Since Maryland cleared adult-use marijuana on July 1, 2023, the state has laid out a straightforward tax system that all dispensaries must follow to keep on the right side of the law. This guide explains how dispensaries handle tax collection and payments once a customer buys some cannabis.
Every dispensary must add a 9% special sales and use tax to adult-use cannabis products. This tax is added to the entire retail price before the customer pays. If a customer buys medical cannabis products, this tax does not apply, so the dispensary must clearly tell adult-use sales apart from medical sales at the cash register.
Once a dispensary collects the sales tax, it must report and send that money to the Maryland Comptroller’s Office. This office is in charge of keeping cannabis tax money safe and sound. Dispensaries file tax returns and pay the tax over the secure bFile system, where they can report other business taxes too. By keeping records tidy and payments on time, dispensaries help the state and their businesses stay healthy.
Dispensaries need to file sales tax returns either once a month or once every three months, depending on how much they sell. Each filing has to show the correct amount of taxable sales, the dollar amount of tax collected, and any transactions that do not get taxed, like sales of medical marijuana.
To stay within compliance boundaries, maintain accurate records within the dispensary system including each sale, transaction interpretation (adult-use vs medical), monetary exchange, and fiscal charges. It is necessary to keep this data in the case the Comptroller or Maryland Cannabis Administration conducts an audit.
Dispensaries also focus on the changes to the sales and use tax. Maryland is setting the cannabis sales tax to 12% which is an increase from 9% effective July 1, 2025. Dispensaries should make sure that their accounting, sales and the overall estimations align to the new rate to ensure all measures are in place well in time.
Filing cannabis taxes in Maryland require to follow a stringent set of procedures. Maryland operates a regulated market and in order to not incur penalties, dispensaries must collect the appropriate tax, submit timely reports, and keep proper documentation.
To provide additional guarantee, a cannabis compliance tax manager helps dispensaries manage their taxes efficiently which helps navigate the Maryland market. tax.
Stay compliant with Maryland cannabis dispensary taxes — reach out to Watter CPA today for expert guidance on reporting, payments, and audit readiness!
