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.

ATCC Public Meeting #54, JUNE 2025 at 3:00pm – 2025/06/26 14:38 EDT – Transcript

Transcript

Alan Silverstein: It’s now 3:00 and I’m going to call to

Alan Silverstein: board of the Maryland Alcohol, Tobacco, and Cannabis Commission. we have Commissioner Eric Morsette, who’s our vice chairman with us. We have Robert P, who’s commissioner and secretary. I’m an I. Silverstein, chairman. So, we do have a quorum. ask for a motion to approve the May 15, 2025 mating minutes.

Eric Morrissette: I’ll move.

Alan Silverstein: All Need a second.

Robert Poole: I’ll second it.

Alan Silverstein: Have a motion, a second. All those in favor signify by saying I. Okay, the eyes have it. Mr. Kelly, it’s yours.

00:10:00

Jeffrey Kelly -ATCC-: Thank you, Mr. Chair. and kind of keeping in line with how we did things last month, I’m going to roll in some of my colleagues to help out with some of these reports.

Jeffrey Kelly -ATCC-: So, I’d like to first turn it over to Jeff Hearnen, director of field enforcement, to give us a rundown on our enforcement activities over the past month.

Jeffrey Herndon -ATCC-: Good afternoon,…

Jeffrey Herndon -ATCC-: ladies and gentlemen. last month, our agents were busy. We conducted 244 alcohol inspections throughout the state, 243 tobacco inspections, and 222 inspections for the unlicensed sales of cannabis products out of stores. Out of those inspections, it resulted in nine reportable incidents that resulted in seizures of product. With those seizures, we brought in 9,283 sticks of other tobacco products with an estimated tax loss to the state of $6,67567.

Jeffrey Herndon -ATCC-: the 392 packs of cigarettes yielding a tax loss of $1,945 and 28 gallons of alcohol yielding the tax loss of $136 on the cigarettes. our current trend is not so much of transportation through the state as it is transportation into the state. with the increase of the Maryland state cigarette tax stamp to $5, we’re finding more and more retail locations that are trying to bring in product from other states, namely the Carolinas or Virginia. And they’ve gone so far as to counterfeiting the Maryland tax stamp. so that’s what’s causing the seizures of the cigarettes that you see there.

Jeffrey Herndon -ATCC-: So that wraps up our enforcement efforts for the month.

Jeffrey Kelly -ATCC-: Thanks, Jeff.

Jeffrey Kelly -ATCC-: And to dovetail into that a little bit regarding why there’s no information on the cannabis stuff, we’re still operating under the lawsuit that occurred in Washington County a year almost two years ago now. that really severely limits our ability.  And then couple that with a lawsuit that was filed about a week ago in federal court essentially for the same thing to try and stop us from conducting certain enforcement activities. And then triple that with a lawsuit that we’ve just been served with within the past couple of days in Harford County regarding some activity that took place at a few unlicensed cannabis type places. they were selling product that’s alleged to has THC in it perhaps from some product.

Jeffrey Kelly -ATCC-: We don’t know. We were really marginally involved in that. That was really a local law enforcement issue, but nonetheless, we got picked up on that lawsuit as well. So, we’re trying to do the enforcement that we can do while still adhering to the injunction and addressing those other suits. So, we’ll see how all that fares  Having said that, July a new set of bills goes into effect across the state. And one of them is important to us, and that is one that does many things, but the big part is it requires specific labeling of products that do contain THC. and they require that these products adhere to certain protocols either in statute law or in regulation that the MCA is pretty much in charge of, but it applies to all THC products.

Jeffrey Kelly -ATCC-: So, we’ve been educating ourselves for the last two months and we’ve been educating the industry, which I think maybe is why we’ve got two new lawsuits on us as well. We’ve done a good job educating them. but so far, those lawsuits haven’t yielded any action on our part yet. But absent anything happening, July 1, effective July 1, we’ll begin our enforcement efforts to start to address what authorities a new bill gives us and address the illicit cannabis or THC market that’s in the state.  Also, you might recall that we had started in January, then we had a couple in May, either maybe April and May, where we did webinars regarding overall how alcohol works in Maryland. The second one was about manufacturing in Maryland. The third one was about wholesaling in Maryland. The fourth one is going to be on July 14th. So, by the time we next meet, we will have already done this. It’ll be how we retail alcohol in Maryland.

