Cannabis Sales in Maryland

The legalization of cannabis throughout the U.S. has been in the works for nearly three decades since California passed the Compassionate Use Act in 1996 to allow for medical marijuana consumption. 

Since then, dozens of states have followed suit, passing legislation allowing medical or recreational use or decriminalizing usage.

The 2018 Farm Bill even federally legalized hemp cannabis, which contains 0.3% or less of THC. While marijuana remains a controlled substance at the federal level, legalization continues to expand at the state level. Maryland is the latest to approve recreational marijuana, and the state was ready for the rollout.

Established dispensaries like Verilife Westminster and New Market locations that have been at the forefront of sales since medical marijuana was legalized in 2017 are now seamlessly transitioning to recreational sales in what is being heralded as one of the most efficient rollouts to date.

As attitudes continue to shift toward acceptance of marijuana for both medical and recreational marijuana use, legalization and the market for cannabis products will continue to expand. Maryland is the most recent state to capitalize on this trend, and it's already gaining ground.

Maryland's Adult-Use Launch Smashes Other State Records

July 1 marked the beginning of recreational marijuana sales in Maryland, and residents were on board in a big way. The state saw $87.43 million in recreational sales in the first month, averaging roughly $2.8 million per day. 

Flower and prerolls accounted for about 60% of monthly sales at over $52 million. While data analyst firm BDSA's projected sales of $1 billion by 2024 may be optimistic, the state has exceeded early expectations.

The July numbers accounted for nearly 20,000 pounds of cannabis sold by licensed growers, up from just over 8,000 pounds in medical sales the previous month. When New Jersey launched recreational sales in April 2022, it logged $24 million in sales the first month, while New Mexico noted $22 million in first-month sales the same month.

Why was Maryland so much more successful? High sales could be attributed to preparation, with licensed retailers set to sell products on Day One. Lower taxes — just 9% — may have also added to accessibility for many consumers. 

Other states have suffered from a lack of regulatory standards or confusing regulations, resulting in illegal operations, police crackdowns and stunted sales numbers.

Record Sales in the First Month

Maryland's record-setting first-month sales speak to changing social attitudes and consumer demand. The blitz started Day One with $5 million in sales, leading into a $10 million weekend and a total of $21 million in the first week. 

The state was prepared. Following a statewide vote to legalize adult-use marijuana in November 2022, lawmakers went into action, rushing to create suitable regulations allowing for a seamless July 1 rollout.

A Boon for Cannabis Retailers and Growers

The expansion into the recreational marketplace has proven lucrative for retailers and the state. Despite a marginal sales tax of 9% on cannabis products, the state had already seen an influx of roughly $5 million in tax dollars as of the beginning of August.

Recognizing the massive economic potential of the industry, the Maryland Department of Labor created a grant to train workers interested in entering cannabis-related professions. Noting a lack of diversity in the first round of medical dispensaries to open in the state in 2017, Maryland shifted gears to create more opportunities for diverse ownership.

Social equity licensees were invited to apply with the Maryland Department of Commerce Cannabis Business Assistance Fund before October 2022. 

The next round, set to open Nov. 13 and run through Dec. 12, will adopt a "race-blind" approach to licensing but favor residents in ZIP codes where the criminalization of marijuana has had a disproportionately high impact.

The Road to Cannabis Legalization in Maryland

The ongoing legalization of cannabis recognizes and moves to address both the potential benefits of cannabis for medical purposes and the history of criminalization adversely affecting some communities more than others. 

While the sale of medical marijuana has been legal in Maryland for several years, retailers wanted to ensure a smooth transition for recreational sales.

Some retailers reported starting to ramp up cultivation and production as much as a year in advance of the July 2023 rollout. What did the road to legalization in the state look like?

Medical Marijuana Legalization

Although medical marijuana wouldn't become legally available in Maryland until 2017, the state began efforts to decriminalize medical usage as early as 2003 with the Darrell Putman Compassionate Use Act. 

Under the act, patients in possession of less than 1 ounce of marijuana for medical purposes would face only a misdemeanor offense, with a penalty of just $100.

In 2011, the misdemeanor penalty was removed, and in 2013, the scope of the act was expanded to allow for cannabis research studies at academic medical centers. 

Over the next few years, the Maryland legislature began approving legislation to expand protections for patients, caregivers and physicians, culminating in the passage of HB 104 in 2016. 

This bill authorized healthcare practitioners to recommend cannabis as a method of treatment, and in December 2017, 21 licensed dispensaries like Verilife New Market and Westminster locations opened across the state, offering access to medical patients.

Adult-Use Legalization in Maryland

On Nov. 8, 2022, with voter approval of referred ballot Question 4, Maryland became the 20^th state to legalize recreational marijuana for adult use. The measure passed by the highest margin of any ballot measure related to cannabis legalization, with over 67% voter approval. 

Gov. Wes Moore signed the Cannabis Reform Act on May 3 and officially went into effect on July 1.

Under the act, existing licensed dispensaries were authorized to convert medical licenses to include adult-use (recreational) sales. It also allowed for the issue of additional licenses for growers, processors and dispensaries over two rounds of licensing.

Regulations in Maryland

The cannabis industry in Maryland is regulated by the Maryland Cannabis Administration. Residents and visitors age 21 and over with a government-issued ID, such as a driver's license, passport or state or military ID, are eligible to purchase recreational products. 

It remains illegal to transport marijuana products across state lines or onto federal property like national parks.

Only residents registered as medical cannabis patients and caregivers are allowed to purchase medical marijuana products in the state, and a medical card is required. Under the law, priority service will be granted to registered medical patients.

Adults may legally possess a "personal use amount" of cannabis products, including up to 1.5 ounces of flower, 12 grams of concentrate or edibles totaling 750 mg of THC. It is also legal to cultivate up to two plants in a private home setting. Smoking cannabis in public is prohibited, as is driving under the influence of cannabis products.

The Future of Cannabis Sales in Maryland

After an incredibly efficient rollout of recreational marijuana, confidence in the program is high, as are expectations. With sales for the first month significantly exceeding expectations, some outlets are conservatively forecasting sales of about $275 million by the end of 2023, with the potential for sales of over $2 billion by 2027.

This not only bodes well for businesses poised to meet consumer demand and boost profits in the process but also for the state of Maryland. Tax dollars from the sale of cannabis products go into a community investment and repair fund intended to aid communities disproportionately harmed by cannabis criminalization.