Maryland lawmakers draft bills to regulate sale, tax recreational-use cannabis

Lawmakers filed a bill Friday to establish a regulatory framework for Maryland’s nascent adult-use recreational cannabis industry, as Marylanders count down the clock toward legalization this summer.

House Ways and Means Chair Vanessa Atterbeary, a Howard County Democrat, and Economic Matters Chair C.T. Wilson, a Democrat from Charles County, are sponsoring the bill. It would set up a system to tax sales and provide funding mechanisms for communities disproportionately affected by the war on drugs.

The state would tax cannabis sales to consumers at 6% for the fiscal year starting July 1. That’s when possession of up to 1.5 ounces becomes legal in Maryland. The rate would increase by 1% each year to a maximum of 10% in 2028. Medical cannabis would not be subject to the sales tax.

Revenue generated by the tax would mostly go to the state’s general fund. But 30% would go to a new Community Reinvestment and Repair Fund for at least the next decade. The fund was created last year to direct money to “community-based organizations” in areas determined by the attorney general as “the most impacted by disproportionate enforcement” of cannabis laws before legalization.

A smaller percentage of the tax revenue, 1.5%, would go to counties and municipalities. Maryland’s 24 jurisdictions would receive money from the fund proportional to the number of residents charged with cannabis-related crimes between July 1, 2002, and Jan. 1, 2023, in comparison to the total number of people charged.

Two entities created last year, the Cannabis Public Health Fund and the Cannabis Business Assistance Fund, would also each get 1.5%.

Cannabis would be regulated through the Maryland Alcohol and Tobacco Commission — which would be renamed the Maryland Alcohol, Tobacco and Cannabis Commission — in the office of the comptroller.

The legislation would establish the Office of Social Equity under the commission. Democratic Gov. Wes Moore would be charged with appointing the office’s executive director. His appointee must have at least five years of experience working in civil rights advocacy, litigation or “social justice.”

The governor is a former board member of a cannabis company, Green Thumb Industries, and has said he worked there to diversify “the board and the industry as a whole.” He has repeatedly said equity should be a focus when developing the recreational cannabis industry, including making sure communities disproportionately affected by the drug’s criminalization benefit from the new market.

The office’s mission would be to encourage such communities to participate in the industry and offer recommendations and technical assistance for diversity and social equity applications.

The Office of Social Equity would also consult with the comptroller and the Maryland Department of Commerce on how to allocate money through the Community Reinvestment and Repair Fund and the Cannabis Business Assistance Fund. The office would be required to seek annual public input regarding the distribution of the Community Reinvestment and Repair Fund.

This article will be updated.