc. of a product that’s made of, derived from, or contains tobacco or nicotine. So same thing, our sales statutes should apply as well to synthetic nicotine products.

I think Tom mentioned briefly there was a bill, HB 11227. It’s really our thought and our position that this doesn’t do anything. This bill, we think the language is clear enough, but I would note that specifically what that bill does as far as the language is concerned, it amends the sales restriction to specifically include the word synthetic nicotine, and it also would amend the licensing article. It doesn’t make any reference to the taxation piece of this, and it also amends that tobacco use cessation programming, which is managed by MDH. So there isn’t any kind of implications for regulatory power, and that definition there is pretty narrow, so we don’t think it would cover synthetic nicotine. But that has no impact on the regulatory scheme or the sales to those under 21. So we don’t see this bill as really doing anything but just kind of complicating the mix. I have other thoughts on that as well, but just wanted to make that point and make that clear.

I have included here on my, on the last slide, my phone number, email address, and name. If we have any time, I’m, of course, happy to take questions now.

Unidentified Speaker: Thank you for the presentation, Brooke. Anybody have any questions? Chair, director, any comments?

Executive Director Jeff Kelly: Yes, sir. If I may. Thank you. Only to say that thank you, Brooke, very much for that. Yes, we were also involved in the discussion with the general, not general, with the council, the AG, the assistant attorney generals assigned to the Department of Health and to legislative services also. Tom was very much involved in that work. We also concur. We think existing language is there for us to take enforcement action when the term nicotine is used to cover synthetic. We don’t see that that is an issue either. Not sure really if the bill helps us or hurts us, but regardless, we feel very much empowered and authorized to act on that as it exists.

Unidentified Speaker: Right. Thank you. Anybody else have any comments or questions?

Unidentified Speaker: Okay. I think at this point, unless there’s anybody else who has any comments, I’m going to ask for a motion to adjourn. Anybody want?

Unidentified Speaker: Okay, I wondered if you want to stay on for the rest of the day. I need a second, please.

Unidentified Speaker: Second.

Unidentified Speaker: Okay, I have a motion and a second. All those in favor signify by saying aye.

All Commissioners: Aye.

Unidentified Speaker: Opposed, same sign. All right. Thank you all very much. Thomas, welcome aboard. Mr. Kelly, I think we’re moving in the right direction. Thank you for keeping us informed on the legislative issues. I just should note that I will be appearing before the Senate Appointments Committee Monday the 21st at 5:00 to get formal approval to be on the commission. I was appointed in May of last year and the legislature was not in session. So wish me luck.

Unidentified Speaker: Good luck, Al.

Unidentified Speaker: All right, thank you. Take care. Have a great.

Unidentified Speaker: Thank you all. Bye-bye.

Unidentified Speaker: Bye-bye.

“Maryland Alcohol and Tobacco Commission Meeting – April 21, 2022“

Disclaimer: Transcripts are generated and may contain errors, including typos or misinterpretations of the spoken content, and may not follow the video content precisely. While we strive for accuracy, please verify critical information independently.

Unidentified Speaker: Eric Morett here. Robert P here. Barbara Wahl here. Al Silverstein here. I need an approval of the February 17, 2022 meeting minutes as presented.

Unidentified Speaker: I’ll move.

Eric Morett: Eric, second.

Barbara Wahl: I’ll second.

Chairman Alan Silverstein: Barbara, second. All those in favor signify by saying aye.

All Commissioners: Aye.

Chairman Alan Silverstein: Opposed, same sign. Okay, executive director’s report, Mr. Kelly.

Executive Director Jeff Kelly: Thank you, Mr. Chair. Good afternoon, everybody, and glad to be back together. It’s been two months since we’ve been together. Over the last two months, I’m giving you a total cumulative report for the last two months since we’ve last met. We had 14 different incidents of alcohol and tobacco-related events. Within that, 16 people have been charged, and we’ve made quite a few seizures. In the area of other tobacco products sticks, we’re close to 62,000 that were seized. With unstamped cigarette packs, just under 5,000. Nearly 400 containers of distilled spirits were seized, 52 containers of beer, and 837 containers of wine. These incidents have resulted from across the state. I’m just going to read off a few of the counties to give you a sense of it: Carroll, Frederick, Harford County, Allegany, Cecil, Prince George’s, Baltimore County, Baltimore City, and Washington County. So you can see these incidents take place across the entire state.

Also, this is renewal time for us. It is for the local boards. Just to give you a flavor of this again, we issue licenses to the first two tiers, the manufacturers and the suppliers, and all the local boards across the state issue licenses to the retailers. This is the time period for the retailers to issue their licenses across the state. It’s a very busy time for the local boards to issue these, and they do somewhere close to 8,000 licenses. So it’s quite a bit. And we do our licenses as well for our manufacturers and our wholesalers, just those two elements that possess our licenses. And we issue about 700 of those. They all expire April 30th to be renewed for May 1st. So we’re well underway for the renewal. We have quite a few that have already filed their renewal paperwork and will be issuing their certificates next week, printing these out next Monday if everything goes well and having them out by probably Tuesday or Wednesday in the mail. I’m going to get back to that in just a minute because I do want to make another comment on it.

We put out three training and information advisories since we last met. One of them was about the instructions for the renewal for these licenses that we issue that we’re putting out right now. We’ve found that we had to put out these advisories each month or so before we actually send out the renewal coupons. Now, years ago, to renew, you had to fill out a long four-page form to renew, and Commissioner Buck can tell you all about that. It was kind of a pain. You had to fill in a lot of boxes. It was the same thing every year. So we really shortened this up. Now it’s a coupon at the bottom of a piece of paper that you have to fill out. You have to put four things on there. We already know what license you want. You have to put out how much money you’re going to send us; that’s in one box. You have to check another box to tell us if you’re a caterer. If you’re not a caterer, you don’t need to check it. It’s very explicit. If you check it, you’re a caterer. The third box is the signature of the licensee or an officeholder of the business, and the fourth thing is the signature of the property owner. Those are the four things that are required.

Out of the 700 renewals that we sent out and received back, 400 of them were missing at least one of those items. Now, when we send out these advisories, we send them out saying we’ve done this now. This is our third time. This is our third go-round. Here’s what we’re seeing as errors. Please don’t clip the coupon off of the advisory that we’re giving you and send that in. We send you a personalized advisory in the mail. We give them very explicit instructions that are only four steps: make sure you’ve done the following. And still, 57% of them are not correct.

So here are our options: last year, we fixed everything. This year, we’re fixing it again. Against my better judgment, really, we’re fixing them again because it’s just faster for our team to fix the 400 errors than it is to let people really just not be renewed and have 400 license holders not have licenses, which is tempting but probably not realistic. So we’re fixing all of those. We’ll have all of those done and completed by the week’s end, by tomorrow or early Monday, so that we renew our licenses and everybody will be up to date. But it’s a real problem. And again, it’s such a simple process now, and it’s kind of a maddening problem. So that is why we waste some of our advisories that we do each year to give these very explicit instructions. So I say that because you’re going to hear me mention these a couple of times throughout the year.

So that was one of them. We issued an instruction sheet saying please work really hard to try and get this right. The second one was about really emphasizing to tobacco retailers a lot of violation increases. As I mentioned, we seized almost 62,000 sticks of OTP, other tobacco products. That’s a lot. And we’re seeing a lot of that. We’re seeing more loose cigarette sales, we’re seeing more unstamped cigarette sales through our regular retailers and businesses in the state. So the second one we addressed directly to these retailers and said, hey, look, here are the rules. Here’s where you get your tobacco from. You have to buy cigarettes from this entity, and here’s what they have to look like, and they’ve got to have the stamp on it. You have to buy other tobacco products from these entities; they’re the only ones allowed to sell in Maryland. And never may you ever open up a pack of cigarettes and sell cigarettes individually. You may not. We’re seeing a lot of it, and we’re charging for it. So we were kind of putting people on notice that we’re not lightening up on the enforcement side. So please do your best to tighten up.

Then our third advisory that was put out was another reminder of how to fill out these coupons to our direct wine shippers. These are people who have permits from outside, a few inside of the state and mostly outside of the state, to sell wine directly from their wineries. There are several conditions that exist in order to be a direct wine shipper. If you meet those conditions, then you’re allowed to ship directly to a consumer in our state. And we probably have somewhere around 1,200 of these that are across the country. So we’re getting those that expire on June 30th and renew on July 1st. We sent out an advisory just recently to let them know you’re about to get this coupon. Please pay attention to the just a couple of areas you have to fill out. Pay a lot of attention. If you don’t, you will be delayed in getting a new one and really just kind of putting them on alert, making them be responsible for this themselves.

So that’s the advisories. Next month, the dust is still settling around the general assembly’s work this year and the governor’s decisions on what he’s going to do with many of the bills. Next month, we’ll have a very detailed presentation on what bills passed, which ones were kind of significant and maybe didn’t pass. We’ll answer any questions you have. So we’ll put together a fairly decent presentation for you for that for next month. But in the meantime, a couple of things that were interesting for us passed.

One, we had our two budget hearings and our budget bill, and we really flew through. And the chairman was there for both of those hearings, and thank you, Mr. Chair, for being present for that. It makes a big difference, you know, as he would tell you. I think they were very easy hearings for us, fortunately, this year. We’ll take that. And the question from both committees, really the big question for both committees was, is that enough money? Because the governor allocated a decent increase for us and it’s been well either has been or will be appropriated very soon, effective July 1st. The long and short of it is it’s giving us seven new sworn agent positions, which we sorely need, and an additional non-sworn non-agent administrative position in the office, which again we really need. And for those who visited, you see how busy a handful of people are doing these licenses, keeping up on that. So it was great for us for the budget. I love the general assembly’s questions of, is that enough? Do you need more? And I’m excited to go back next year if we’re able to accomplish even more and say, yeah, we were wrong, we did need some more, and we’d like to get that.

So that went well. Another bill was House Bill 1253. That was really just a corrective bill, but just to give you a sense of it, in moving the ATC and all the responsibilities from the comptroller to its individual commission, independent commission, all throughout the tobacco regulations, the tobacco laws, alcohol regulations, alcohols, all throughout those, it mentions comptroller. And when the general assembly created us, they said essentially we expect the ATC to be the successor agency everywhere we say the comptroller will do something relative to the regulation or enforcement of alcohol and tobacco, we mean the ATC. And there are tons of places in all the laws and regs that still say comptroller. So each year we go through and we try to clean it up. This House Bill 1253 went a long way toward that. If you care to take a look at it, it reads pretty easily, but it goes through a variety of areas in the tobacco tax law and in the alcohol tax, I’m sorry, tobacco law and the alcohol law to just migrate responsibility, specifically stating the ATC is responsible and may do a variety of things relative to that.

We’ve been undergoing a transformation in the COMAR, which are the Code of Maryland Regulations, the regs that we enact. They all live within the house of the comptroller still. We are about a month away, maybe less, from completing the conversion of those regs from the comptroller to us as an independent agency. There are really not going to be any substantive changes. Everything that was in regulation before, even though some of it needs to be fixed or modernized or updated, it’s not going to happen now. We’re just simply taking the time now to move everything so we don’t have to go through a lot of hearings. We’re just moving identical information over to us. Once we get it, we’re going to undergo a massive reevaluation of our regs and see what needs to be updated. Of course, we’ll keep you informed and bring you in on all these as we’re moving along. But that’s the intent over some time. Truthfully, it’ll probably be after June or July because it may take that long logistically to move all the regs under the ATC.

