Maryland Legislature Considers Regulating and Taxing Cannabis Similar to Alcohol

LA Confidential WeedMaryland Legislature Considers Regulating and Taxing Cannabis Similar to Alcohol

ANNAPOLIS, Md. — State lawmakers are rolling out legislation Monday that would regulate and tax cannabis similarly to alcohol in Maryland. Senate and House bill sponsors will discuss the details of the proposal at a news conference today at 1 p.m. ET in the Lowe House of Delegates Office Building (Room 180).

The proposal consists of two bills — a regulation bill and a tax bill — that will each be filed in the Senate and the House. The regulation bill, sponsored by Sen. Richard S. Madaleno Jr. (D-Montgomery) and Del. Curt Anderson (D-Baltimore City), would make possession and home cultivation of limited amounts of cannabis legal for adults 21 years of age and older. It would remain illegal to consume cannabis in public or drive under the influence. Prior convictions for adults 21 and older possessing or growing amounts of cannabis made lawful by the bill would be expunged.

The bill would also create a structure for licensing and regulating a limited number of cannabis retail stores, product manufacturers, testing facilities, cultivation facilities, and craft cultivators (that would grow smaller amounts of cannabis to sell only to cultivation facilities and product manufacturers). The Comptroller of Maryland would be responsible for issuing licenses and creating rules, and the Department of Agriculture would be responsible for licensing and regulating the cultivation of industrial hemp. Cities and towns would have the authority to limit the location and number of cannabis establishments within their jurisdictions, as well as ban certain types of businesses.

The tax bill, sponsored by Madaleno in the Senate and Del. Mary Washington (D-Baltimore City) in the House, would create a structure for taxing cannabis and allocating the revenue. It would initially enact an excise tax of $30 per ounce, which would generally be paid by cultivators, and a 9% sales tax on retail cannabis sales, which is the same as the sales tax rate on alcohol. Cannabis tax revenue would be used to cover the cost of administering the program, and then the remaining revenue would be allocated as follows: 50% for the community schools program; 25% for substance abuse treatment and prevention; 15% for workforce development programs; and 10% for combating impaired driving through public education and additional law enforcement training.

The legislation addresses concerns that have been raised about the licensing process for medical cannabis businesses. Specifically, it provides opportunities for small businesses, ensures the licensing process is subject to the Minority Business Enterprise Program, and requires outreach to diverse communities to ensure they are aware of new business opportunities. It also contains strong provisions aimed at protecting public health and safety, such as mandatory product testing and labeling; restrictions on advertising and marketing; and rules limiting edible products to a single serving of THC and requiring opaque, child-resistant packaging. Neither of the bills would affect the rights of patients under Maryland’s existing medical cannabis program, and taxes would only be applied to nonmedical cannabis.

Sixty-four percent of likely Maryland voters support making cannabis legal for adults, according to a Washington Post-University of Maryland poll conducted in September 2016.


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