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Summary of Tax Bill – SB 927, HB 1186
- Cannabis (marijuana) would be subject to an excise tax of $30 per ounce, paid by the cultivator, and adjusted annually for inflation.
- Cannabis would also be subject to a state sales tax of 9% (the rate for alcohol).
- The Comptroller would be responsible for tax collection, reporting, inspection, and auditing procedures.
- These provisions do not apply to medical cannabis.
- Colorado, which has over 600,000 fewer residents than Maryland, collected an estimated $200 million in taxes and fees from cannabis businesses in 2016.
- Also in 2016, Washington (which has 18% more residents than Maryland) collected over $256 million in excise taxes alone.
- After funding all costs of administering the program, the tax revenue collected in Maryland would be allocated as follows:
- 50% for education. Specifically, this would go to community schools programs — to schools where at least 50% of the students receive free or reduced-price lunch.
- 25% for addiction treatment, prevention, and evaluation, including addiction to opioids.
- 15% to workforce development programs.
- 10% to combat driving under the influence through public education and additional law enforcement training.
- Final passage of this bill is contingent upon the passage of the following bill.
Summary of Criminal Justice Reform Bill – SB 928, HB 1185
The bill would allow adults 21 years of age and older to:
- Possess up to one ounce of cannabis.
- Possess up to five grams of cannabis extracts, up to 12 servings of cannabis-infused edible products, or a combination. Serving sizes will be set by regulations created by the Comptroller.
- Grow up to six total cannabis plants, no more than three of which are mature.
- Prior convictions for adults 21 and older for possessing or growing amounts of cannabis made lawful by the bill would be expunged.
Maryland’s medical cannabis protections would not be affected.
- Smoking in public carries a civil fine of up to $500 (as it does under current law).
- Driving under the influence would remain illegal; these laws would be unchanged.
- Landlords would not have to allow the cultivation or smoking of cannabis.
- Employers would not have to allow the use of cannabis at work or allow people to work under the influence of cannabis.
- Cannabis use and possession would remain illegal for those under 21, punishable by a fine.
Five types of regulated, registered cannabis businesses:
- Retailers would sell cannabis and cannabis products to adults 21 and older.
- One for every 20,000 residents per county, but a minimum of two per county, distributed based on population. Cities and counties could set lower limits.
- In the localities that allow it, retailers could apply for an additional license that permits on-site consumption.
- Cannabis cultivation facilities would cultivate cannabis.
- 100 could be registered, and more can be added to meet demand.
- Craft cannabis cultivators could only grow a limited amount of cannabis.
- These small businesses could only sell to cannabis cultivation facilities or product manufacturers and fees would be lower.
- Cannabis product manufacturers could produce foods, salves, drinks, and other products infused with cannabis.
- Up to 150 could be registered.
- Safety compliance facilities would test cannabis for potency and contaminants.
- Initial licensing fee of $10,000 and annual renewal fee of $5,000 for most business types.
The Comptroller would regulate cannabis businesses:
- Licensing under this law would be subject to the Minority Business Enterprise Program, similar to the provisions in the casino law.
- The comptroller would have to do outreach to minority communities, women, veterans, and small business owners about the business opportunities created by the program and report back to the General Assembly.
- There would be a background check prior to granting a license; the Comptroller could consider the circumstances of the crime and any evidence of rehabilitation.
- The Comptroller would consider things like expertise, security plan, past regulatory issues, and location in determining who gets a registration. Bonus points would be offered on applications for: Maryland-owned businesses; environmental impact mitigation plans; providing excellent benefits to employees; being a minority, women, disabled or veteran-owned business; and more.
- Evaluation of the applications could not be contracted to a 3rd party, but the Comptroller could hire temporary employees.
- Existing medical cannabis businesses can apply for a retail license, but must have a plan for continuing to serve patients.
- The Comptroller would be required to adopt regulations within six months, including:
- School buffer: 300-foot buffer for all of the business types.
- Safety insert: Inserts would include dangers and how to recognize problem use.
- Packaging and labeling requirements, including opaque child-safe packaging for edibles.
- Environmental controls, including restrictions on pesticides.
- Restrictions on advertising, such as ensuring it does not appeal to minors.
- The Comptroller could suspend/ void registrations for violations.
- A 13-member advisory commission would evaluate the impact of the law and make recommendations.
- Localities could regulate the time, place, and manner of cannabis businesses’ operations, and could restrict their number as long as they did not de facto ban them (except that they can ban on-site consumption).
- Localities’ feedback on licensing would be given substantial weight.
Industrial hemp could be cultivated, subject to regulation and licensing by the Department of Agriculture.