Proposal to raise state cannabis tax sprouts vendor unease

BALTIMORE COUNTY, Md. — A state proposal could raise the tax on cannabis six percentage points in fiscal year 2027, a few years after the state legalized the substance for Marylanders 21 and older.

Gov. Wes Moore announced a budget proposal this month, which includes the possibility of raising the tax from 9 percent to 15 percent.

A state proposal could raise the tax on cannabis six percentage points in fiscal year 2027, a few years after the state legalized the substance for Marylanders 21 and older. Gov. Wes Moore announced a budget proposal this month, which includes the possibility of raising the tax from 9 percent to 15 percent. "It's going to slow things down. Slow down the progress the market's been making," Matthew Hersh, general manager of KIP Dispensary in Cockeysville, told WMAR.

"It's going to slow things down. Slow down the progress the market's been making," Matthew Hersh, general manager of KIP Dispensary in Cockeysville, told WMAR.

Hersh said industry discussions have been widely against the idea.

"No one is in favor of it. Everybody in the industry that is part of the regulated market, understands the impact tax has on overall revenue and customers willing to come in off the street from their illegal dealers."

Business has been booming, Hersh said, and he wants to keep that course. The state has already seen adult-use and medical cannabis sales soar past $1.5 billion since it was legalized in July 2023.

As the state looks to close a daunting budget shortfall, Gov. Moore's office argues the proposal will grow the state's economy, modernize its government and fix its tax system. According to budget secretary Helene Grady, the state projects taking in just north of $90 million from the tax when the proposal would go into effect in fiscal year 2027.

"I do understand the need and that it's an option," Hersh added, "however I think it's going to reduce the amount of total sales and possibility negate the increase of tax revenue."

As part of the legislative process, the Maryland General Assembly would still need to review and approve the proposals within the governor's budget.