Adult-use cannabis and cannabis products are taxed at a rate of 9%. Under state law, the Comptroller of Maryland is responsible for collecting sales and use tax revenue generated from the retail sale of adult-use cannabis in the state.
In all, the state collected nearly $73 million in cannabis tax revenue during the 2024 calendar year.
The Cannabis Reform Act of 2023 allows for an allocation of funding to the Maryland Cannabis Administration to cover operations and administrative expenses, which is $6,780,090 for this quarter. Revenue from adult-use cannabis is then distributed to the following funds as required by the Cannabis Reform Act:
Community Reinvestment and Repair Fund (CRRF): $3,791,918 35% of quarterly revenues fund community-based initiatives serving areas disproportionately impacted by the enforcement of cannabis prohibition prior to July 1, 2022. Funds from the CRRF will be distributed to each county based on percentages formulated by the Office of Social Equity.
Maryland Counties: $541,703 5% of quarterly revenue 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: $541,703 5% of quarterly revenues will be distributed to the Cannabis Public Health Fund to address the health effects associated with the legalization of adult-use cannabis.
Cannabis Business Assistance Fund: $541,703 5% of quarterly revenues will be distributed to the Cannabis Business Assistance Fund through FY 2028 to assist small, minority-owned, and women-owned businesses entering the adult-use cannabis industry.
General Fund: $5,417,025 The remainder of quarterly revenues, after required disbursements, will be allocated to Maryland’s General Fund.
