Deep Dive: Cannabis and the Community Reinvestment and Repair Fund, Part One

Since Maryland’s adult-use cannabis market launched in July 2023, cannabis tax revenue has become a growing source of funding for state priorities. Among the most significant investments under the state law is the Community Reinvestment and Repair Fund (CRRF), which directs a portion of cannabis revenue to communities disproportionately impacted by the enforcement of past cannabis laws.

For counties, the CRRF represents a new and evolving source of State funding channeled through local governments, but one that comes with specific statutory requirements around eligible uses, local planning, public engagement, reporting, and administration.

Introduction: What is the Community Reinvestment and Repair Fund (CRRF)?

The Community Reinvestment and Repair Fund was established as part of Maryland’s Cannabis Reform Act of 2023, following voter approval of adult-use cannabis legalization in 2022. The Fund is intended to address the long-term effects of disproportionate enforcement of cannabis prohibition. State law directs CRRF resources toward community-based organizations and initiatives serving low-income communities and areas disproportionately impacted by cannabis enforcement.

The Maryland General Assembly specifically found that cannabis enforcement had varied across jurisdictions and racial groups and that disparities in arrests, prosecution, and incarceration had contributed to economic, public health, and social consequences in affected communities. The CRRF was established as one mechanism for addressing those consequences through reinvestment.

The CRRF is funded primarily through Maryland’s adult-use cannabis tax revenue. The Fund also receives cannabis business conversion fees and other money accepted for its benefit.

The Fund is not a statewide grant program in which counties compete against one another. Instead, the state determines each jurisdiction’s share, and the money is distributed to counties, including Baltimore City, for local administration and reinvestment. The counties may not use the funds for their own services ore programs, but instead must follow State guidelines on distributions to certain areas and nonprofits.

From the Office of Social Equity (OSE):

Jurisdictions are required to pass ordinances that define how CRRF dollars will be spent, and OSE supports this process by providing oversight, sharing best practices, and equipping both residents and local leaders with the tools they need to turn public investments into meaningful, measurable impact. Through this collaborative approach, we help ensure that cannabis tax revenue drives lasting progress in the communities most harmed by the war on drugs.

The Office of Social Equity (OSE) provides statewide oversight and guidance, while local jurisdictions are responsible for determining how their allocations are used within the parameters established by state law.

Legalizing Cannabis and Creating the CRRF:

The Community Reinvestment and Repair Fund was established as part of Maryland’s initial legislative framework for adult-use cannabis, even before voters formally approved legalization. In the 2022 legislative session, the General Assembly passed HB 1, proposing a constitutional amendment to legalize adult-use cannabis. If approved by voters, the amendment would authorize individuals age 21 and older to use and possess cannabis beginning July 1, 2023, while directing the General Assembly to establish a regulatory and taxation framework for cannabis.

That same session, lawmakers passed HB 837, which established the framework for adult-use cannabis contingent on voters’ approval of the constitutional amendment. HB 837 addressed the regulation, distribution, possession, use, and taxation of cannabis and included the creation of the Community Reinvestment and Repair Fund.

Under the original 2022 legislation, the Fund was established to provide resources to community-based organizations serving communities identified as having been most impacted by the disproportionate enforcement of cannabis prohibition before July 1, 2022.

The legislation provided (page 48):

(2) THE PURPOSE OF THE FUND IS TO PROVIDE FUNDS TO COMMUNITY–BASED ORGANIZATIONS THAT SERVE COMMUNITIES DETERMINED BY THE OFFICE OF THE ATTORNEY GENERAL TO HAVE BEEN THE MOST IMPACTED BY DISPROPORTIONATE ENFORCEMENT OF THE CANNABIS PROHIBITION BEFORE JULY 1 , 2022.

Maryland voters overwhelmingly approved Question 4 during the November 8, 2022, general election, amending the Maryland Constitution to authorize adult-use cannabis for individuals age 21 and older. With voter approval in place, Maryland’s adult-use cannabis framework took effect, and recreational cannabis became legal in Maryland on July 1, 2023. The Community Reinvestment and Repair Fund, a central component of Maryland’s cannabis policy, also went into effect on July 1, 2023. The Fund has since been further refined through legislation in subsequent sessions, including changes to its administration, eligible uses, local planning, and oversight.

Breakdown of the Funding:
Source: Office of Social Equity
Source: Office of Social Equity

Maryland initially imposed a 9 percent state sales tax on adult-use cannabis and then increased the sales tax to 12% in July of 2025. Per statute, 35 percent of the proceeds are allocated to the Community Reinvestment and Repair Fund, to support communities disproportionately affected by prior cannabis prohibition enforcement.

Current law directs the Comptroller to distribute the CRRF funds to counties based on percentages determined by the Office of Social Equity. The allocation is based on the proportion of cannabis possession charges between July 1, 2002, and January 1, 2023 attributable to each county compared with the statewide total. This is why a county’s CRRF allocation does not necessarily correspond with its population or the amount of cannabis tax revenue generated by local dispensaries.

As previously covered by MACo and published in the Office of Social Equity’s 2023 Survey Results for the CRRF, the table below shows the CRRF allocations by jurisdiction based on a 20-year proportion of cannabis possession charge data.

Source: Office of Social Equity

 

Every single county has received funding as distributed by the Comptroller’s office.

The Office of Social Equity conducted a survey again in 2024 and shared the CRRF distributions by county:

Source: Office of Social Equity
Source: Office of Social Equity

 

The distribution formula produces significant variation across jurisdictions. Baltimore City has the largest allocation at approximately 30.6%, followed by Baltimore County at 15.3% and Prince George’s County at 11.4%. Smaller allocations range from 0.4% in Garrett County to roughly 1–3% in a number of other jurisdictions.

Part 2 of this article will explain how counties can spend the Fund, the legislative changes since the original passage, what the current status and developments of the CRRF are, and what’s next for counties.

This article is part of MACo’s Policy Deep Dive series, where expert policy analysts explore and explain the top county policy issues of the day. A new article is added each week – read all of MACo’s Policy Deep Dives.