Jeffrey Kelly -ATCC-: So, we’ll be advertising that heavily very soon and getting some good video and interviews with practitioners in the retail side. So, that’ll be something that we’ll go live with on July 14th. I’m looking forward to that. That’s the last of our formally scheduled meetings. rather webinars. I’m not sure if we’ll have one after that. We’d like to if it works out and if there seems to be enough interest, but I’m not sure where that goes. we’ll know more after the 14th. So, what I’d like to do now is to turn it over to Andrew Waters.  As you mentioned, Andrew runs our licensing division, which also is regulation and reporting and research and everything that everything we do goes through Andrew ultimately. and this is a very busy time as they’re just kind of getting off the tail end of lice renewing our licenses for our major licenses in the state and getting ready to or midway through maybe even almost all the way through our licensing of our permitting of our direct wine shippers. So, there’s a lot happening on there, needless to say. And we kicked off our online stuff.

00:15:00

Jeffrey Kelly -ATCC-: Andrew, why don’t you take it?

ANDREW WATERS -ATCC-: That’s right. that is the biggest news of the month. June 11th, we went live with our online licensing portal. since our last meeting, we have issued new licenses and a percentage of that being through the new portal. we have received very positive feedback. we’re very excited about it. it has been hitting all the marks that we were hoping that it would hit. and we hope to improve upon it in the future. But this has been a great launch. as we move to the end of June, we’re going through our direct wine shipper renewals. these permits are both in the state and all across the United States. of our, year in yearout number of accounts sits around 1,200. as of right now, we’ve issued well over a thousand. We’re about 85% complete,…

Jeffrey Kelly -ATCC-: All right.

ANDREW WATERS -ATCC-: which only leaves a hundred or so left. which we’re hoping to wrap up in the next couple days.

ANDREW WATERS -ATCC-: We’re trying to get everybody across the finish line, but that’s all I have.

Jeffrey Kelly -ATCC-: Thank you. That’s and earlier, Andrew, we did you think it was somewhere around 25% or so of the new applicants that came through the online portal?

ANDREW WATERS -ATCC-: Within the span of about two weeks of that roughly 200 number, about 25% are all coming online. and that is different from roughly 100 renewals that have all come in through our online portal. So biggest thing is getting the word out,…

ANDREW WATERS -ATCC-: making sure that people know the resources available and then letting it

Jeffrey Kelly -ATCC-: And… that’s really the testament there.  Just to underscore that it’s been a little over two weeks and people have found that they found the portal and it’s working for them and their comments are that the payment system works well and the application system works well and I’m hoping on our back end and Andrea I’ll ask you to comment on that but on our back end our team who’s actually processing these are able to do it in some should I say without any additional burden and maybe even a little bit easier.  Yeah, that’s perfect.

Jeffrey Kelly -ATCC-: 

ANDREW WATERS -ATCC-: And I’m sorry, I wasn’t sure which Andrew you were talking to. yes, as far as the processing side, it definitely takes a lot of the manual day-to-day check, processing, scanning,…

ANDREW WATERS -ATCC-: entering into FEMs. All of these processes take a person. so paying online bypasses all of that and makes it much smoother.

Alan Silverstein: Y question.

Alan Silverstein: So, one of the meetings that I attended,…

Alan Silverstein: you talked about out of state shippers, how they used to have to go was Annapolis or Baltimore to get a license. They can go online now and do that. Is that correct?

ANDREW WATERS -ATCC-: Yes. Yeah.

ANDREW WATERS -ATCC-: Primarily I think we’re talking about public transportation. So these are trucking companies that are all across the country. they have folks traveling from state to state. Now, rather than having to physically go to our office in Baltimore, if they’re coming in from Western Maryland, they can actually just go on their phone, fill out an application,…

Alan Silverstein: That’s a great customer service. Okay.

