Maryland’s adult-use hashish gross sales equipped more or less $72.9 million in state income in 2024 from a 9% sales-and-use tax, however elected officers are making plans to attract extra money from the business transferring ahead.
Gov. Wes Moore and leaders within the state’s Normal Meeting introduced an settlement to the fiscal 2026 finances on March 20 that integrated greater than $1 billion in new income from tax will increase and greater than $2.3 billion in cuts to get rid of a $3.3 billion structural deficit that they blamed on “disorder and chaos” from the Donald Trump management.
The $1 billion in new income contains expanding the hashish tax from 9% to twelve%—a 33% hike at adult-use retail—Maryland Issues reported. This building up was once integrated within the agreed-upon “framework” introduced on March 20 and may move into impact on July 1, 2025.
First of all, on Jan. 15, Moore had proposed expanding the hashish tax to fifteen% for fiscal yr 2027 (beginning July 1, 2026). Then again, the finances main points for the extra modest building up are nonetheless within the early phases of the legislative procedure and have not begun to be finalized.
Since Moore launched his finances proposal in January—5 days earlier than Trump was once inaugurated—Maryland’s fiscal forecast has modified dramatically, the governor mentioned all the way through a press convention along legislative leads closing week.
“The article that we have got noticed is that the sector has basically modified in simply the previous 8 weeks,” Moore mentioned. “In line with the credit standing company [Moody’s], federal cuts pose a better danger to Maryland than to another state within the nation. And now we have noticed hundreds of federal staff laid off and workplaces just about shuttered. The president has introduced a reckless industry struggle with our allies, together with our greatest industry companions, and the ones price lists may imply over a $2 billion affect on our economic system and immediately hurt our other people.”
Moore was once joined by way of Maryland Area Speaker Adrienne Jones, Maryland Senate President Invoice Ferguson and different legislative leaders within the state govt’s Democratic trifecta.
Whilst the elected officers didn’t in particular point out the hashish tax building up, they did speak about a brand new 3% tax on IT and information products and services they mission will make up just about part of the $1 billion in new tax revenues for fiscal 2026.
The finances settlement additionally initiatives that the hashish tax hike from 9% to twelve% would lift an extra $39 million in income, in step with Maryland Issues; on the other hand, that projection is most likely overstated in keeping with present gross sales traits.
After Maryland introduced adult-use gross sales in July 2023, per month gross sales figures in large part leveled out within the latter part of 2024, averaging $71.6 million per thirty days, in step with the Maryland Hashish Management.
Present traits display Maryland’s adult-use hashish marketplace recording more or less $900 million in annual dispensary gross sales transferring ahead: An extra 3 share issues at the tax fee would generate $27 million in more income in keeping with this projection. Scientific hashish isn’t topic to the state’s sales-and-use tax.
From a enterprise viewpoint, with 100 dispensaries in Maryland, the typical retailer could be at the hook for an extra $270,000 in taxes each and every yr, which means costs may building up, using some customers clear of the license market.
Even though this tax building up may harm hashish companies, Moore mentioned all the way through the clicking convention that the finances settlement is “unapologetically” pro-business.
“We wish to develop the economic system, and we wish to diversify our economic system off of Washington, and we wish to make Maryland extra business-friendly,” the governor mentioned. “To develop our economic system, we wish to make certain that that is the most productive position to start out and run and construct a enterprise. And we’ve agreed to spend money on industries of the long run that can develop Maryland’s economic system and create jobs, like cyber and quantum and AI. And we’ll additionally give protection to incumbent industries and sectors that [are] on the middle of our higher prosperity.”
Moore identified that the finances settlement was once extra considering spending cuts—the biggest cuts the state has made in 16 years—over tax will increase to near the finances hole.
Ferguson mentioned the finances settlement moves a stability between fiscal accountability and protective the state’s core social protection web.
“We will have to recognize the cruel possible choices that include accountable budgeting, and underneath this proposal, we’re reducing no less than $2.3 billion to navigate financial uncertainties,” the Senate president mentioned. “Whilst those cuts are tricky, they’re vital to take care of fiscal steadiness for Maryland.”
When Maryland put a legislative-referred adult-use hashish legalization query earlier than citizens in November 2022, the 9% sales-and-use tax fee for dispensary gross sales was once established to coincide with the similar fee that applies to alcohol gross sales.
Elected officers didn’t goal alcoholic drinks of their finances settlement.
