Maryland lawmakers, in collaboration with Governor Wes Moore, have unveiled a sweeping budget framework that includes over $1 billion in tax increases—one of the most controversial being a significant hike in marijuana taxes.
The agreement, part of a broader plan to address a $3 billion budget deficit for fiscal year 2026, includes a staggering 33% increase in the state’s cannabis excise tax.
The move, which has already drawn fierce opposition from industry stakeholders and consumers alike, generate hundreds of millions in new revenue, according to proponents of the move. They say the additional funds would be directed toward essential services, including education, public safety, and transportation, lawmakers claim. However, critics argue that the tax hike could stifle Maryland’s burgeoning legal cannabis market, making it harder for dispensaries to compete with the illicit market.
Under the new budget plan, Maryland’s marijuana excise tax would increase from the current rate of 9%, to 12%. This would remain far lower than the marijuana tax rate in some states, such as Washington which has a 37% marijuana excise tax.
Although proponents say the increase is modest, the Maryland Cannabis Association has warned that the tax increase could drive consumers toward neighboring states with lower rates, undermining the very revenue goals the state hopes to achieve.
