Maryland Cannabis Energy: Electricity Choice, Rates, and Utilities for Licensed Operators

How the Maryland cannabis market is structured

Maryland voters approved adult-use legalization by referendum in November 2022, and the Cannabis Reform Act of 2023 was signed May 3, 2023 [md-mca-home]. Adult-use retail sales began July 1, 2023 through converted medical licensees, while the medical program continues under the same regulator [md-mca-home]. The Maryland Cannabis Administration licenses and oversees the industry; the Alcohol, Tobacco, and Cannabis Commission handles enforcement [md-mca-home].

As of MCA's January 2026 briefing to the Senate Finance Committee, the state counted 187 operating cannabis businesses: 23 growers, 27 processors, 109 dispensaries, plus labs, transport, security, and green-waste firms [md-mca-senate-briefing-2026]. The 2023 CRA licensing round selected 205 applicants by lottery and issued 192 conditional licenses across standard and micro growers, processors, and dispensaries [md-mca-senate-briefing-2026]. MCA had converted 20 of those to final licenses in the prior ten months and expected 60 or more additional openings through October 2026 [md-mca-senate-briefing-2026].

Two features matter for energy buying:

• Growers are cultivating well below allotted canopy. Indoor flowering canopy fell from about 1.53 million sq ft in 2023 to about 781,000 sq ft in 2025 against a 1.13 million sq ft maximum within current footprints [md-mca-senate-briefing-2026]. Many facilities carry electrical service sized for load they are not running yet.
• The lottery pipeline is still energizing. Capital, property, and local zoning bottlenecks mean utility service applications and rate-class decisions are happening now for facilities that will not harvest for another year [md-mca-senate-briefing-2026].

How electricity choice works in Maryland

Maryland restructured its investor-owned electric utilities under the Electric Customer Choice and Competition Act of 1999, with customer choice phased in by July 1, 2000 [md-pua-7-505]. The Maryland Public Service Commission regulates the market, licenses competitive electricity suppliers, and oversees Standard Offer Service procurement [md-psc-electricity] [md-psc-sos].

Every customer of BGE, Pepco, Delmarva Power, and Potomac Edison may buy supply from a PSC-licensed supplier; the utility delivers the power and bills for distribution [md-psc-sos]. Customers who do not shop receive SOS at prices set through PSC-regulated competitive bids [md-psc-sos]. Non-residential SOS splits into Type I for small commercial accounts as defined by each utility's rate schedules, Type II for other non-residential accounts with a PJM peak load contribution under 600 kW, and hourly priced service for larger accounts priced on the PJM market [md-comar-20-52-01-02].

Residential and small commercial SOS is bid twice a year; large commercial SOS is bid quarterly [md-psc-sos]. That means the utility default price a cannabis facility compares against moves every quarter for Type II accounts and is not a fixed annual benchmark. Accounts at or above the hourly priced service threshold do not get a fixed SOS price at all [md-comar-20-52-01-02]. A large cultivation facility is effectively expected to shop.

Maryland sits entirely inside PJM Interconnection [pjm-about]. Capacity and network transmission costs in supplier quotes reflect the customer's PJM zone (BGE, Pepco, Delmarva, or APS/Potomac Edison) and peak load contribution. A fixed, index, or block-and-index contract must be read with that pass-through language in mind.

What commercial power costs in Maryland vs. the U.S.

Sector	Maryland, June 2026	U.S. average, June 2026
Commercial	16.84 cents/kWh	14.19 cents/kWh
Industrial	13.51 cents/kWh	not shown in state file

Source: EIA Electric Power Monthly, Table 5.6.A [eia-epm-5-6-a].

Maryland commercial power runs about 19 percent above the national average. The gap between the commercial and industrial averages, 3.33 cents, is mostly delivery structure and load factor. A facility with a flat, high load factor prices closer to the industrial line; a facility with spiky summer peaks pays commercial-class delivery on a high kW tag. Understanding how rate classes are assigned is the first lever; the supplier contract is the second.

The utilities and where they serve

Utility	Territory	PJM zone	Notes for cannabis operators
BGE (Baltimore Gas and Electric)	Baltimore City and central Maryland	BGE	Largest Maryland utility; Schedules G/GS under 60 kW, GL/GLP/P/T above 60 kW with demand metering [bge-segmentation]
Pepco	Montgomery and Prince George's counties	Pepco	D.C. suburbs; also serves the District under a separate tariff
Delmarva Power	Eastern Shore counties	Delmarva	Also serves Delaware under a separate tariff
Potomac Edison (FirstEnergy)	Western Maryland	APS	Historically lower capacity zone pricing than BGE and Pepco

Sources: utility tariff pages and Maryland PSC materials as listed in the state data [md-psc-electricity] [bge-segmentation].

Choptank and SMECO cooperatives also offer SOS but competitive choice there is limited in practice [md-psc-sos]. A facility's utility territory is fixed by address; there is no intra-state ISO split like Illinois has with PJM and MISO.

The Maryland commercial rate page puts delivery classes and SOS tiers side by side. Facility guides cover load shape by license type: cultivation, extraction and processing, dispensary retail, and multi-site operators.

What the climate does to a grow's bill here

Maryland runs humid subtropical to humid continental, with statewide normals of 4,563 heating degree days and 1,140 cooling degree days [noaa-cag-maryland]. Summer dew points routinely reach the upper 60s and low 70s F from June through September in central Maryland and on the Eastern Shore [noaa-cag-maryland]. For a sealed grow room that means winter envelope heat loss and a summer where HVAC removes both sensible heat from lights and latent heat from plants and humid outdoor air. The cultivation page works through peak demand in that mix.