And the last thing is cannabis. We’ll have more to report on that next month as well. But it was an interesting year. House Bill 1, which sets cannabis up for a referendum to the states, I’m sorry, to the citizens of the state, passed and will be voted on in November. And my understanding is it’s like in the mid-70s, polls indicate that the population is supportive of cannabis. So there’s a good likelihood that that would pass. It doesn’t do anything except to say do we support this or not, generally speaking. Then another bill was House Bill 837. That bill spent a lot of time going through expungements and starting to set up in a very small way, starting to set up some framework for policy about how we’ll handle cannabis, but it really didn’t get into that so much. But one of the interesting things in the uncodified section of it, and specifically section 8, it said if this bill does, if House Bill 1 and the referendum pass, then effective, I believe it’s January 1st, 2023, the medical cannabis commission will migrate under the office of the executive director. So we’re going to have that to deal with if that passes, at least elements of it. I’m not really sure how much of it, we’re going to have to dissect that. But next week, we’ll be meeting with the Cannabis Commission executive leadership and trying to figure out what that really means and what it will look like. But it does talk about us sort of absorbing that commission, at least elements of it, and how we should make that happen. And next month, we’ll have a bigger presentation on the outcome of the cannabis legislation as well.

Our website, you know, our website’s not great, but we’re working on it. We are in discussions with the state’s Department of Information Technologies, which is called DoIT, and also the comptroller’s information technologies division. Either of those may be eligible or be able to do the website for us. We’re looking at both of them to see what they can offer, where we reasonably should be expecting to live. We still use a lot of the comptroller’s resources, which require us, as you all have, to have specific types of email addresses through the comptroller’s frameworks of firewalls and whatnot. So we just have to weigh all of that and figure out where we’re going. But we’re making great progress on getting a website that we all want it to be: educational, informative, useful, easy to navigate. We’re working very hard on that.

Mr. Chair, that’s it for my report. I would just add this: the chair was able to stop by a while back and we were able to get a photograph of him and an ID card issued to him. If any of you would like to get that, let me know. We have to make an appointment for you, which is not a big deal. But if it’s convenient for you and you want to do that, we’ll get you set up for an appointment because that all takes place in Annapolis. It’s very convenient and close. It’s just in another building with another entity that does it. So if you’re interested in that, let me know. We’ll get you set up for a photograph and get you your ID cards issued as well. That’s it, Mr. Chair.

Chairman Alan Silverstein: You’re muted. You’re on mute, sir. Oh, you’re on mute. You’re still muted.

Chairman Alan Silverstein: I was going to say the advantage of that is going through security, and it expedites that process. So I’d encourage you to do that. Do we have any new business?

Unidentified Speaker: Can you hear me?

Chairman Alan Silverstein: We can hear you.

Unidentified Speaker: Oh, okay. No new business. Scared me for a minute there. Do we have any other new business at this time? If not, I take a motion for adjournment.

Unidentified Speaker: I’ll move.

Eric Morett: Second, Morett.

Unidentified Speaker: Second by Miss Buck. All those in favor signify by saying aye.

All Commissioners: Aye.

Chairman Alan Silverstein: Opposed, same sign. I want to thank everybody who has sat in on the meeting. If anybody wants to participate or has any information that’s germane, please get with Mr. Kelly for the next agenda. Thank you all very much. We’ll see you next month.

Unidentified Speaker: Thank you.

Unidentified Speaker: Thanks, guys.

Unidentified Speaker: Thank you

March 17, 2022

No Video available for this meeting.

April 21, 2022

Disclaimer: Transcripts are generated and may contain errors, including typos or misinterpretations of the spoken content, and may not follow the video content precisely. While we strive for accuracy, please verify critical information independently.

Unidentified Speaker: Eric Morett here. Robert P here. Barbara Wahl here. Al Silverstein here. I need an approval of the February 17, 2022 meeting minutes as presented.

Unidentified Speaker: I’ll move.

Eric Morett: Eric, second.

Barbara Wahl: I’ll second.

Chairman Alan Silverstein: Barbara, second. All those in favor signify by saying aye.

All Commissioners: Aye.

Chairman Alan Silverstein: Opposed, same sign. Okay, executive director’s report, Mr. Kelly.

Executive Director Jeff Kelly: Thank you, Mr. Chair. Good afternoon, everybody, and glad to be back together. It’s been two months since we’ve been together. Over the last two months, I’m giving you a total cumulative report for the last two months since we’ve last met. We had 14 different incidents of alcohol and tobacco-related events. Within that, 16 people have been charged, and we’ve made quite a few seizures. In the area of other tobacco products sticks, we’re close to 62,000 that were seized. With unstamped cigarette packs, just under 5,000. Nearly 400 containers of distilled spirits were seized, 52 containers of beer, and 837 containers of wine. These incidents have resulted from across the state. I’m just going to read off a few of the counties to give you a sense of it: Carroll, Frederick, Harford County, Allegany, Cecil, Prince George’s, Baltimore County, Baltimore City, and Washington County. So you can see these incidents take place across the entire state.

Also, this is renewal time for us. It is for the local boards. Just to give you a flavor of this again, we issue licenses to the first two tiers, the manufacturers and the suppliers, and all the local boards across the state issue licenses to the retailers. This is the time period for the retailers to issue their licenses across the state. It’s a very busy time for the local boards to issue these, and they do somewhere close to 8,000 licenses. So it’s quite a bit. And we do our licenses as well for our manufacturers and our wholesalers, just those two elements that possess our licenses. And we issue about 700 of those. They all expire April 30th to be renewed for May 1st. So we’re well underway for the renewal. We have quite a few that have already filed their renewal paperwork and will be issuing their certificates next week, printing these out next Monday if everything goes well and having them out by probably Tuesday or Wednesday in the mail. I’m going to get back to that in just a minute because I do want to make another comment on it.

We put out three training and information advisories since we last met. One of them was about the instructions for the renewal for these licenses that we issue that we’re putting out right now. We’ve found that we had to put out these advisories each month or so before we actually send out the renewal coupons. Now, years ago, to renew, you had to fill out a long four-page form to renew, and Commissioner Buck can tell you all about that. It was kind of a pain. You had to fill in a lot of boxes. It was the same thing every year. So we really shortened this up. Now it’s a coupon at the bottom of a piece of paper that you have to fill out. You have to put four things on there. We already know what license you want. You have to put out how much money you’re going to send us; that’s in one box. You have to check another box to tell us if you’re a caterer. If you’re not a caterer, you don’t need to check it. It’s very explicit. If you check it, you’re a caterer. The third box is the signature of the licensee or an officeholder of the business, and the fourth thing is the signature of the property owner. Those are the four things that are required.

Out of the 700 renewals that we sent out and received back, 400 of them were missing at least one of those items. Now, when we send out these advisories, we send them out saying we’ve done this now. This is our third time. This is our third go-round. Here’s what we’re seeing as errors. Please don’t clip the coupon off of the advisory that we’re giving you and send that in. We send you a personalized advisory in the mail. We give them very explicit instructions that are only four steps: make sure you’ve done the following. And still, 57% of them are not correct.

So here are our options: last year, we fixed everything. This year, we’re fixing it again. Against my better judgment, really, we’re fixing them again because it’s just faster for our team to fix the 400 errors than it is to let people really just not be renewed and have 400 license holders not have licenses, which is tempting but probably not realistic. So we’re fixing all of those. We’ll have all of those done and completed by the week’s end, by tomorrow or early Monday, so that we renew our licenses and everybody will be up to date. But it’s a real problem. And again, it’s such a simple process now, and it’s kind of a maddening problem. So that is why we waste some of our advisories that we do each year to give these very explicit instructions. So I say that because you’re going to hear me mention these a couple of times throughout the year.

So that was one of them. We issued an instruction sheet saying please work really hard to try and get this right. The second one was about really emphasizing to tobacco retailers a lot of violation increases. As I mentioned, we seized almost 62,000 sticks of OTP, other tobacco products. That’s a lot. And we’re seeing a lot of that. We’re seeing more loose cigarette sales, we’re seeing more unstamped cigarette sales through our regular retailers and businesses in the state. So the second one we addressed directly to these retailers and said, hey, look, here are the rules. Here’s where you get your tobacco from. You have to buy cigarettes from this entity, and here’s what they have to look like, and they’ve got to have the stamp on it. You have to buy other tobacco products from these entities; they’re the only ones allowed to sell in Maryland. And never may you ever open up a pack of cigarettes and sell cigarettes individually. You may not. We’re seeing a lot of it, and we’re charging for it. So we were kind of putting people on notice that we’re not lightening up on the enforcement side. So please do your best to tighten up.

Then our third advisory that was put out was another reminder of how to fill out these coupons to our direct wine shippers. These are people who have permits from outside, a few inside of the state and mostly outside of the state, to sell wine directly from their wineries. There are several conditions that exist in order to be a direct wine shipper. If you meet those conditions, then you’re allowed to ship directly to a consumer in our state. And we probably have somewhere around 1,200 of these that are across the country. So we’re getting those that expire on June 30th and renew on July 1st. We sent out an advisory just recently to let them know you’re about to get this coupon. Please pay attention to the just a couple of areas you have to fill out. Pay a lot of attention. If you don’t, you will be delayed in getting a new one and really just kind of putting them on alert, making them be responsible for this themselves.

So that’s the advisories. Next month, the dust is still settling around the general assembly’s work this year and the governor’s decisions on what he’s going to do with many of the bills. Next month, we’ll have a very detailed presentation on what bills passed, which ones were kind of significant and maybe didn’t pass. We’ll answer any questions you have. So we’ll put together a fairly decent presentation for you for that for next month. But in the meantime, a couple of things that were interesting for us passed.

One, we had our two budget hearings and our budget bill, and we really flew through. And the chairman was there for both of those hearings, and thank you, Mr. Chair, for being present for that. It makes a big difference, you know, as he would tell you. I think they were very easy hearings for us, fortunately, this year. We’ll take that. And the question from both committees, really the big question for both committees was, is that enough money? Because the governor allocated a decent increase for us and it’s been well either has been or will be appropriated very soon, effective July 1st. The long and short of it is it’s giving us seven new sworn agent positions, which we sorely need, and an additional non-sworn non-agent administrative position in the office, which again we really need. And for those who visited, you see how busy a handful of people are doing these licenses, keeping up on that. So it was great for us for the budget. I love the general assembly’s questions of, is that enough? Do you need more? And I’m excited to go back next year if we’re able to accomplish even more and say, yeah, we were wrong, we did need some more, and we’d like to get that.

So that went well. Another bill was House Bill 1253. That was really just a corrective bill, but just to give you a sense of it, in moving the ATC and all the responsibilities from the comptroller to its individual commission, independent commission, all throughout the tobacco regulations, the tobacco laws, alcohol regulations, alcohols, all throughout those, it mentions comptroller. And when the general assembly created us, they said essentially we expect the ATC to be the successor agency everywhere we say the comptroller will do something relative to the regulation or enforcement of alcohol and tobacco, we mean the ATC. And there are tons of places in all the laws and regs that still say comptroller. So each year we go through and we try to clean it up. This House Bill 1253 went a long way toward that. If you care to take a look at it, it reads pretty easily, but it goes through a variety of areas in the tobacco tax law and in the alcohol tax, I’m sorry, tobacco law and the alcohol law to just migrate responsibility, specifically stating the ATC is responsible and may do a variety of things relative to that.

