Last week, Maryland Comptroller Brooke Lierman announced that the State of Maryland collected more than $14.6 million in adult-use cannabis sales tax revenue between January and March 2024, a slight increase over revenues from October through December 2023.
Adult-use cannabis and cannabis products carry a 9 percent tax. The revenue supports several funds as outlined by the Cannabis Reform Act of 2023, which legalized personal cannabis use for adults over 21. State law mandates that the Comptroller of Maryland collects and distributes the sales and use tax revenue from the retail sale of adult-use cannabis.
“The growing cannabis industry holds immense potential for economic growth for Maryland.” Comptroller Lierman said. “Reinvesting the revenue from adult-use cannabis sales into communities that were damaged by misguided policies allows us to further create a more equitable, resilient, and prosperous future for all Marylanders.”
The Comptroller of Maryland will divide quarterly revenues from adult-use cannabis among the following funds.
Community Reinvestment and Repair Fund (CRRF): The CRFF receives $4,156,888, accounting for 35 percent of quarterly revenues. These funds support community-based initiatives in areas disproportionately impacted by the enforcement of cannabis prohibition before July 1, 2022. The Office of Social Equity formulates the distribution percentages, ensuring each county receives an appropriate share of the CRRF funds.
Maryland Counties: $593,841, 5 percent of quarterly revenues, is allocated to Maryland counties based on the percentage of revenue collected from that county. Counties will then distribute 50% of funds to municipalities with cannabis dispensaries that contribute to sales and use tax revenue.
Cannabis Public Health Fund: $593,841, 5 percent of quarterly revenues, will be distributed to the Cannabis Public Health Fund to address the health effects associated with legalizing adult-use cannabis.
Cannabis Business Assistance Fund: $593,841, 5 percent of quarterly revenues, will be distributed to the Cannabis Business Assistance Fund. Through fiscal 2028, this fund will receive 5 percent of quarterly revenues to assist small, minority-owned, and women-owned businesses entering the adult-use cannabis industry.
General Fund: $5,938,412 The remainder of quarterly revenues, after required disbursements, will be allocated to Maryland’s General Fund.
Additionally, $2,794,286 will be allocated to the Maryland Cannabis Administration to support operational costs.
Local Revenue Share Smallest in the Nation
While implementation across jurisdictions has been a variable as different states have taken various approaches, one commonality is that virtually all states have empowered a meaningful local revenue source to support local services. Some have fully authorized local excise taxes, while others have authorized local sales taxes at either standardized or variable rates locally.
For example, in New York, there is both a 13 percent excise tax (9 percent state and 4 percent local) on cannabis sales (paid by consumers and remitted by retailers) and a potency-based tax (remitted by distributors). Oregon levies a 17 percent excise tax on cannabis sales paid by consumers and remitted by retailers. Local governments can also levy up to a 3 percent tax on the retail price.
While there are no local cannabis taxes in Maryland, the state does levy a 9 percent excise tax on any product containing cannabis. However, a mere five percent of state cannabis tax revenue goes to local governments. That translates to local governments receiving a mere 45 cents for a single purchase of $100 of cannabis—the smallest in the nation.
Municipalities will receive half of the local revenue share for transactions within municipal boundaries (counties will retain the other half on such transactions). In addition, 35 percent of the tax proceeds will go to the Community Reinvestment and Repair Fund.
Data Dashboard
As previously reported on Conduit Street, the Maryland Cannabis Administration launched a Medical and Adult-Use Data Dashboard. The data dashboard provides site visitors with interactive maps, sales and volume figures, and graphs that allow users to explore a wide range of data formatted in aggregate sales, licensing, and patient data.
Previous Conduit Street Coverage
My County Just Received Cannabis Funds…What’s This For, Again?
Feds Move to Reclassify Cannabis: Here’s What That Means for the Industry
Moody’s: Tax, Policy Tweaks Crucial to Unlock State Cannabis Revenues
Maryland Cannabis Administration Awards First-In-The-Nation Social Equity Business Licenses
