Adult-use cannabis sales in Maryland generated more than $18 million in tax revenue during the second quarter of 2025. Yet counties, which shoulder the brunt of zoning, public safety, and health responsibilities tied to cannabis businesses, saw only a fraction of those dollars flow back into local budgets.
Maryland taxes adult-use cannabis at 9%, rising to 12% on July 1 under legislation passed during the 2025 General Assembly session. But only a small share — 5% — of this revenue is distributed to Maryland counties, based on local collections. Counties then split that funding with municipalities that host cannabis dispensaries.
In practice, this means that for a $100 cannabis purchase, the State collects $12 in tax, but the county retains only about 60 cents — often less once municipalities take their share.
According to the Comptroller of Maryland, in the second quarter, the State directed $4.29 million from cannabis sales to the general fund and $3.0 million to the Community Reinvestment and Repair Fund. Counties, by contrast, received just $429,085, and they must split even that amount with municipalities that host dispensaries.
That small local return stands in sharp contrast to the significant responsibilities counties bear in managing cannabis businesses. Local governments handle zoning, enforcement, and public health impacts, yet they retain less than one dollar from every $100 in cannabis sales.
Other states, including New York and Oregon, dedicate a larger share of cannabis revenues to local governments through excise or sales taxes. Maryland’s counties continue to face strain as they manage these responsibilities with limited resources.
MACo will continue to press lawmakers for a more balanced distribution that reflects the essential, on-the-ground role counties play in regulating cannabis and supporting communities.
Stay tuned to Conduit Street for more information.
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