We’ve been undergoing a transformation in the COMAR, which are the Code of Maryland Regulations, the regs that we enact. They all live within the house of the comptroller still. We are about a month away, maybe less, from completing the conversion of those regs from the comptroller to us as an independent agency. There are really not going to be any substantive changes. Everything that was in regulation before, even though some of it needs to be fixed or modernized or updated, it’s not going to happen now. We’re just simply taking the time now to move everything so we don’t have to go through a lot of hearings. We’re just moving identical information over to us. Once we get it, we’re going to undergo a massive reevaluation of our regs and see what needs to be updated. Of course, we’ll keep you informed and bring you in on all these as we’re moving along. But that’s the intent over some time. Truthfully, it’ll probably be after June or July because it may take that long logistically to move all the regs under the ATC.

And the last thing is cannabis. We’ll have more to report on that next month as well. But it was an interesting year. House Bill 1, which sets cannabis up for a referendum to the states, I’m sorry, to the citizens of the state, passed and will be voted on in November. And my understanding is it’s like in the mid-70s, polls indicate that the population is supportive of cannabis. So there’s a good likelihood that that would pass. It doesn’t do anything except to say do we support this or not, generally speaking. Then another bill was House Bill 837. That bill spent a lot of time going through expungements and starting to set up in a very small way, starting to set up some framework for policy about how we’ll handle cannabis, but it really didn’t get into that so much. But one of the interesting things in the uncodified section of it, and specifically section 8, it said if this bill does, if House Bill 1 and the referendum pass, then effective, I believe it’s January 1st, 2023, the medical cannabis commission will migrate under the office of the executive director. So we’re going to have that to deal with if that passes, at least elements of it. I’m not really sure how much of it, we’re going to have to dissect that. But next week, we’ll be meeting with the Cannabis Commission executive leadership and trying to figure out what that really means and what it will look like. But it does talk about us sort of absorbing that commission, at least elements of it, and how we should make that happen. And next month, we’ll have a bigger presentation on the outcome of the cannabis legislation as well.

Our website, you know, our website’s not great, but we’re working on it. We are in discussions with the state’s Department of Information Technologies, which is called DoIT, and also the comptroller’s information technologies division. Either of those may be eligible or be able to do the website for us. We’re looking at both of them to see what they can offer, where we reasonably should be expecting to live. We still use a lot of the comptroller’s resources, which require us, as you all have, to have specific types of email addresses through the comptroller’s frameworks of firewalls and whatnot. So we just have to weigh all of that and figure out where we’re going. But we’re making great progress on getting a website that we all want it to be: educational, informative, useful, easy to navigate. We’re working very hard on that.

Mr. Chair, that’s it for my report. I would just add this: the chair was able to stop by a while back and we were able to get a photograph of him and an ID card issued to him. If any of you would like to get that, let me know. We have to make an appointment for you, which is not a big deal. But if it’s convenient for you and you want to do that, we’ll get you set up for an appointment because that all takes place in Annapolis. It’s very convenient and close. It’s just in another building with another entity that does it. So if you’re interested in that, let me know. We’ll get you set up for a photograph and get you your ID cards issued as well. That’s it, Mr. Chair.

Chairman Alan Silverstein: You’re muted. You’re on mute, sir. Oh, you’re on mute. You’re still muted.

Chairman Alan Silverstein: I was going to say the advantage of that is going through security, and it expedites that process. So I’d encourage you to do that. Do we have any new business?

Unidentified Speaker: Can you hear me?

Chairman Alan Silverstein: We can hear you.

Unidentified Speaker: Oh, okay. No new business. Scared me for a minute there. Do we have any other new business at this time? If not, I take a motion for adjournment.

Unidentified Speaker: I’ll move.

Eric Morett: Second, Morett.

Unidentified Speaker: Second by Miss Buck. All those in favor signify by saying aye.

All Commissioners: Aye.

Chairman Alan Silverstein: Opposed, same sign. I want to thank everybody who has sat in on the meeting. If anybody wants to participate or has any information that’s germane, please get with Mr. Kelly for the next agenda. Thank you all very much. We’ll see you next month.

Unidentified Speaker: Thank you.

Unidentified Speaker: Thanks, guys.

Unidentified Speaker: Thank you

 May 19, 2022

Disclaimer: Transcripts are generated and may contain errors, including typos or misinterpretations of the spoken content, and may not follow the video content precisely. While we strive for accuracy, please verify critical information independently.

Commissioner Morat: Here.

Commissioner Robert P: Here.

Chairman Alan Silverstein: Here. I need a motion for approval of the April 21, 2022, meeting minutes.

Unidentified Speaker: I’ll move.

Commissioner Eric Morrissette: Second.

Chairman Alan Silverstein: All those in favor signify by saying aye.

All Commissioners: Aye.

Chairman Alan Silverstein: Opposed, same sign. Motion carries. Field enforcement directory report, Mr. George.

Mr. Bill George: Good afternoon, Mr. Chair. Thank you. For those on the meeting that are unfamiliar with me, my name is Bill George. I’m the director of the field enforcement division for the Alcohol and Tobacco Commission. We’ve been very busy since the last meeting.

As far as the enforcement effort goes, we’ve had eight violations that we’ve discovered working in the field. Our agents, three of which were alcohol violations exclusively, four of which were tobacco violations, and then the eighth violation was one that included both alcohol and tobacco violations. We discovered and investigated violations in a variety of different jurisdictions, which include Baltimore City, Prince George’s County, Cecil County, Harford County, Washington County, Anne Arundel County, and Montgomery County.

As a result of those investigations, our agents seized quite a bit of contraband product. That would include 4,220 packs of contraband cigarettes, 938 sticks of contraband other tobacco products, 143 containers of contraband hookah tobacco, 14,940 containers of contraband chewing tobacco and snuff, 222 containers of distilled spirits, 496 containers of wine, and 1,073 containers of beer.

These investigations also resulted in criminal charges being placed against 10 individuals. The charges ranged from transportation of both untaxed cigarettes and other tobacco products, possession of untaxed cigarettes and other tobacco products, alcohol sales without a license, and possession of untaxed alcohol products.

One of the highlights of this past month since the last meeting was our collaboration with the partners that we work with. That collaboration and partnership ranged in levels from providing support such as security during the execution of a search warrant to full operational support. Our strongest partners in just about all of our efforts are the agents and inspectors of the Comptroller Field Enforcement Bureau.

This month, along with other agencies, we had the support from the Baltimore City Police Department, the Prince George’s County Police Department, the Montgomery County Police Department, Maryland State Police, the Maryland Transportation Authority Police, and liquor board members from Baltimore City, Montgomery County, and Anne Arundel County.

One of the more pressing and ongoing investigative efforts we’ve been working on has been a, it continues to be ongoing, so while speaking in general terms, we’re working with the Baltimore City Police Department and the liquor board in the city, offering the expertise of our agents in both surveillance techniques and the enforcement of unlicensed sales of alcoholic beverages. That particular operation opened up for us the weekend of Friday, the 22nd of April, and I’m pleased to say that on that opening weekend, we were able to impact the problem that was being addressed in a positive way by carrying out an enforcement action that involved charging two individuals and a seizure of contraband alcoholic beverages.

It seems to have set the tone for the problem in the area. It’s continued since that point, and things are going well, and the ATC as a viable exceptional partner. I’m happy to say that our inspection goals as an agency of retailers of alcohol and tobacco products have exceeded our goals by the end of April.

So basically, in short, we have met all of our goals for doing our retail inspections. Anything past the end of April is going to be exceeding the goals even further and I’m sure will yield a plethora of additional enforcement action. In addition to both the inspection and enforcement action, our regulatory administrative services bureau works through a renewal period for the statewide alcohol and tobacco licenses.

In the interim between the last meeting and this meeting, those licenses expired after April 30th. As a result, I’m happy to say that our licensing unit has 619 of those licenses active and renewed for the 2022-2023 license cycle. There are still 128 licenses that continue to be pending renewal for a variety of different reasons, and we’re working through those.

Also, over in the administrative services side, the research and administrative support unit has prepared a feasibility study that’s due to the governor’s office and the General Assembly for final editing. The study is to assess the feasibility of maintaining a statewide database of all the alcoholic beverage licensees and to update that annually, and a database of individuals trained and licensed by an authorized alcohol awareness training program. I estimate by the time we meet again, that feasibility study will be complete and sometime in the interim, you will be presented with it. The commission will. That is all I have unless there are any questions.

Chairman Alan Silverstein: The only comment I would have, and I think fellow commissioners would echo it, we think the staff is doing an outstanding job meeting and exceeding those goals, and we know it’s due to the leadership on all levels. We thank you all very much for what you’re doing on behalf of the Alcohol and Tobacco Commission.

Mr. Bill George: Thank you, Mr. Chair. I appreciate that. I’ll yield back to you, Mr. Chair.

Chairman Alan Silverstein: Okay. We’re going to have a legal and legislative report. Tom?

Tom: Thank you, Mr. Chair. Prior to me beginning, I see that Roman numeral two on the agenda is approval of the April 21, 2022, minutes. I don’t know if the commission had an opportunity to approve those minutes. I just don’t want to necessarily skip an agenda item. I’ll defer to you.

Chairman Alan Silverstein: I think we did approve those minutes.

Tom: Those were okay. Sorry, I apologize.

Chairman Alan Silverstein: Thank you for trying to keep us on track.

Tom: I’m going to now share my screen. I apologize if there’s a delay. I am much more Zoom-oriented, but I’m going to go ahead. Can everyone see my screen right now?

All Commissioners: Yes.

Tom: Great. I’m going to go through these materials. This is essentially all of the alcohol, tobacco, cannabis, and legislation that was passed or did not pass this past legislative session. I’ll also provide an update to the commission on our alcohol compliance bulletin, our COMAR update, and our MOU update. Please bear with me and we will go through all of these items.

First, we’ll jump into alcoholic beverage legislation. The first bill that passed, and it had actually been introduced a number of times, was House Bill 7, Senate Bill 772, and House Bill 324. This bill requires that a study be conducted by the Governor’s Office of Small, Minority, and Women-Owned Businesses for the purposes of gauging minority participation in the wineries, distilleries, and breweries industry. This bill had been introduced three times prior and it just didn’t get across the finish line. This year it did. The Alcohol and Tobacco Commission will be involved in the study. I believe the process starts at the beginning of the new fiscal year and we’ll keep the commission abreast of any developments with the study.

Senate Bill 476 and House Bill 550 was an extension of the direct shipping ability of Maryland’s breweries, distilleries, and wineries. If you recall, during the COVID-19 pandemic, there was a Governor’s executive order which granted the ability to do direct shipping from the manufacturer to the customer during the pandemic. Once the executive order was rescinded, there was legislation passed in 2021 which allowed for the shipping privilege to continue until the end of this year, this calendar year. This legislation extended it out until June 30, 2022.