ANDREW WATERS -ATCC-: put in their credit card, and then they have a permit that they can make their delivery with same day. So, they don’t have to go out of their way to come all the way to us. Yeah, we’re very excited about Absolutely.

Jeffrey Kelly -ATCC-: Yeah. and…

Jeffrey Kelly -ATCC-: have some of those permits been from the companies seeking transportation permits around there?

ANDREW WATERS -ATCC-: We Yep.

Jeffrey Kelly -ATCC-: That’s wonderful. Great. That’s huge. that’s been a decade or more in the wanting and making. So, that’s a big thing. That’s Great. Thank you. And I’d like to ask Andrew Garrison to jump on and talk to us about our financial position and we’re getting close to the end of the fiscal year. It’s June 30 for us and there’s just a lot going on, a lot of activity and kind of maybe Andrew wrap up where we are and how we’re starting off the next year.

Andrew Garrison -ATCC-: Thank you, Jeff. yeah, this is my second one of these. and I’m already kind of bringing some bad news to you all. so, as Jeff mentioned, our fiscal year, ends in a couple days here. Right now, in really good fiscal position, even with some of the cost containment, directives that we’ve received, from the governor’s office. obviously the state’s fiscal position is a little bit challenging right now and so all state agencies have been asked to kind of do their fair share on that. and then that leads into kind of what do we look at going into fiscal 26 which would then start July 1. and the big headline for that is there’s been a statewide reduction that was in the budget this year.

Andrew Garrison -ATCC-: Particularly on the personnel side, it’s about $120 million throughout all state agencies across all fund types. so we have a portion of that as well that we’re responsible for. the guidance that we’ve received is that any of those actions that we make to meet that target do not impact current state employees or have a minimal impact on current state employees as well as a minimal impact on sort of our critical agency operations and functions. so as we plan in 26, we’re going to try to make sure we can maintain the level of service while being responsible partners with the state and with state funds here.

00:20:00

Andrew Garrison -ATCC-: But it’s looking like a little bit of belt tightening coming forward for us.

Jeffrey Kelly -ATCC-: Great. Thank you.

Andrew Garrison -ATCC-: But I think we’re well equipped to handle that and in a really good position.

Alan Silverstein: My question is…

Alan Silverstein: if you have a current employee and they decide to leave the organization can you replace that which is known as a PIN with another employee or once that employee leaves you don’t have that PIN anymore.

Alan Silverstein: More. Okay,…

Andrew Garrison -ATCC-: It seems like it’s going to depend on kind of the nature and…

Andrew Garrison -ATCC-: the circumstances of that departure. so in particular certain public safety positions are exempted from this. so if we had someone separated from service on the field enforcement side, we’d be able to fill that immediately or as soon as possible.

Jeffrey Kelly -ATCC-: Any other questions?

Andrew Garrison -ATCC-: There would likely be some more review steps in place if it was someone on a standard position side, but we’re still waiting for some further guidance on that.

Alan Silverstein: thank you.

Jeffrey Kelly -ATCC-: There’s a lot of different topics thrown out. Mr.  Chairman, that’s it for our report.

Alan Silverstein: Okay, does anybody have any new business? If not, I’d ask for a motion for adjournment.

Eric Morrissette: motion. All right.

Alan Silverstein: Okay, need a second.

Robert Poole: I’ll second it.

Alan Silverstein: All those in favor signify by saying I.

Robert Poole: right.

Alan Silverstein: I. Motion carries.

Alan Silverstein: We will see you July 17th at 3 p.m.

Jeffrey Kelly -ATCC-: Thank you all. Bye-bye.

Jeffrey Herndon -ATCC-: Thanks. Goodbye.

Alan Silverstein: Thank you all for joining us today.

Eric Morrissette: Thank you.

ANDREW WATERS -ATCC-: Hey.

Meeting ended after 00:22:12 👋

This editable transcript was computer generated and might contain errors. People can also change the text after it was created.