Maryland sales tax on cannabis reached $72 million in 2024

Maryland generated over $72 million from sales tax on recreational cannabis in 2024, as reported by state Comptroller Brooke Lierman. However, some cannabis industry members believe the revenue was lower than expected. The state imposes a 9% sales tax on adult-use cannabis and related products, while medical marijuana remains tax-free. From October to December 2024, cannabis sales contributed $17.6 million to the tax revenue. For the entire year, the sales tax revenue was $14.7 million in the first quarter, $22.4 million in the second quarter, and $18.3 million in the third quarter. Lierman highlighted that these funds could help support community reinvestment and address inequities in the state. The sales tax revenue is allocated under the Cannabis Reform Act, which legalized recreational cannabis in 2023. Specific funds receive a portion of the revenue, such as the Community Reinvestment and Repair Fund, which gets 35%, and various assistance funds that each receive 5%. The remaining revenue goes to the state’s general fund. Most of the fourth quarter revenue came from Maryland's central region, which includes Baltimore City and surrounding counties. This region accounted for over $8 million in the fourth quarter, totaling more than $34.5 million for the year. However, the Comptroller's Office cannot disclose individual county earnings due to confidentiality rules. Despite significant overall cannabis sales of more than $1.1 billion from July 2023 to July 2024, experts like Shad Ewart from Anne Arundel Community College believe the tax revenue seems low. If sales had matched projections, the state could have collected around $99 million. Governor Wes Moore has proposed increasing the cannabis tax rate from 9% to 15% starting in fiscal 2027. Ewart cautioned that such a change might push consumers to seek cheaper options elsewhere. Additionally, Maryland is facing a $3 billion budget deficit, which could worsen due to layoffs among federal workers affecting income tax revenue.