The next bill is Senate Bill 569 and House Bill 924. This is a very nuanced bill dealing with Maryland wineries. Most generally, Maryland wineries have to use at least 51% of their grapes or grape juice used in the manufacturing of wine from Maryland. If they can’t meet that threshold, they have to get a waiver, and they’ve extended the deadline for the waiver until 2024. Senate Bill 594 and then we’ll cover Senate Bill 698 and House Bill 854 together. Senate Bill 594 creates the Winery and Vineyard Economic Development Grant Program. Essentially, this is a new fund for wineries to recuperate some of the capital investment costs they are either going to outlay in the future or they’ve already outlaid. It requires the Department of Commerce to come up with criteria and guidance on awarding these monies.

Senate Bill 698 and House Bill 854 creates a new commission and reconstitutes a current commission, the Maryland Alcohol Manufacturing Advisory Commission, formerly called the Advisory Commission on Maryland Wine and Grape Growing. This commission used to provide information to the Director of Agriculture as to whether or not certain thresholds were met so that wineries could get a waiver for that 51% rule. This bill includes wineries, breweries, and distilleries and creates a fund to issue grants to nonprofits and local jurisdictions to promote the winery, brewery, and distillery industries. This could be tours, information to grape growers on how to grow certain strands of grapes or barley for breweries. It’s a pretty interesting grant program, and we’ll see how it plays out after July 1. The Alcohol and Tobacco Commission will be part of recommendations to the Department of Agriculture.

House Bill 1253 was a cleanup bill. As part of House Bill 1052 passed in 2019, the powers formerly held within the Comptroller’s Office and the field enforcement division were transferred over to the Alcohol and Tobacco Commission. While that first piece of legislation dealt with a lot of alcohol and tobacco laws, there are still quite a few Alcohol and Tobacco laws which need to be amended to ensure that the appropriate powers and authority are with the Alcohol and Tobacco Commission. So House Bill 1253 was a part of that, taking some tobacco regulations and putting them within the ambit of the Alcohol and Tobacco Commission. It also allows the Alcohol and Tobacco Commission to enter into MOUs, particularly the office of the executive director with other agencies, state and federal, in order to continue to enforce alcohol and tobacco regulations and state laws.

Here are some statewide bills just briefly that didn’t pass. There was another grocery bill, and for those of you who are not familiar, there’s been a push in the legislature the last couple of years to have a conversation to allow grocery stores to sell beer and wine. We had a couple of bills dealing with that, House Bill 506 and House Bill 858. They did not make it out of committee. They did not receive favorable reports. Another bill was Senate Bill 793, the ready-to-go cocktails. You see them at your local liquor store. They are like the margarita in a can. Currently, those are taxed at spirit levels, which are $1.50 per gallon. The industry wanted to have this product taxed at the beer rate, which is essentially 40 cents per gallon. That did not come out of committee, so this is still an ongoing conversation.

Some local bills that did not pass. There was a bill in Montgomery County that would have awarded a Class D beer and wine license, a retail license to a Class 8 farm brewery. It would have allowed the farm brewery to sell other people’s beer and wine, and that was looked at as something that was undermining the three-tier system. In Washington County, there was House Bill 1117, which would have allowed retail establishments, B licenses, C licenses, D licenses to buy from other retailers. This would wholly undermine the three-tier system. That was defeated as well.

Tobacco-related legislation. There was no major tobacco-related legislation that passed the General Assembly this year. There were a few bills out there that would have allowed local jurisdictions to regulate the sale and distribution of cigarettes and electronic smoking devices, but those bills died in committee. There was one that would have allowed local jurisdictions across the state, one that would have allowed this privilege in Baltimore City, and then in Prince George’s County, there was some other legislation introduced late in the session that would have limited other tobacco product licenses from being issued specifically in Prince George’s County.

Now, on to the cannabis-related legislation. House Bill 1 is a constitutional amendment that is going to be before the voters this November 2022. It asks a simple question: Do you favor the legalization of the use of cannabis by an individual who is at least 21 years of age on or after July 1, 2023, in the state of Maryland? If that referendum passes, then we come back to House Bill 837, which kicks off a lot of other things. There are funds created by this piece of legislation, amendments to the criminal law article dealing with penalties for possession of cannabis, some tax write-offs for 2022, and it requires a number of studies to be conducted by the Maryland Medical Cannabis Commission.

There is a section in the uncodified language which requires the Maryland Medical Cannabis Commission and the Alcohol and Tobacco Commission to conduct a study on how the Maryland Medical Cannabis Commission comes under the ambit of the office of the executive director of the Alcohol and Tobacco Commission. I want to thank Will Tilburg, the executive director of the Maryland Medical Cannabis Commission. We’ve met with that organization twice already and are set to meet again next week to have an ongoing conversation as instructed by the legislature to see how we combine those organizations and make recommendations to the legislature. That recommendation is due by January 2023.

Some other statewide bills that did not pass. Senator Feldman’s bill created a regulatory structure and taxing structure for cannabis contingent on the passage of the constitutional amendment. It did not pass, but some recommendations made it into House Bill 837. Senator Carter and Delegate Moon’s bills would have been straight legalization and created a structure for taxing and regulation, but they did not pass. The conversation on cannabis is postponed, and we will have a fuller conversation on taxing and regulation in 2023 if the constitutional amendment is approved by voters.

I’ll now move on to the alcohol compliance bulletin. This past Monday, we issued Alcohol Compliance Bulletin 22001. Before the constitution of the Alcohol and Tobacco Commission, the field enforcement division of the Comptroller’s Office used to issue advisories, releases, and bulletins on tobacco and alcohol-related matters. We are carrying over that structure, rebranding it, and renaming it. Specifically, this bulletin provides interpretive guidance to stakeholders on regulations. It’s one thing to read a regulation, but we want to make this information as accessible as possible.

In our most recent bulletin, we looked at social media and the usage of social media by wholesalers and solicitors to the benefit of retailers, differentiating between promoting the product and promoting the retail establishment. Wholesalers and solicitors cannot give something of value prohibited by state law or relieve a retailer of an ordinary business expense. Creating a social media template or an advertisement for a retailer is in violation of the rules. This bulletin aims to maintain balance in the marketplace.

If there are no questions about the bulletin, I’ll move on to the COMAR update. The Alcohol and Tobacco Commission and the Comptroller’s Office have been working diligently together to recodify regulations in the name of the Comptroller to the Alcohol and Tobacco Commission. We worked with the head of law and policy for the Comptroller, Krista Surman, and we are in the final processes before submitting them to the Division of State Documents for publication in the Maryland Register. Later in the year, we will look at updating rules and regulations concerning electronic smoking devices, other tobacco products, and social media use.

Finally, the MOU update. In 2020, the legislature passed Senate Bill 911, authorizing the Alcohol and Tobacco Commission and the Comptroller’s Office to enter into an MOU for sharing information, personnel, and resources. Our current MOU with the Comptroller’s Office ends on June 30, 2022. We are drafting an amended document with minor changes due to the passage of House Bill 1253. Once reviewed by the Attorney General and Comptroller’s Office, we will present it to the commission for final review and signature.

Does anyone have any questions?

Chairman Alan Silverstein: Any new business?

Unidentified Speaker: No new business.

Chairman Alan Silverstein: Thank you for an excellent presentation. Thank you, Mr. George, for stepping in today for our executive director. Commissioner Morat, Commissioner Robert P, thank you for making a quorum. We look forward to seeing everyone next month. I need a motion for adjournment.

Unidentified Speaker: Motion.

Unidentified Speaker: Second.

Chairman Alan Silverstein: All those in favor signify by saying aye.

All Commissioners: Aye.

Chairman Alan Silverstein: Motion carried. Thank you all. Have a great month.

June 16, 2022

Disclaimer: Transcripts are generated and may contain errors, including typos or misinterpretations of the spoken content, and may not follow the video content precisely. While we strive for accuracy, please verify critical information independently.

Commissioner Morrissette: Here.

Commissioner Wahl: Here.

Chairman Alan Silverstein: Here. I need a motion for approval of the May 19, 2022, meeting minutes.

Unidentified Speaker: I’ll move.

Commissioner Morrissette: Second.

Chairman Alan Silverstein: All those in favor signify by saying aye.

All Commissioners: Aye.

Chairman Alan Silverstein: Opposed, same sign. Motion carries. Field enforcement director’s report, Bill.

Mr. Bill George: Thank you, Mr. Chair. Good afternoon, Commissioners and everyone else who’s on the meeting. It’s an honor to speak with you this afternoon. We’ve had a very active period since our last meeting.

Our enforcement agents working in the field have discovered 14 separate violations since that meeting. Eight of which were in retail inspections, one was an inspection of a statewide alcohol permit holder, one was an out-of-state surveillance operation that resulted in a violation, and four separate surveillance operations that revealed street vendors of alcoholic beverages. There were six alcohol violations and eight tobacco violations.

The jurisdictions where these violations were discovered include Baltimore City, Baltimore County, Prince George’s County, Garrett County, and Montgomery County. As a result, our agents seized 294 packs of untaxed cigarettes, 55,783 sticks of other tobacco products, and seven containers of distilled spirits. These violations resulted in investigations that led to 15 separate individuals being charged with criminal violations ranging from possession of untaxed cigarettes and other tobacco products, alcohol sales without a license, to possession of alcoholic beverages from other than a wholesaler in a retail establishment.

In addition to the inspection and enforcement activities, our regulatory administrative services bureau licensing unit issued 187 licenses and permits since our last meeting. We have also been busy preparing a new application for remote tobacco sellers’ licenses. The application is in a final approved state and is currently in the Comptroller’s forms group for final adjustments. It will soon be available online. The license cycle is new and will begin July 1st.

Last month, I spoke of a feasibility study that we were working on and was due to the Governor’s office and the General Assembly. I expected to have it to you prior to or be able to present a version of it to you during this meeting, but due to staffing issues with key members involved in the production of that being out on extended sick leave, it’s not complete. However, that particular feasibility study looks at the feasibility of maintaining a statewide database of all alcoholic beverage licenses to be updated annually and a database of individuals trained and licensed by authorized alcohol awareness training programs. I hope to have the final version to you soon.

As far as enforcement goes and the activities of our administrative services bureau, that’s it for me. If you have any questions, I’m glad to entertain them.

Chairman Alan Silverstein: What is a remote tobacco seller’s license?

Mr. Bill George: It is a license now required for anyone who wants to sell premium tobacco, pipe tobacco, or premium cigars into the state from out of state. Previously, it could be done but didn’t require this license. We are requiring a license now and some other tax implications relative to that, which the Comptroller’s office is requiring. But for a business to sell into the state from out of state those products, the premium cigar and the pipe tobacco, there’s now a license required.

Unidentified Speaker: I had a quick question to that as well. Is that regulatory or legislative?

Mr. Bill George: That particular license was created by legislation and goes into effect July 1st, 2022.

Chairman Alan Silverstein: Thank you. You’re welcome.

Chairman Alan Silverstein: Legal and legislative director report, Tom?

Tom: Thank you, Mr. Chair. Members of the commission, just very quickly to give the commission an update. If you recall, I discussed last meeting House Bill 837 which required the Alcohol and Tobacco Commission and the Maryland Medical Cannabis Commission to work together to create recommendations for the structure of an agency if the legislature intends to take the Maryland Medical Cannabis Commission and put it under the Alcohol and Tobacco Commission. The study is due at the end of December 2022. We are making some headway and some progress, and when we put things down to paper, we will share with the commission some of the preliminary findings that we’ve made in cooperation with the Maryland Medical Cannabis Commission. We’re not at that stage yet; we’re early in the discussions, but we just want to let the commission know those discussions are ongoing and will continue throughout the summer.

