In July, 2026, the Department of Social and Economic Mobility (DoSEM), through its Office of Social Equity, released emergency regulations for the Community Reinvestment and Repair Fund (CRRF). The regulations establish additional requirements for counties administering and distributing CRRF funding.
In part one of MACo’s Cannabis and the Community Reinvestment and Repair Fund (CRRF) deep dive, the article explained what the Fund is and its history. Part one walked through the passage of the Cannabis Reform Act of 2023, which created the Community Reinvestment and Repair Fund (CRRF), and broke down the funding.
In part two, we explain how counties can spend the funds, the legislative changes since the original passage, the current status and developments of the CRRF, and what’s next for counties.
What Can Counties Spend CRRF Dollars On?
The Community Reinvestment and Repair Fund (CRRF) is intentionally more limited than a general-purpose local revenue source.
Under current statute, funds may be used for community-based initiatives intended to benefit low-income communities, including:
A. behavioral health crisis response services;
B. education and after–school programs;
C. truancy and absenteeism intervention programs;
D. housing and homelessness prevention initiatives;
E. transportation improvements in high–density areas that have public transportation;
F. job training and workforce development programs;
G. community child care and recreational services; and
H. programs that benefit individuals and families impacted by incarceration;
Funds may also support community-based initiatives serving disproportionately impacted areas. There are specified limitations as well. CRRF dollars may not be used for law enforcement agencies or activities, and may not supplant funding that otherwise would be appropriated for preexisting local government programs.
Legislative Changes Since the Original Passage:
As previously covered in part one, the Community Reinvestment and Repair Fund was established as part of Maryland’s Cannabis Reform Act.
During the 2025 legislative session, SB 894 strengthened oversight of the Community Reinvestment and Repair Fund (CRRF) and established new requirements for counties receiving funding. The legislation expanded the Office of Social Equity’s (OSE) responsibilities to include overseeing the fund, the appropriation of funds, and recipient training, with assistance from the Comptroller. It also clarified eligible uses of CRRF funding, including behavioral health crisis response, education, after-school programs, and housing and homelessness prevention initiatives. Counties must keep CRRF funds separate from other revenues and general funds, develop a distribution plan in consultation with stakeholders and hold a public hearing before finalizing the plan, and submit annual reports to OSE beginning October 1, 2026. The law also allows counties to use up to 15% of their annual CRRF allocation for administrative expenses associated with administering and distributing the funds, helping offset the potential costs of these new requirements.
What is the Current Status?
The Department of Social and Economic Mobility (DoSEM), through its Office of Social Equity, released emergency regulations providing additional guidance and requirements on the administration of the Community Reinvestment and Repair Fund (CRRF) by political subdivisions. The regulations took effect on July 20, 2026, and are scheduled to remain in effect through January 16, 2027. They address several areas, including fund administration, allowable administrative expenses, local CRRF commissions, public hearings and community engagement, distribution plans, reporting, and audits. In September, DoSEM hosted a webinar to answer questions about CRRF implementation and provide additional guidance to counties.
Despite these efforts, counties continue to raise concerns about the emergency regulations and the underlying statute. Key issues include the October 1, 2026, distribution-plan deadline and reporting requirement, limited local flexibility, and the administrative burden associated with planning, documentation, and oversight. The 2025 statutory changes established county reporting requirements covering the amount of CRRF funding received, the organizations funded, the methods used to solicit and select organizations, and related administrative expenses. The emergency regulations expand these reporting requirements, raising questions about the additional information counties must collect and submit. Counties have also requested clarification on eligible recipients, commission requirements, community engagement expectations, and how compliance will be evaluated.
MACo is working with the Department and the Office to share county feedback, seek clarification, and address implementation challenges. As counties continue developing processes to administer CRRF funds, resolving these outstanding questions will be important to ensuring compliance while allowing jurisdictions to respond effectively to community needs.
What’s Next?
As counties implement the new requirements, additional guidance from the Department and the Office will be important to clarify expectations and help jurisdictions meet their obligations. Counties will need to review their existing CRRF processes, determine what changes are necessary to comply with the regulations, and plan for ongoing public engagement, reporting, and financial oversight.
MACo will continue working with the Department to communicate county concerns and seek answers to outstanding implementation questions. Clear guidance and reasonable flexibility will be especially important for jurisdictions that need to establish new processes while managing funds that have already been allocated or committed.
Helpful links:
Community Reinvestment and Repair Fund Emergency Regulations
Current Statute – Community Reinvestment and Repair Fund
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.
