Maryland collected more than $26.2 million in cannabis sales tax revenue during the first quarter of 2026. Local governments received $341,990.

That amount represents the entire local government share of Maryland’s cannabis tax distribution.

Counties initially receive those funds, but State law requires them to distribute 50% of the allocation to municipalities that host cannabis dispensaries that generate the revenue. As a result, counties retain less than the already modest local share.

The State imposes a 12% sales and use tax on adult-use cannabis sales. Lawmakers increased the tax from 9% to 12% on July 1, 2025, with the additional 3% directed to the General Fund before other statutory distributions occur.

The January through March collections generated $26.2 million statewide, according to the Office of the Maryland Comptroller. Central Maryland accounted for the largest share at roughly $10.7 million, followed by the Capital region at $6.2 million and Western Maryland at $4.7 million.

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State law directs cannabis tax revenues to several funds and programs. During the quarter, the Maryland Cannabis Administration received roughly $7.5 million, the Department of Social and Economic Mobility received $5.3 million, and the Community Reinvestment and Repair Fund received nearly $2.4 million. The General Fund also received multiple distributions totaling nearly $10 million.

The local government share remains small relative to the responsibilities counties and municipalities manage as the cannabis industry grows. Local governments handle zoning, land-use decisions, public safety coordination, and other impacts associated with cannabis businesses, yet receive only a small fraction of overall cannabis tax revenues.

The numbers tell the story. For every $100 in cannabis tax revenue Maryland collected during the quarter, State funds and programs received nearly all of it. Local governments received about $1.30, with counties and eligible municipalities then splitting that small local allocation.

Other states dedicate a larger share of cannabis revenues directly to local governments through local excise taxes, local sales taxes, or more robust revenue-sharing arrangements. Maryland’s formula continues to provide limited local revenue despite the significant role counties and municipalities play in accommodating and regulating the industry.

MACo will continue advocating for a more balanced distribution that better reflects the responsibilities local governments manage as the cannabis market continues to expand.

Stay tuned to Conduit Street for more information and analysis.