The next matter is the rules and regulations update. As the commission was made aware last month, the Alcohol and Tobacco Commission representatives, the office of the executive director, his staff, as well as the head of law and policy from the Comptroller’s office, have been working together over the last couple of months to do a recodification of the current COMAR regulations that are in the name of the Comptroller but actually pertain to the Alcohol and Tobacco Commission that does those actual things in terms of monitoring trade practices within the Alcohol and Tobacco industry. We’ve recodified that language and submitted it to the Attorney General’s office for review. It’s currently being reviewed right now. We should have a final stamp of approval within the coming weeks. At that time, we will submit those draft rules and regulations to the division of state documents for approval and publication in the Maryland Register.

This part one is just a recodification. Part two will be building out something more robust, where the Alcohol and Tobacco Commission hasn’t necessarily addressed areas like electronic smoking devices, other tobacco products, alcohol awareness, and tweaks that we could see in the rules and regulations. But that’s more of a second half of the year task. The first half of the year is just to ensure that we get these COMAR regulations in the name of the Alcohol and Tobacco Commission so that our authority to regulate in these matters is clear.

If anybody has any other questions, I’ll move to the next matter.

As to Commissioner Morrissette’s question raised at the last meeting regarding shelf stocking, we had talked about bulletins and things that the agency does, and we specifically discussed shelf stocking and we would discuss that specific issue at today’s meeting. I created a very quick PowerPoint presentation to roll through just to give more information to the board and stakeholders regarding shelf stocking. If nobody has any preliminary questions, I’ll move on to share my screen.

Can everybody see my screen?

All Commissioners: Yes.

Tom: Great. We’re going to talk about wholesaler-retailer relationships, services to a retailer, shelf management, and then finally shelf stocking. The law is clear on the prohibitions between wholesalers and retailers, as stated in 23-315 of the Alcoholic Beverages Article. It restricts a wholesaler from having a financial interest in a licensed retail establishment and prevents the wholesaler from giving a thing of value, a gift, or a gratuity to a retailer. The retail dealer also cannot accept or receive a gift or advertisement provided by a wholesaler. This rule aims to maintain a fair playing field in the marketplace.

Shelf management concepts and programs benefit the licensed retailer in marketing all of the retailer’s products. These include data provisions on sales, shelf management plans, designs, and schemes. Wholesalers can provide written plans, create diagrams and blueprints, and provide sales information. However, they cannot implement these plans or physically participate in stocking or rearranging shelves.

Shelf stocking is different from shelf management. A wholesaler is strictly prohibited from stocking shelves, pricing items, and arranging products. They may rotate products to ensure freshness but cannot open cases, place individual bottles on shelves, or rearrange alcoholic beverages in storage and sales areas. The exceptions are for beer, malt beverages, wine coolers, and spirit coolers due to their limited shelf life. Wholesalers can dust their own products but cannot use dusting as a guise for stocking shelves.

Does anybody have any questions?

Commissioner Morrissette: Can we make this presentation available on our website?

Tom: Yes, we are working on our website and will include this presentation as part of our educational information for stakeholders and citizens of Maryland.

Unidentified Speaker: Thank you, Tom. That was very thorough. This is a tough subject in our industry. Large retailers try to push distributors around to make us do this, and we appreciate these rules and regulations because it stops us from being pushed around and keeps things fair for the smaller liquor stores.

Randy: Tom, this was a great presentation. One question that might come up is regarding wine vintages. Sometimes you’ll have a 2022 vintage on the shelf but a 2021 vintage behind it. Can wholesalers rotate these products to ensure the correct vintage is visible?

Tom: That’s a great question. The rules currently allow for rotation of beer, malt beverages, wine coolers, and spirit coolers due to limited shelf life. This exception has not traditionally been applied to spirits and wine. Wholesalers can provide shelf management plans to retailers, advising them on how best to rotate these products. The distinction is that products with a specific expiration date can be rotated by wholesalers, but other products like wine should be managed by the retailer’s staff.

Chairman Alan Silverstein: Thank you. Any other questions or comments?

Unidentified Speaker: No additional questions.

Chairman Alan Silverstein: New business. The memorandum of understanding for FY 2022. Each of the Commissioners received a copy of the MOU among the Comptroller of Maryland, the Alcohol and Tobacco Commission, and the Executive Director of the Alcohol and Tobacco Commission. This MOU lays out the roles and responsibilities, how equipment is shared, and how everything is moved through COMAR and the legislation created in 2019. If there are no questions, we need to approve it, and I need to put my signature on it. I ask for a motion to approve the MOU.

Unidentified Speaker: So moved.

Unidentified Speaker: Second.

Chairman Alan Silverstein: All those in favor signify by saying aye.

All Commissioners: Aye.

Chairman Alan Silverstein: Opposed, same sign. Motion carries. I will sign this and get it over to you, Tom. Thank you. Any other matters to bring before the commission?

Tom: The Comptroller’s office is in its final stages of review of the MOU, and it was approved by the Attorney General. If there are any changes, I will let you and the commission know.

Chairman Alan Silverstein: Motion for adjournment?

Unidentified Speaker: So moved.

Unidentified Speaker: Second.

Chairman Alan Silverstein: All those in favor signify by saying aye.

All Commissioners: Aye.

Chairman Alan Silverstein: Opposed, same sign. Thank you all for joining us. See you next month.

Unidentified Speaker: Thank you. Have a good one.

Unidentified Speaker: Thank you.

July 21, 2022

Disclaimer: Transcripts are generated and may contain errors, including typos or misinterpretations of the spoken content, and may not follow the video content precisely. While we strive for accuracy, please verify critical information independently.

Chairman Alan Silverstein: It is now 3:00. We’re going to open the meeting with a roll call. We’ll start with Commissioner Buck.

Commissioner Buck: Here.

Commissioner Morrissette: Here.

Commissioner Robert P.: Here.

Commissioner Wahl: Here.

Chairman Alan Silverstein: Here. I need a motion for approval of the June 21, 2022, meeting minutes.

Unidentified Speaker: I’ll move.

Commissioner Morrissette: Second.

Chairman Alan Silverstein: All those in favor signify by saying aye.

All Commissioners: Aye.

Chairman Alan Silverstein: Opposed, same sign. Motion carries. We have Mr. George with us today substituting for the executive director. You want to start off with the enforcement activity, sir?

Mr. Bill George: Thank you, Mr. Chair. I’ll be glad to do that. Good afternoon, Commissioners and all attendees. It’s been, as usual, very active for our field operations bureau, our officers out in the field doing inspection and enforcement.

During the period since our last meeting, they discovered 13 separate violations. Twelve of which came as a result of retail inspections of both alcohol and tobacco retailers. One was an undercover purchase of alcohol from an unlicensed establishment that resulted in the execution of a search warrant. One of those inspections escalated to a second search as a result of a search warrant of a vehicle parked on the curtilage of a business. There were two alcohol violations and eleven tobacco violations.

The jurisdictions where our enforcement activity occurred include Baltimore City, Prince George’s County, Anne Arundel County, Allegany County, Washington County, and Wicomico County. They yielded a plethora of different contraband products including 3,210 packs of untaxed cigarettes, 97,519 sticks of untaxed other tobacco products, 54 containers of infused distilled spirits with fruit juices in pouches, 61 containers of distilled spirits, 190 containers of beer, and 24 containers of wine. These investigations resulted in 15 individuals being charged with various criminal violations ranging from possession of untaxed cigarettes and other tobacco products, selling other tobacco products at retail from a source other than a licensed wholesaler, and alcohol sales without a license.

Additionally, our regulatory administrative services bureau has been active during this period. Since the last meeting, we’ve been renewing our direct wine shipping permits and our common carrier permits. We’ve renewed 1,041 of those. Additionally, we’ve issued 246 other licenses during that period. They also published a training and information advisory that went out through the gov delivery system, and it was the first of this fiscal year, so it’s numbered 23001. That went out on Friday, the 15th. It was due to multiple inquiries from the alcohol industry seeking guidance and asking questions about our class six limited wine wholesalers license and our class seven limited beer wholesalers license. It provided clarification of the privileges and limitations of both licenses along with identifying other commonly observed trade practice violations among those license types.

The gov delivery system is an interesting method of getting it out to subscribers that are interested, whether they’re in the industry or any interested parties. It allows us to track the percentage of deliveries that are successful and the number of subscribers who open the attachment. This particular advisory went out Friday afternoon fairly late in the day. As of about an hour ago, it was 99% successful in the deliveries and 37% of the subscribers opened the attachment. I was hoping it would be higher, but it’s 37% at this point.

Our executive team has continued to meet as a work group with the Maryland Medical Cannabis executive team. The report is due to the General Assembly. The report details recommendations from both agencies on how we can effectively combine ensuring operational efficiency without negatively impacting pay, benefits, rights, and pensions of the employees. It’s due in December of this year, and we’re running ahead of schedule. The report will be done well in advance of the due date.

Our executive team here at the Alcohol and Tobacco Commission was invited by one of the state Maryland-licensed industry members within the medical cannabis industry for a presentation and a tour. Myself and my colleagues Tom Akras and Jeff Hann took a tour. This particular licensee has a license as a grower, manufacturer, processor, and dispensary. They have all three classes of the license. They took us through a very informative presentation and tour of all three facilities. It was fascinating and impressive with their commitment to quality control within all three facilities and the integrity of their brand and product lines. I look forward to the challenge ahead if we become their regulators. It was truly an eye-opening experience.

I have some new business to discuss. Our office has been contacted by a representative of the University of Maryland. They were looking for guidance regarding their development of a fermentation science program that will have classes such as viticulture, enology, brewing, distilling, and corresponding sensory analysis labs. The guidance they were looking for was whether there might be a workaround or exception to allow students under 21 years of age in those classes or labs to essentially “sip and spit” alcoholic beverages without consuming them as part of the curricula. My colleague Tom Akras conducted thorough research on that request and prepared a comprehensive response. Essentially, there is no exception to the law, and it would be unlawful to do what they want to do in the classroom at this point. That type of exception exists in other parts of the country. Our executive team feels this would be a great opportunity for the commission to get involved, potentially working with the University of Maryland on legislation that could create such an exception or simply weigh in.

Mr. Chairman, that is all I have. I’ll yield back to you unless you have any questions.

Chairman Alan Silverstein: Let’s discuss the new business right now, please.

Mr. Bill George: Our office has been contacted by a representative of the University of Maryland regarding their development of a fermentation science program. They wanted guidance on allowing students under 21 years of age in those classes or labs to “sip and spit” alcoholic beverages as part of the curricula. My colleague Tom Akras researched this request and found that there is no exception to the law, and it would be unlawful. An exception exists in other parts of the country, and our executive team feels this is an opportunity for the commission to get involved.

Mr. Kelly and I have discussed this, and we believe all five commissioners can react to whatever is proposed and drafted by our staff and then make a recommendation. If that is okay with the rest of you.

Commissioner Morrissette: Yes, I agree.

Chairman Alan Silverstein: Thank you. Any other questions or comments?

Unidentified Speaker: No additional questions.

Chairman Alan Silverstein: Any new business?

Unidentified Speaker: No new business.

Chairman Alan Silverstein: Motion for adjournment?

Unidentified Speaker: So moved.

Unidentified Speaker: Second.

Chairman Alan Silverstein: All those in favor signify by saying aye.

