Colorado voters approved legalizing, taxing, and regulating marijuana for adults in November 2012, and adult-use stores opened on January 1, 2014. Colorado’s cannabis industry is employing tens of thousands of workers and producing hundreds of millions in annual tax revenue.
We have estimated year-by-year tax revenue for Maryland based on Colorado’s annual adult-use sales. In doing so, we’ve adjusted for Maryland’s slightly larger population (6,045,680 vs. 5,758,736) and its slightly lower cannabis use rates pre-legalization (10.19% vs. 10.4% per month).
Delegate Jazz Lewis plans to propose amendments to HB 32, which would revise state excise tax rates as follows: In years 1-2 of adult-use sales, the tax rate would be 15%. It would increase to 20% in years 3-4, and cap at 25% after that. In addition to the excise tax, localities may impose a 3% sales tax. Standard state sales taxes would not apply.
Over the first five years of legal sales, HB 32 can be expected to generate approximately $800 million in state tax revenues plus more than $115 million in local taxes.
In the fifth year of legal sales alone (starting March 2026), it can be anticipated that HB 32 (as amended) will generate $296 million in state taxes and $35 million in local taxes.
