Cannabis consumers in California and Maryland must begin paying higher taxes for state-licensed cannabis products.
Cannabis-specific tax hikes took effect today in both states. In California, excise taxes on commercially available cannabis products increased from 15 percent to 19 percent. In Maryland, the special sales tax on retail marijuana purchases rose from 9 percent to 12 percent.
Maryland lawmakers passed budget legislation earlier this year raising the sales tax. NORML encouraged lawmakers and the Moore’s administration to reject the tax hike, opining: “Marylanders already pay a premium tax on retail cannabis products. Raising these taxes even higher will undoubtedly drive prices out of reach for some consumers — thereby undermining the primary goal of legalization, which is to provide adults with safe, affordable, above-ground access to lab-tested products of known purity, potency, and quality. … This proposed tax increase will also hurt state-licensed businesses, many of which have already invested millions of dollars in up-front costs and are still struggling to break even.”
California lawmakers enacted legislation in 2022 requiring administrators to modify the state’s cannabis excise tax. In recent months, California NORML coordinated legislative efforts to roll back the tax increase — arguing that cannabis is already heavily over-taxed in California relative to comparable products like beer, wine, and tobacco. Last month, members of the state assembly voted 74 to zero in favor of AB 564, which postpones the tax hike until 2030. However, Senate lawmakers have not yet taken action on the bill and efforts to incorporate its language into the state’s budget bill were unsuccessful.
Lawmakers in two additional states — Minnesota and Maine — also approved legislation this year increasing taxes on state-legal cannabis products. Additional efforts to raise marijuana-related taxes are pending in Michigan and New Jersey. In Ohio, Republican Gov. Mike DeWine called on lawmakers to double the state’s cannabis sales tax rate, but legislators rejected his proposal.
NORML has consistently lobbied against proposed cannabis tax hikes, arguing that increasing taxes unduly burdens both consumers and licensed retailers. NORML has also called for home-cultivation rights so that consumers and patients have a legal alternative to the retail market.
“Cannabis consumers are not ATMs,” NORML’s Deputy Director Paul Armentano said. “Lawmakers’ efforts to balance their budgets on the backs of consumers are short-sighted and doomed to fail. As lawmakers continue to push marijuana prices artificially higher, many consumers will exit the legal market — resulting in lower overall tax revenue and weakening the legal, regulated marketplace.”
Additional information is available from NORML’s Take Action Center.
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