As the Maryland General Assembly’s annual 90-day legislation looms next month, the decision to legalize marijuana could become a major topic in Annapolis.
State lawmakers held various virtual sessions inviting health and policy experts on safety and policy recommendations, criminal justice impacts and education such as how marijuana comes from part of the cannabis plant.
One major reason legalizing the drug remains a key to possibly place on a voter referendum next year: to ensure Black and Latino entrepreneurs can participate in the mainly cash-business industry.
“I am in full support of it,” said Fort Washington resident Vernon Wade, 57, owner of Wade Enterprises who’s studying environmental science at the University of the District of Columbia. “The minority students want to know how they can be involved in it. They feel they are being left out. Equity is key.”
The House Cannabis Legalization work group held several online meetings including the final one for this year on Dec. 1 focusing on taxation.
Carl Davis, research director of the Institute on Taxation and Economic Policy in Northwest, said taxes on recreational cannabis are assessed based on price and quantity. He said Connecticut and New York measure quantity on the amount of THC, the psychoactive ingredient in cannabis.
Davis said the price of cannabis should decrease because more businesses would open with consumer preferences shifting toward oils and concentrates and state restrictions loosening over time.
“The huge game-changer will be around interstate commerce,” he said. “As soon as you start to move cannabis across state lines, the companies involved are going to become much larger. The growth operations will be much larger. It will take place where it makes environmental sense to grow.”
Marijuana remains illegal on the federal level as a “Schedule 1” drug under the Controlled Substance Act through the Drug Enforcement Administration.
Nearly two dozen states allow both medical and recreational use, so laws differentiate in each jurisdiction. In addition, marijuana remains illegal by the federal government and with some businesses strictly operating as a cash business.
Legalizing marijuana for recreational purposes has been approved in 18 states, the District of Columbia and Guam. Governors in New York, New Mexico and Virginia signed marijuana legislation into law this year.
According to a Goucher College poll released in October, 60% of Marylanders support having it legalized while 33% oppose it. The figure represents a slight decrease from a March poll when it received 67% support.
William Tilburg, executive director of the Maryland Medical Cannabis Commission, said projections in the first two years of adult and recreational cannabis consumption could reach up to 316,000 pounds with a market value of $1.2 billion in annual retail sales.
The figures came from a study conducted by Mathematica, a research and analytics firm headquartered in Princeton, New Jersey.
Tilburg said the study released last year didn’t calculate the state’s 6% sales tax and limited data from adult-use states and none comparable to Maryland’s population of 6.1 million.
He presented a case study from Massachusetts with some similarities as Maryland that includes: population size at 6.8 million; sales tax at 6.25%; and physical size ranking 44th in the nation and Maryland ranking 42nd.
Since cannabis sales began in November 2018, revenue in Massachusetts at 165 dispensaries increased each year at:
2018 – $5.2 million
2019 – $75.6 million
2020 – $116 million (stores closed for more than two months due to coronavirus pandemic)
2021 – Through Nov. 29, sales at nearly $1.2 billion for adult recreational use and $279 million for medical cannabis. Estimated tax revenue at $189 million.
“Pretty significant growth within those first three years,” Tilburg said. “More stores come online. More individuals use it, so there is higher revenue.”
Work group chair Del. Luke Clippinger (D-Baltimore City) said four subcommittees will be formed and schedule meetings to start when the legislative begins next month.
“I think it’s been important for us to establish a strong foundation of information in context as we move forward and dive deeply into this complicated issue,” he said. “And ultimately craft legislation that will fulfill the promise of this work group.”