In October, collective adult-use and medical cannabis purchases reached nearly $90 million, just short of the $91 million total for September — which was more than double the $42.7 million total for June, before the launch of adult-use retail sales, according to the Maryland Cannabis Administration (MCA).
While overall sales of legal cannabis dipped slightly in October compared to the prior month, sales of adult-use products reached a new high.
All told, licensed retailers sold nearly $90 million in combined medical and retail cannabis products during October. A little more than a third of that ($35 million, or 39 percent) came from medical marijuana sales, while sales of recreational products totaled $55 million.
Cannabis flower was the most popular in October, with almost $55 million of cured bud sold. That was followed by concentrate sales ($24 million), infused edibles ($6 million), and non-edibles ($5 million), as well as just under $500,000 in shake or trim. Plant sales, meanwhile, totaled about $25,000.
As previously reported on Conduit Street, as of July 1, adult-use cannabis is legal under Maryland law. Nearly all existing medical dispensaries (approximately 100 locations statewide) have converted their licenses and can sell medical and adult-use cannabis products to adults 21+ with valid government identification.
The first application round for cannabis business licenses opens on November 13. More than 175 standard and micro cannabis grower, processor, and dispensary licenses available in the first round are exclusive to social equity applicants.
A social equity applicant is an applicant that has at least 65 percent ownership and control held by one or more individuals who lived or went to public school in an area disproportionately impacted by the criminalization of cannabis or attended a four-year institution of higher education in Maryland where at least 40 percent of enrollees were eligible for a Pell Grant.
As previously reported on Conduit Street, HB 556/SB 516 of 2023 imposes a sales and use tax on the sale of adult-use cannabis in Maryland. The tax rate is 9 percent of the purchase price of any product containing cannabis.
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 where rates are set and collections are overseen locally. Others have approved 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. But, 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, a new fund for local organizations that support marginalized communities.
Stay tuned to Conduit Street for more information.