Maryland took a big step toward legal adult-use cannabis when voters said yes to Question 4, and that became law on July 1, 2023. The state moved from a program just for medical cannabis to a state-regulated market open to all adults.
This new system creates chances for cannabis retail, farming, and support businesses, but it comes with a web of new tax and compliance rules. Any business hoping to thrive must know the cannabis tax rules and the day-to-day steps to stay compliant.
This guide explains Maryland’s cannabis sales tax system. You’ll find current and future tax rates, key dates and steps for reporting and payment, and how the tax money is shared with state programs. Whether you own a dispensary, advise cannabis businesses on taxes, invest in the space, or help create policy, this information will make Maryland’s cannabis tax environment clear.
Starting in 2025, Maryland will charge a 9% special sales and use tax on sales of adult-use cannabis. You’ll see the tax added when the customer checks out. The 9% rate lines up with Maryland’s alcohol excise tax and will apply consistently to all qualified adult-use cannabis retail sales.
This tax is separate from Maryland’s regular sales and use tax. It only applies to the retail price of adult-use cannabis sold at state-licensed dispensaries. Those dispensaries must collect the tax and send the money to the Maryland Comptroller.
Patients with state medical cannabis certifications do not pay this 9% tax. They can buy qualifying medical products without the added sales tax. This exemption helps keep prices lower for medical users and shows the state’s clear division between medical and adult-use cannabis.
On July 1, 2025, Maryland’s cannabis tax rate for adult-use sales will increase from 9% to 12%. The General Assembly approved this increase during the 2025 session. Lawmakers expect the higher rate to generate more revenue as the cannabis market continues to grow.
Cannabis shops and supply chains need to get ahead of the curve now. The new 3% cannabis tax will affect what consumers see on the shelf, how your point-of-sale software is set to calculate the tax, and the way tax reports need to be formatted and filed. If you wait until the change goes live, you could face audits, pricing errors, and worried customers questioning the tax totals on their receipts.
That 3% bump is headed straight to the state General Fund, where it will help pay for everything from classrooms to police and fire protection. Adjusting the tax schedule is now standard practice for states, letting budgets stay flexible and responsive to the cannabis market as it continues to mature.
Maryland has been enjoying a nice bump in tax money since it started adult-use cannabis sales in 2023.
Here’s a look at some big numbers:
These numbers show how important cannabis is to Maryland’s budget. They also show how crucial it is for dispensaries to get the tax counting right. With the tax rate set to go up in 2025, the state is ready to see even higher annual totals. That extra revenue will help keep state services and public programs funded.
In Maryland, cannabis dispensaries have to collect and pay sales tax on cannabis sales to consumers directly to the Maryland Comptroller’s Office. Here’s how the process works:
Keep in mind that the Maryland Cannabis Administration (MCA) issues licenses and oversees dispensary operations, while the Comptroller’s Office manages tax collection and ensures all businesses stay in compliance.
Maryland’s cannabis sales tax landscape is defined by clarity today and change tomorrow. With a 9% tax currently in place and a confirmed increase to 12% beginning July 1, 2025, dispensaries and operators must be prepared for both immediate and long-term compliance.
Key takeaways include:
Is your dispensary ready for the changes ahead? Our team at Dimov Tax offers specialized advisory and compliance services tailored to Maryland’s cannabis industry. From tax strategy to audit preparation, we help dispensaries stay compliant and competitive in a regulated market.
Stay ahead of Maryland’s cannabis tax changes — contact Watter CPA today for expert guidance to keep your dispensary compliant and profitable!