All Commissioners: Aye.

Chairman Alan Silverstein: Opposed, same sign. Thank you all for joining us. See you next month.

Unidentified Speaker: Thank you.

Unidentified Speaker: Thank you.

 August 18, 2022

Disclaimer: Transcripts are generated and may contain errors, including typos or misinterpretations of the spoken content, and may not follow the video content precisely. While we strive for accuracy, please verify critical information independently.

Chairman Alan Silverstein: It is now 3:00. We’re going to open the meeting with a roll call. We’ll start with Commissioner Buck.

Commissioner Buck: Here.

Commissioner Morrissette: Here.

Commissioner Robert P.: Here.

Commissioner Wahl: Here.

Chairman Alan Silverstein: Here. I need a motion for approval of the July 21, 2022, meeting minutes.

Unidentified Speaker: I’ll move.

Commissioner Morrissette: Second.

Chairman Alan Silverstein: All those in favor signify by saying aye.

All Commissioners: Aye.

Chairman Alan Silverstein: Opposed, same sign. Motion carries. We have Mr. George with us today substituting for the executive director. You want to start off with the enforcement activity, sir?

Mr. Bill George: Thank you, Mr. Chair. I’ll be glad to do that. Good afternoon, Commissioners and all attendees. It’s been, as usual, very active for our field operations bureau, our officers out in the field doing inspection and enforcement. During the period since our last meeting, they discovered 13 separate violations. Twelve of which came as a result of retail inspections of both alcohol and tobacco retailers. One was an undercover purchase of alcohol from an unlicensed establishment that resulted in the execution of a search warrant. One of those inspections escalated to a second search as a result of a search warrant of a vehicle parked on the curtilage of a business. There were two alcohol violations and eleven tobacco violations.

The jurisdictions where our enforcement activity occurred include Baltimore City, Prince George’s County, Anne Arundel County, Allegany County, Washington County, and Wicomico County. They yielded a plethora of different contraband products including 3,210 packs of untaxed cigarettes, 97,519 sticks of untaxed other tobacco products, 54 containers of infused distilled spirits with fruit juices in pouches, 61 containers of distilled spirits, 190 containers of beer, and 24 containers of wine. These investigations resulted in 15 individuals being charged with various criminal violations ranging from possession of untaxed cigarettes and other tobacco products, selling other tobacco products at retail from a source other than a licensed wholesaler, and alcohol sales without a license.

Additionally, our regulatory administrative services bureau has been active during this period. Since the last meeting, we’ve been renewing our direct wine shipping permits and our common carrier permits. We’ve renewed 1,041 of those. Additionally, we’ve issued 246 other licenses during that period. They also published a training and information advisory that went out through the gov delivery system, and it was the first of this fiscal year, so it’s numbered 23001. That went out on Friday, the 15th. It was due to multiple inquiries from the alcohol industry seeking guidance and asking questions about our class six limited wine wholesalers license and our class seven limited beer wholesalers license. It provided clarification of the privileges and limitations of both licenses along with identifying other commonly observed trade practice violations among those license types.

The gov delivery system is an interesting method of getting it out to subscribers that are interested, whether they’re in the industry or any interested parties. It allows us to track the percentage of deliveries that are successful and the number of subscribers who open the attachment. This particular advisory went out Friday afternoon fairly late in the day. As of about an hour ago, it was 99% successful in the deliveries and 37% of the subscribers opened the attachment. I was hoping it would be higher, but it’s 37% at this point.

Our executive team has continued to meet as a work group with the Maryland Medical Cannabis executive team. The report is due to the General Assembly. The report details recommendations from both agencies on how we can effectively combine ensuring operational efficiency without negatively impacting pay, benefits, rights, and pensions of the employees. It’s due in December of this year, and we’re running ahead of schedule. The report will be done well in advance of the due date.

Our executive team here at the Alcohol and Tobacco Commission was invited by one of the state Maryland-licensed industry members within the medical cannabis industry for a presentation and a tour. Myself and my colleagues Tom Akras and Jeff Hann took a tour. This particular licensee has a license as a grower, manufacturer, processor, and dispensary. They have all three classes of the license. They took us through a very informative presentation and tour of all three facilities. It was fascinating and impressive with their commitment to quality control within all three facilities and the integrity of their brand and product lines. I look forward to the challenge ahead if we become their regulators. It was truly an eye-opening experience.

I have some new business to discuss. Our office has been contacted by a representative of the University of Maryland. They were looking for guidance regarding their development of a fermentation science program that will have classes such as viticulture, enology, brewing, distilling, and corresponding sensory analysis labs. The guidance they were looking for was whether there might be a workaround or exception to allow students under 21 years of age in those classes or labs to essentially “sip and spit” alcoholic beverages without consuming them as part of the curricula. My colleague Tom Akras conducted thorough research on that request and prepared a comprehensive response. Essentially, there is no exception to the law, and it would be unlawful to do what they want to do in the classroom at this point. That type of exception exists in other parts of the country. Our executive team feels this would be a great opportunity for the commission to get involved, potentially working with the University of Maryland on legislation that could create such an exception or simply weigh in.

Mr. Chairman, that is all I have. I’ll yield back to you unless you have any questions.

Chairman Alan Silverstein: Let’s discuss the new business right now, please.

Mr. Bill George: Our office has been contacted by a representative of the University of Maryland regarding their development of a fermentation science program. They wanted guidance on allowing students under 21 years of age in those classes or labs to “sip and spit” alcoholic beverages as part of the curricula. My colleague Tom Akras researched this request and found that there is no exception to the law, and it would be unlawful. An exception exists in other parts of the country, and our executive team feels this is an opportunity for the commission to get involved.

Mr. Kelly and I have discussed this, and we believe all five commissioners can react to whatever is proposed and drafted by our staff and then make a recommendation. If that is okay with the rest of you.

Commissioner Morrissette: Yes, I agree.

Chairman Alan Silverstein: Thank you. Any other questions or comments?

Unidentified Speaker: No additional questions.

Chairman Alan Silverstein: Any new business?

Unidentified Speaker: No new business.

Chairman Alan Silverstein: Motion for adjournment?

Unidentified Speaker: So moved.

Unidentified Speaker: Second.

Chairman Alan Silverstein: All those in favor signify by saying aye.

All Commissioners: Aye.

Chairman Alan Silverstein: Opposed, same sign. Thank you all for joining us. See you next month.

Unidentified Speaker: Thank you.

Unidentified Speaker: Thank you.

September 15, 2022

Disclaimer: Transcripts are generated and may contain errors, including typos or misinterpretations of the spoken content, and may not follow the video content precisely. While we strive for accuracy, please verify critical information independently.

Chairman Alan Silverstein: Chairman Silverstein is here, so we have a quorum. We can start the meeting. We’re going to start with approval of the August 18, 2022 meeting minutes. Are there any additions or corrections to the minutes?

Unidentified Speaker: If not, I’d accept a motion.

Commissioner Buck: So moved.

Commissioner Wahl: I’ll second.

Chairman Alan Silverstein: Commissioner Buck moved, Commissioner Wahl seconded. All those in favor signify by saying aye.

All Commissioners: Aye.

Chairman Alan Silverstein: Opposed, same sign. Motion carries. Executive director’s report, Mr. Akras?

Mr. Tom Akras: Thank you, Mr. Chair. I’m just going to switch screens. We’re going to go to the PowerPoint. Can everybody see my screen?

All Commissioners: Yes.

Mr. Tom Akras: Okay, great. In our license and permitting division, just a quick executive report on the regulatory administrative Services Bureau. Since our last meeting, the regulatory administrative Services Bureau has issued 55 licenses and/or permits. We also mailed out over 5,300 renewal coupons for permit year 2023. The permit period, just for the commission, is from November 1st to October 31st. These permits include the non-resident dealer permits, the solicitor permits, and the public transportation permits. We talk about three individuals doing a lot of the work here. This is just another example of the hard work that our men and women in the Licensing Division do each and every day for us.

Next, we’re going to move on to the field operations Bureau. I wanted to put to scale exactly the work that our investigators and agents are doing out there. Since our last meeting, there have been 12 incidents and investigations that resulted in criminal charges against 13 defendants. These instances included random retail inspections, targeted inspections that resulted from complaints received, an investigation and a subsequent search warrant of an unlicensed retailer of both alcohol beverages and tobacco products. The contraband included 5,153 pieces of untaxed other tobacco products. This includes cigars and containers of pipe tobacco and 2,726 packs of cigarettes. Seized alcoholic beverages included 2,586 containers of beer and 785 containers of wine. These incidents occurred in Baltimore City, Baltimore County, Frederick County, Washington County, and Prince George’s County.

5,153 sticks is a large number for the time period and it just goes to show the field operations Bureau continues to be on track and meet and exceed established goals. If none of the Commissioners have questions, I can move on to the Maryland code and COMAR update.

Unidentified Speaker: Was that large amount at that one place in Prince George’s County a liquor store? Was it an actual store?

Mr. Tom Akras: On August 28, 2022, or August 31st, the 16,000—oh, sorry—the 16,000 wine. This was the search warrant of an unlicensed retailer of alcohol and tobacco products. So this was an individual that did not have a license but was selling without a license.

Unidentified Speaker: Okay, that’s a good question.

Mr. Tom Akras: Do any other Commissioners have any other questions for me?

Chairman Alan Silverstein: Okay, I’ll move on to the next update. There’s a reason why there are people celebrating on the left-hand side of this PowerPoint slide. As the commission knows, this year, the ATC, along with the Comptroller’s office, took on the task of rewriting the rules and regulations that currently are vested with the Comptroller and transitioning them over to the Alcohol and Tobacco Commission. We submitted a copy of our proposed rules and regulations to the Administrative Executive and Legislative Review Committee on or about August 18, 2022. We were preliminarily informed that we got the okay. Just today, we received verification from the Division of State Documents that our rules and regulations are slated for publication on October 7, 2022. This means, give or take, middle of December, we’ll have final publication of our rules and regulations and we’ll be able to move forward with the authority that the legislature wanted us to have when they passed House Bill 1052.

Does anybody have any questions about that?

Chairman Alan Silverstein: After the publication of these rules and regulations, when does this take effect?

Mr. Tom Akras: That’s a good question, Mr. Chair. On October 7, the rules and regulations will be published. There will be a 30-day period for public comment, followed by another set of days for review of public comment and decision whether to incorporate or not those comments into the rules and regulations. After that time period, and this is why I’m saying estimated is December, there will be the final publication and the issuance of the rules and regulations. So, first publication for public comment October 7, final publication rules in hand, we have the ATC authority middle to end of December. Does that answer your question?

Chairman Alan Silverstein: Yes, it does. Thank you.

Mr. Tom Akras: If there are no further questions, I’ll move on to new business. This is a first for the ATC. It’s the Alcohol Tobacco Commission’s Alcoholic Beverage Summit of 2022. As per Executive Director Kelly, he wanted to have a summit where we get all stakeholders around the table to voice their opinions and their concerns regarding some of the rules and regulations that we currently have now in the books. We always talked about the rewrite of the rules and regulations being a two-step process. The first step is transferring the authority from the Comptroller to the Alcohol Tobacco Commission. The next step is to modernize our rules and regulations. There are certain issues when it comes to credit control, trade practices, delivery, technology, and advertising where we’ve heard a lot of comments and concerns raised by individuals in the industry, members of the retail faction, members of the hotel faction, just stakeholders across the board.

