The Maryland Comptroller’s Office has announced that the state generated $17.5 million in tax revenue from adult-use cannabis sales in the first quarter of 2025. The Central Region, which includes Baltimore City, Anne Arundel County, Baltimore County, Carroll County, Harford County, and Howard County, accounted for nearly $8 million of this total.
Currently, Maryland imposes a 9% tax on adult-use cannabis sales. However, this rate will increase to 12% beginning July 1, following legislation passed during the 2025 General Assembly session. Despite the substantial revenue collected, only 5% of these funds are allocated to Maryland counties based on their local sales, which means that local governments receive only a small portion of the overall cannabis tax revenue.
In the first quarter, counties received just $536,500. In contrast, the state retained over $5.3 million for its general fund and allocated $3.7 million to the Community Reinvestment and Repair Fund. Local governments are responsible for a variety of tasks, including zoning, public safety, and health management related to cannabis businesses, yet they receive only 45 cents for every $100 in cannabis sales.
Other states, such as New York and Oregon, distribute a larger share of cannabis tax revenues to counties through various tax structures. This approach contrasts sharply with Maryland, where counties are left to manage increasing responsibilities with limited financial support. As cannabis sales continue to rise and the tax rate increases, the structure of revenue distribution remains unchanged, leaving counties with a minimal share of the growing revenue.
The Maryland Association of Counties (MACo) is advocating for a more equitable distribution of cannabis tax revenue that accurately reflects the local responsibilities associated with cannabis regulation and its impacts. Updates on this issue will continue to be reported by Conduit Street.
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