Incentives worth knowing

• Pepco Maryland Medium and Large Business incentives. Prescriptive rebates for lighting, HVAC, variable frequency drives, dehumidifiers, and controls, plus custom incentives for measures not on the prescriptive list [pepco-md-mlb].
• Potomac Edison Energy Save Maryland business programs. Prescriptive incentives for lighting, HVAC, and refrigeration, custom building-improvement incentives, and a small-business direct install track [md-psc-empower].
• EmPOWER Maryland. Statewide utility efficiency portfolio funded by a bill surcharge, with a 2 percent annual savings goal and commercial HVAC, lighting, and demand response offerings across BGE, Pepco, Delmarva, Potomac Edison, and SMECO [md-psc-empower].

Program measure lists and budgets change each EmPOWER cycle. Confirm current eligibility with the utility program before ordering equipment.

Maryland quirks that change the advice

SOS resets on an auction calendar. Type II SOS for larger commercial accounts is bid quarterly, not once a year [md-psc-sos]. Comparing a three-year fixed supplier offer to a moving SOS benchmark requires trailing-twelve-month math, not a snapshot price.

Hourly default for the largest accounts. Accounts at or above the hourly priced service threshold pay PJM hourly prices plus adders unless they sign with a competitive supplier [md-comar-20-52-01-02]. A grow that crosses 600 kW of PJM peak load contribution is on a market-indexed default.

Canopy underutilization. Growers are not filling licensed indoor flowering canopy, which means demand charges may reflect service capacity the facility is not using [md-mca-senate-briefing-2026]. Load forecasts in supply contracts should reflect actual cultivation, not licensed maximums.

PJM capacity spikes in BGE and Pepco zones. RPM prices for recent delivery years rose sharply in the zones where most Maryland cannabis load sits [md-psc-sos]. Fixed supplier quotes that exclude capacity pass-through can look cheap until summer peak season arrives.

CRA conditional licenses and transformer lead times

The Cannabis Reform Act lottery issued 192 conditional licenses, and MCA told the Senate Finance Committee in January 2026 it expected sixty or more additional openings through October 2026 [md-mca-senate-briefing-2026]. Capital, property, and zoning delays mean many lottery winners are filing BGE or Pepco service applications months after license award [md-mca-senate-briefing-2026]. Size the transformer and primary-voltage request for flowering rooms that will energize within eighteen months, not the full licensed canopy maximum you may defer [md-mca-senate-briefing-2026]. PJM RPM capacity prices for recent delivery years rose sharply in BGE and Pepco zones — signing supply before witness test can lock in the wrong PLC assumption [md-psc-sos].

EmPOWER filing sequence before grow equipment ships

EmPOWER Maryland funds efficiency rebates through BGE, Pepco, Delmarva, and Potomac Edison business programs [md-psc-empower]. Pepco's medium and large business track pays prescriptive incentives for dehumidifiers, HVAC, and controls, with a temporary forty percent bonus on qualifying HVAC while funding lasts [pepco-md-mlb]. Submit a pre-approval application before purchasing fixtures or chillers; custom measures for horticultural lighting usually need engineering review and will not appear on a prescriptive list [md-psc-empower]. Demand-side kW cuts lower BGE GL delivery faster than kWh cuts when schedules bill on the highest thirty-minute interval [bge-segmentation].

Mapping SOS tier movement into investor models

Type II Standard Offer Service for non-residential accounts with PJM peak load contribution under 600 kW is re-bid quarterly, not once a year [md-psc-sos] [md-comar-20-52-01-02]. Accounts at or above the hourly priced service threshold pay PJM hourly energy plus adders with no fixed SOS cap [md-comar-20-52-01-02]. Finance teams reporting utility COGS to investors should split delivery demand (set by the utility tariff) from generation (either SOS auction result or supplier contract) rather than blending them into one cents-per-kWh figure [md-psc-electricity]. When indoor flowering canopy fell from about 1.53 million sq ft in 2023 to about 781,000 sq ft in 2025, many facilities still paid demand charges sized for larger energized load [md-mca-senate-briefing-2026].

APS zone grows in Frederick and western Maryland

Potomac Edison serves western Maryland in the PJM APS zone, which has historically priced RPM capacity below BGE and Pepco [md-psc-sos]. A Frederick County indoor grow on Potomac Edison Schedule follows different segmentation thresholds than a Baltimore County facility on BGE Schedule GL over 60 kW [bge-segmentation]. Multi-site operators with stores in Montgomery County on Pepco and cultivation in western Maryland on Potomac Edison need zone-specific supplier quotes because capacity and network transmission pass-through follow each meter's tag [pjm-about]. Compare Pennsylvania grower/processor loads when benchmarking Mid-Atlantic facilities under different state SOS rules [md-psc-electricity].

Where to go next on this site

• Facility guides: cultivation, extraction and processing, dispensary retail, multi-site operators.
• Procedure: how to switch electricity suppliers in Maryland.
• Numbers: Maryland commercial electricity rates.
• Background: what energy deregulation is and how demand charges work.

Maryland law and tariffs change on PSC dockets. Confirm current rules with the PSC or your advisor before signing a contract.