Through this summit, it’s our goal to come up with an agenda that outlines the topics that I mentioned and hear the concerns and the issues raised by these stakeholders. This will inform us when we go back to the drawing board and start to write out some proposed rules and regulations that can address some of the modernization issues that some stakeholders have raised. There is a link on our website, and I have the link up here right now. It’s actually a live active link on our website where you can go to an AT Summit page. In the next week, we’re going to populate that link with an agenda and some other documents related to the summit. If there are any questions specifically about the summit, we have an email address that we’ve created. It’s down at the bottom of your screen, ATCSummit2022@MDc.gov. We ask that you would email any of your questions or concerns specifically about the summit to that email address. Both Jeff Hann, the assistant director of the Legal Legislative Division, and myself will have access to that email and will be responding appropriately. The meeting is going to be open to the public. It’ll be a public link. All you will need to do is click on the link and you’ll be able to access the Teams meeting. We’re excited to have this event. We want to hear from our stakeholders and this is going to help us be a better agency in terms of hearing the questions and concerns and those informing the next steps when it comes to our rules and regulations.

Do you have any questions, Commissioners, about this matter?

Unidentified Speaker: You’ll be sending us an email with all that information and providing us with the link so we can download the information prior to?

Mr. Tom Akras: Sure, sure, sure. We will be sending out something to the commission with the agenda and all the materials that I mentioned. They’ll also be available on our website as well.

Unidentified Speaker: Good, great. Thank you. Next item?

Mr. Tom Akras: The next item is the Advisory Commission on Alcohol Manufacturing. Just as a heads up to the commission, House Bill 854, Senate Bill 698 passed this legislative session and it created the Advisory Commission on Maryland Alcohol Manufacturing within the Department of Commerce. This commission replaced the Governor’s Advisory Commission on Maryland Wine and Grape Growing. This commission does a few new things. It provides oversight of the Maryland Alcohol Manufacturing Promotion Fund, which is a fund to promote the alcoholic beverages industry in the state of Maryland. It helps address issues relevant to the growth of the alcoholic beverage industry and identify strategies to facilitate the growth of viticulture, which means cultivation of grape vines and other products. So, it’s a commission that advises the Department of Commerce on these issues. It also provides consultation to the Secretary of Agriculture on whether or not to grant certain exemptions for class four limited wineries in terms of those wineries that may not have access to 20 acres of farmland or may not be able to get 51% or more of their juice from Maryland-grown grapes.

The commission itself was prior to this change in law something else. It is now something new, but in both cases, the prior commission and this commission, there was always a representative from the Field Enforcement Division with the Comptroller’s office and now with the Alcohol and Tobacco Commission. When this agency separated from the Comptroller’s office, what we would ask the commission today is to nominate an individual from the Alcohol and Tobacco Commission to sit and represent the ATC on the Advisory Commission on Maryland Alcohol Manufacturing. On the previous commission, Executive Director Kelly was the representative for the Comptroller’s office. Is that not correct?

Executive Director Kelly: That is correct.

Unidentified Speaker: I think it would be great for Jeff to continue doing it. He’s got the knowledge and he knows the players and it would be best for us, I think, for him to do it.

Commissioner Wahl: I concur with you, Commissioner.

Chairman Alan Silverstein: That sounds good to me. I will take a motion that we nominate Executive Director Kelly to represent us on the Advisory Commission on Maryland Alcohol Manufacturing. I need a motion for that.

Unidentified Speaker: So moved.

Unidentified Speaker: Second.

Chairman Alan Silverstein: I have a motion and a second. All those in favor signify by saying aye.

All Commissioners: Aye.

Chairman Alan Silverstein: The ayes have it. Please congratulate Executive Director Kelly.

Mr. Tom Akras: I will, and we will forward Executive Director Kelly’s name to the Department of Commerce as the ATC’s representative on this commission. Does anybody else who is on this call have any business to bring before the commission?

Chairman Alan Silverstein: I just want to remind everybody our next regular meeting date is October 20th at 3:00. I would take a motion for adjournment.

Unidentified Speaker: So moved.

Unidentified Speaker: Second.

Chairman Alan Silverstein: All those in favor signify by saying aye.

All Commissioners: Aye.

Chairman Alan Silverstein: Motion carries. Good afternoon, ladies and gentlemen, and thank you for joining us.

Unidentified Speaker: Thank you.

Unidentified Speaker: Thank you.

October 20, 2022

Disclaimer: Transcripts are generated and may contain errors, including typos or misinterpretations of the spoken content, and may not follow the video content precisely. While we strive for accuracy, please verify critical information independently.

Chairman Alan Silverstein: Alan Silverstein is on board. Vice-chair Barbara Wahl is here with us and secretary Robert Poole, so we have a quorum. We’re going to open the meeting, and the first thing we’re going to do is ask for approval of the September 15, 2022, meeting minutes.

Barbara Wahl: I agree.

Commissioner Morrissette: Barbara makes a motion. I’ll second the motion.

Chairman Alan Silverstein: All those in favor signify by saying aye.

All Commissioners: Aye.

Chairman Alan Silverstein: Opposed, same sign. Motion carries. Mr. Executive Director?

Mr. Tom Akras: Thank you, Mr. Chair. I appreciate that. Since our last meeting in September, there have been 13 people charged in 10 different incidents of a variety of alcohol and tobacco violations. These occurred in Garrett County, Prince George’s County, Anne Arundel, Montgomery, and Worcester counties, and Baltimore City. The totals of our seizures were 45,659 pieces of other tobacco products, 944 packages of contraband cigarettes, and 53 containers of spirits.

Regarding our licenses and permits, since our last meeting, we’ve issued 58 new licenses or permits, and October 31st is the date on which all of our general permits expire and must be renewed for November 1st. So far, of all the permits set to expire at the end of the month, 938 have renewed, and 3,841 are pending renewal.

Also, in the interim since our last meeting, we held our Alcohol Summit, and I know several of you were there, Mr. Chair and Mr. Secretary, as well as Mr. Hawk. We appreciate everybody attending that. Just to give you a sense of how successful we think it was, we had about 115 attendees, and what’s really significant about that is this thing was scheduled to last for two hours. It lasted for nearly two hours, and we had an overwhelming majority of people stay on for the whole two hours. I think there was a lot of interest, and we hit the mark. We have a lot of work to do now because this group gave us a lot of things to consider. We’re boiling that down into a few topics that we think we can actually do some work on, and we’re going to publish that list of topics within the next two weeks. We will solidify the selection of the workgroup moving forward. I expect that to be around maybe 10 to 12 people, hopefully manageable and small enough that we can actually get something done. It will be a cross-section of representation among the various industries, regulators, and a couple of at-large positions for people who aren’t necessarily affiliated in some other way but have a real desire to have some input or at least hear what’s going on.

The last thing I’d like to report on is our agency reports. Specifically, this is one that the Maryland General Assembly mandated that the Maryland Medical Cannabis Commission and the Alcohol and Tobacco Commission get together and put together a report that combines our two agencies. I’m going to do something that I haven’t done in over a year or more, and that is try to share my screen. Bear with me, and I apologize in advance for how I’m sure I’m not going to get it right, but I’m going to try because I’d like to show you this. Just this past Tuesday evening, a workgroup of the Maryland General Assembly got together to start work on cannabis, not just the medical cannabis element but consideration of adult-use cannabis should the population of Maryland approve House Bill One in the referendum on adult use.

Bear with me. I’m going to give this a shot. I make no promises.

How about now?

All Commissioners: Yes, you’re good.

Mr. Tom Akras: I accidentally got it. Great. I’m not sure if I can get back out of it again, so it might be up for a while. I’m going to go through a few slides rather quickly because all the slides aren’t going to be that important. I’ve highlighted some key points.

In House Bill One, the General Assembly stated it’s their intent that, should the citizens of Maryland pass the referendum, the Executive Director of the Alcohol and Tobacco Commission will be the successor agency. This means the Maryland Medical Cannabis Commission, as we know it, won’t exist and it will all be part of the Alcohol and Tobacco Commission.

We had a series of meetings to discuss how this merger would work. We’ve met 12 times, the most recent and last time being a week ago this past Tuesday to finalize the report. We knew we had until the end of this calendar year to get the report done, but when the General Assembly indicated they were going to meet sooner, we felt pressure to get this out well in advance of our deadline. I’m glad we started working on it early. We took into consideration all the people, equipment, and needs of both agencies.

One of the mandates was to try and find operational efficiencies. There are some things we can merge and others we can’t. We’ll keep our office space in the Treasury Building in Annapolis and the MMCC will keep its office space near the airport for now.

One point of the merger is to ensure all printed materials, letterheads, and business cards are used up before ordering new ones with the merged agency’s name.

This is what our proposed organizational chart would look like. The executive director’s position is at the top. The Field Enforcement Division, led by Bill George, will remain largely intact. The Legal Legislative Division, led by Tom Akras, will also stay intact, with assistant attorneys general from the Cannabis Commission moving into this area. The Public Health and Business Operations Division will handle procurement, HR, finance, communications, and research.

A new division, the Cannabis Regulatory Enforcement Division, will be the current Cannabis Commission moved over in its entirety, with some functions merged into the Public Health and Business Operations Division. This structure allows for uninterrupted service on day one and a period to implement any changes gradually.

There are a few areas we couldn’t combine yet, like enforcement, as our agents are sworn officers with police powers, while the Cannabis Commission’s inspectors are civilians. We might need our sworn officers to assist in some instances.

Laboratories are another area. We use the Comptroller’s Motor Fuel Lab in Jessup for alcohol testing. The MMCC uses private labs and is building a reference lab for cannabis testing.

IT services are currently separate, with us using the Comptroller’s office and the MMCC using the Department of Information Technology. We’ll figure out a way to merge these later if appropriate.

Quality assurance is more of an issue for the Cannabis Commission as they handle calls from patients and providers, which isn’t something we deal with.

That’s the end of the presentation. Now I can stop sharing. Thank you for indulging me in that long report.

Chairman Alan Silverstein: Thank you. I had the opportunity to sit in on a session, and I was very impressed with the professionalism of our staff and their staff. Hopefully, the legislature will accept it and move forward with it.

Next, we have the MDH Deputy Director report.

Dana: Hi everyone. It’s Dana. My camera isn’t working, so I guess that’s not me right now. I just wanted to provide an update. We had a great meeting with Jeff and his team last week. We were able to talk through several of the inspections and enforcement issues with tobacco retailers. We’ll be partnering moving forward.

We have three levels of inspections: FDA, Sinar, and local Health Department. The FDA contract requires us to conduct enforcement inspections across the state with underage purchasers. The Sinar program, linked to the Behavioral Health Administration, requires randomized inspections statewide. Local Health Departments conduct enforcement and educational visits. If a retailer is found to have multiple violations, they are referred to the ATC for a hearing, which can lead to license suspension or revocation.

We’re hearing that violation rates are high, so we need to get back out there to educate retailers. There is confusion about flavored electronic smoking devices. The FDA banned flavored pod-based devices except for tobacco and menthol. The ATC expanded that to include all flavored disposable products. We need to provide additional education and work with Jeff and his team to include this information in the bulletin.

If anyone knows of any underage purchasers willing to assist us, please pass along their names. They get paid, and it’s a contractual position through the department.

