Community Reinvestment and Repair Commission

In 2022, Maryland voters approved a ballot initiative to approve the partial decriminalization of possession and use of recreational cannabis. During its 2023 session, the Maryland General Assembly passed Senate Bill 516, which was signed into law by Governor Wes Moore and took effect on May 3, 2023 (hereinafter referred to as the “Cannabis Law”). The Cannabis Law does a number of things, including eliminating the State’s medical cannabis commission and establishing the Maryland Cannabis Administration which, among other duties, licenses and regulates all cannabis businesses in the State, including growers, processors, and dispensaries.

The Cannabis Law imposes a sales and use tax on cannabis of 9% (§ 11-104 of the TaxGeneral Article of the State Code), and prescribes the distribution of that tax. The sales and use tax collected is first applied to defray the entire cost of the operations and expenses of the Maryland Cannabis Administration, and, then, 35% is distributed to the State’s Community Reinvestment and Repair Fund, 5% is distributed to counties based on the revenue collected from each county, 5% is distributed to the State’s Cannabis Public Health Fund, 5% is distributed to the State’s Cannabis Business Assistance Fund, and the balance is distributed to the State’s general fund. If a county includes a municipality in which the tax is collected, the county is required to distribute 50% of its tax distribution that is attributable to the tax generated by dispensaries located in the municipality to the municipality (§ 2-1302.2 of the Tax-General Article of the State Code). The State’s Community Repair and Reinvestment Fund was established under § 1-322 of the Alcoholic Beverages and Cannabis Article of the State Code “to provide funds to community based organizations that serve communities determined…to have been the most impacted by disproportionate enforcement of cannabis prohibition before July 1, 2022.” The Cannabis Law made adjustments to § 1-322 to provide that the Fund includes the sales and use tax revenue distributed to it under the new provisions of the Tax-General Article related to cannabis sales, fees paid by medical cannabis businesses to convert their existing licenses to general use cannabis business licenses, and any other funds accepted for the benefit of the Fund (§ 1-322(a)(5) of the Alcoholic Beverages and Cannabis Article of the State Code). The Fund is to be used for certain community-based initiatives and cannot be used law enforcement agencies or activities or cannot supplant funding for pre existing local government programs (§ 1-322(a)(6) of the Alcoholic Beverages and Cannabis Article of the State Code). Moreover, the section now provides that the Comptroller shall distribute funds from the Fund to counties based on a formula that includes the proportionate number of cannabis possession charges in a county compared to the total number of cannabis charges in the State each year (§ 1- 322(b)(1) of the Alcoholic Beverages and Cannabis Article of the State Code). Counties are required to adopt laws “establishing the purpose for which money received from the Fund may be used”, and to report annually on how funds were expended (§ 1-322(b)(2) of the Alcoholic Beverages and Cannabis Article of the State Code). 

Bill No. 57-23 created the fund and the commission. The commission's purpose is to make recommendations for the use of the funds in the Community Reinvestment and Repair Special Revenue Fund.

Members are pending at this time.

View County Council Bill 57-23