Chairman Alan Silverstein: Thank you, Dana. Do we have any new business to discuss today? If not, I’d make a motion for adjournment. I need a second, please.

Robert Poole: Second.

Chairman Alan Silverstein: All those in favor signify by saying aye.

All Commissioners: Aye.

Chairman Alan Silverstein: Motion carries. Thank you all for participating. See you next month.

Unidentified Speaker: Thank you.

Unidentified Speaker: Thank you.

November 17, 2022

Plug in microphones and speakers, and life is good. I agree. Worst case scenario, we do what we did last time where I was typing in, which is not ideal, so I’m happy.

The legislation passed, so it’s a bit of a different world now. I was at a legislative meeting yesterday, and Senator Eard said she was at a budget meeting. There’s a $7 billion surplus right now, which is interesting. It’s different from the old days when we talked about deficits, so there’s a lot of opportunity.

Are you getting admittance popping up on your screen? No? I keep admitting people. You’re the head of the whole show; it’s good to be here. You’re doing a fine job. Thank you. Let me know when you want to take over. I had my minute in the sun; it was glorious and enough.

I was telling people yesterday I got my first deer of the season, unfortunately with my wife’s car at 6:30 in the morning, coming back from BWI. You probably weren’t in the frame of mind for that at the time. Just driving along in a little Mini Cooper, and it jumps over the rail, hits the door, and slides to the front. Was the deer bigger than the car? It was, but we’re going to get it fixed.

Jeff, you’re on mute. Hi Jeff. Good afternoon, everybody. Good to see you. Good to see you too.

I think I came in on the end of a deer story. I took my daughter-in-law to the airport at 3:30, and on the way back at 6:30, a buck jumped over the rail and into the side of my wife’s Mini Cooper. I talked to the insurance company today; they’re going to cut me a check, and we’re going to fix it. I was able to drive it home, but it’s a 2005 with 43,000 miles. I didn’t want to lose that.

It’s worth much more than you’d get for it. The guy said it was worth $6,900, so they’re going to pay out, and we’re going to use some used parts. Life will be better. Ken said she wanted to be buried in that car, so we have to take care of it.

Are we expecting the usual folks? Yes. There’s Eric. Hey Eric, welcome. Good to see you. Mr. Co, how are you? Good to be seen. Do we know if Betty Buck is going to join us? I think she was a yes. We’ll wait a minute or two.

Good afternoon, everyone. This is Jim Hawk. I apologize for my voice; I have my first cold since 2019. As long as it doesn’t come over the internet, I’m happy. I caught it from my wife and son.

It’s 3 o’clock, so we’re going to start the meeting with a roll call. Chairman Silverstein, present. Vice Chair Barbara Wall, present. Commissioner Eric Morset, present. Commissioner Robert P, present. Commissioner Betty Buck, are you with us yet? All right, we have a quorum. I need a motion for approval of the October 20, 2022, meeting minutes. I’ll motion to approve. Second. All those in favor signify by saying aye. Aye. Opposed? Same sign.

Mr. Kelly, thank you, Mr. Chair. Good afternoon, everybody. For the record, I had verification that Betty would be attending today, so I expect she may be on briefly.

Just a quick rundown of what’s happened since we last met. We had nine different incidents over the period of the month. We do a lot more than nine things, but something that rises to the point of getting a case number is significantly fewer. We had nine incidents last month, and one right before airtime in Cecil County on I-95. That’s not counted in that group; we’ll talk about that next month.

All incidents were tobacco-related; we had no alcohol violations this month. We seized over 28,000 sticks of other tobacco products and 180 packs of unstamped cigarettes.

Regarding reports, we’re in the middle of completing a couple. One is our annual alcohol and tobacco tax report. It’s the repository of almost all significant data, including stats, facts, and figures. This includes a separate report from each of the breweries, outlining their production and sales. This report is due on December 1st. Another report, in conjunction with the Department of Health, is to see the impact of the governor’s executive orders expanding privileges for the alcohol industry, focusing on economic and health impacts. We’re in the final phases of completing it, due by the end of the year.

Lastly, we had a small role in a report on minority participation in the alcohol industry. We provided contacts and information to the Governor’s Office of Small, Minority & Women Business Affairs.

That’s the extent of my report for this month. New business: I have to pay attention to politics. We had an election last week, and a variety of things will happen. We’re getting a new governor, and I expect at some point we’ll be contacted by a transition team member to discuss the future of the ATC. Also, of great significance was the referendum created by House Bill 1 last year, which supports the legalization of adult-use cannabis for people over 21. By about 65%, Maryland citizens passed that referendum, requiring the General Assembly to create policies and laws to implement it.

House Bill 837, which started addressing some policy issues, indicates that if House Bill 1 passes, the Maryland Medical Cannabis Commission would fall within the office of the executive director of the Alcohol and Tobacco Commission. This doesn’t happen immediately, but the intent is clear. With that, I’d like to introduce Mr. Will Tilberg, the executive director of the Maryland Medical Cannabis Commission, to give us a primer on what his commission does.

Thank you, Jeff. Good afternoon, everybody. I have some slides to assist. If I can share my screen…

Sure, go ahead.

Alright, thank you, Will. I just want to say I had an opportunity to sit in on a session where your commission met to discuss personnel reallocation. I was very impressed with the professionalism on both sides and the quality of the report. Thank you, Jeff, for everything Tom did on our behalf. Any comments or questions?

Yes, first of all, I apologize for being late. I struggled to get on Teams. I know nothing about cannabis, so any educational materials would be appreciated.

Absolutely, happy to help. As for THC quantity limits, there is ongoing debate about what’s safe to include in products. Presently, our medical program has limits on THC in edibles. We recommend similar caps for adult use, but it’s up to the General Assembly. We are also looking at tying taxation to THC levels.

Have there been studies on the efficacy of the claims made by manufacturers, and are there any adverse indications?

Medical claims can’t be made without FDA-level data. Clinical trials can’t be performed due to cannabis being a Schedule I substance. There is growing evidence that cannabinoids like THC and CBD are effective for chronic pain and PTSD, but specific product claims are not supported by clinical trials.

I’m happy to share our medical cannabis starter kit and keep this conversation going.

Thank you, Mr. Tilberg. How can we get involved in the Research and Education Committee?

The committee is part of our commission, but there’s also the Public Health Advisory Council created in January. They will solicit public comment on a wide range of issues. Email me at william.tilberg@maryland.gov for more information.

Any other questions?

I have one, Will. You mentioned the monthly dosage limit. How is that tracked?

It’s tracked in real-time through both Metric and Maryland OneStop, which patients can log into to see their remaining allotment. Dispensaries typically use third-party POS systems connected to Metric.

Thank you, Mr. Kelly. Anything else?

No, Mr. Chair, that’s all for us today.

Thank you, Will. We’ll need more information as we go forward. Legislative committees are already discussing this issue. I need a motion to adjourn.

So moved. Second. All those in favor signify by saying aye. Aye. We are adjourned. Have a great Thanksgiving.

December 15, 2022

Hello, Barbara. Hello, how are you? Good, thank you. I’m assuming you were born and raised here. Yes, I was born and raised here. I’m the only one.

Hi guys, I don’t know if you see me, but I see you. No, we don’t see you; we just see your name. Okay, it’s good to have you on board. I’ll figure it out. It’s funny.

Hello, Bill. Ah, there you are, Betty. You’re muted. Okay, I figured it out. Took me a minute. No, that’s okay. You’re better at selling beer than I am at computer savviness. It’s probably more profitable too. Yeah, I for one am good at selling beer.

Good to see you. Good to see you, Mr. P. Good to see everybody. Good to see Barbara, Betty, Eric, and of course, Mr. Chairman. Nice to have a full component today. About three more minutes, and we’ll get started.

Okay, it is 3:00. We call the Maryland Alcohol and Tobacco Commission December 15, 2022, meeting to order and open the meeting with a roll call. Vice Chair Barbara Wall, here. Secretary Robert P, here. Commissioner Eric Morett, here. Commissioner Betty Buck, here. I’m Chairman Al Silverstein. I ask for approval of the November 17, 2022, minutes. Need a motion. So moved. Okay, Barbara. Second. Robert P. Commissioner P seconded the motion. All those in favor signify by saying aye. Aye. Opposed? Same sign. Motion carries.

Executive Director’s report, Mr. Kelly. Good afternoon, Mr. Chair and Commissioners. We’ve had another good period of time since our last meeting. We had eight incidents that we charged someone on: six relative to tobacco products and two for alcohol.

Our seizures for the month were significant as well. With other tobacco products, nearly 58,000 pieces were seized, and over 12,300 packs of cigarettes. The tax hit to Maryland on that is $3.75 per pack, totaling over $46,000 in tax loss since we last met on cigarettes alone.

Regarding beer, wine, and spirits, we seized 333 containers of beer, 10 containers of wine, and 38 containers of spirits. We took these actions in Cecil County, Montgomery County, Baltimore City, Prince George’s County, and Frederick County. Another sizeable seizure will be reported next month as we finalize the numbers.

In terms of licensing and permits, we’re still in the permit renewal period, not licensing period. Our new system, operating for the last couple of years, is working well, sometimes too well. Previously, people renewing permits filled out a four-page application every year. Now, they get a single piece of paper with a coupon at the bottom. This system is efficient but often suspends incomplete documents. We had about a thousand in suspension last meeting, requiring significant human hours to resolve.

Reports we’re working on include the annual alcohol and tobacco tax report, which is in final review stages. We are verifying information and waiting for a few counties’ violation data. The report is typically 40-50 pages long, filled with facts and figures.

Another report that will get national attention is about ready-to-drink (RTD) products. This includes beer-based, wine-based, and spirit-based drinks. Last year, there was interest in changing the tax rates for these products. We were charged with studying what other states are doing. The report is nearly complete but needs more information on the financial impact of tax changes in other states. We aim to complete it by the year’s end.

We aim to keep our database updated. Local boards send us monthly updates on retail licensees. We’ve taken control back from the controller’s office to ensure reliability. Currently, all but two jurisdictions are on board. The database will be live with accurate information soon.

The credit control list ensures retailers make timely payments to wholesalers. If a retailer fails to pay, they are listed and can only make cash payments until the debt is settled. This system was previously unreliable but is now up-to-date, barring two jurisdictions, which we expect to resolve by the month’s end.

I hope to bring a public health expert next month to provide a 101-type lecture, which I found insightful. She will explain public health responsibilities related to our commission. If not next month, we aim for February.

Mr. Chair, that’s it.

Alright, can you hear me? Yes, perfect. I had one question about the RTD report. When will it be done, and will it baseline our revenue and compare it to other states? The report is due December 31st. We’re asking for an extension to gather more fiscal impact data from other states, though we aim to complete it on time.

Who benefits from charging the wine rate for a distilled spirit? Beer is taxed at 8 cents a gallon, wine at 40 cents, and spirits at $1.50. Taxing the entire 12-ounce container of an RTD spirit at the spirits rate is the issue. It’s a complex subject, and we’re treading carefully to support the General Assembly’s decisions.

Thank you, Jeff. Any new business? If not, I want to wish everyone a happy holiday.

Dana Monroe from the Maryland Department of Health, you had a question? Yes, Jeff, is the retailer tracking system just for alcohol retailers or for tobacco as well? It’s for alcohol retailers only.

Thank you. If no further business, happy holidays to everyone.