Maryland Cannabis Administration seeks $35.8 million in FY26 allowance; highlights social equity licensing, state lab and incubator plans

The House Appropriations Committee on (date) heard a fiscal 2026 operating budget briefing for the Maryland Cannabis Administration, during which analysts and agency officials outlined licensing results, revenue trends and planned investments in social equity and testing infrastructure.

Victoria Martinez, budget analyst for the Department of Legislative Services, told the committee that the fiscal 2026 allowance for the Maryland Cannabis Administration increases by $3.6 million, or 11.3 percent, to $35.8 million and is primarily funded from the Cannabis Regulation and Enforcement Fund. Martinez said the allowance includes a proposed efficiency that adds $5 million in special funds from that fund to backfill a $5 million withdrawal of general funds for the Social Equity Partnership Grant program in fiscal 2025. That action is contingent on a Budget Reconciliation and Financing Act provision expanding allowable uses of the Cannabis Regulation and Enforcement Fund.

The Department of Legislative Services analysis shows personnel costs account for roughly 41 percent of MCA spending; DLS also identified line items of $5 million for the Social Equity Partnership, $4 million for general administration contracts and $3.5 million for an enforcement contract with the Alcohol, Tobacco and Cannabis Commission (ATCC).

Tabitha Robinson, acting executive director of the Maryland Cannabis Administration, said the agency supports the governor's allowance and DLS's recommendation to concur with it. Robinson told the committee that MCA was established by the Cannabis Reform Act of 2023 and executed a statutorily mandated social equity licensing round between late 2023 and spring 2024.

Robinson said the administration held lottery events with the Office of Social Equity, Lottery and Gaming and independent consultants and selected 205 awardees statewide; MCA told the committee that more than 190 of those awardees had moved on to conditional licensure as of the testimony.

DLS and MCA offered differing descriptions of application volume: Martinez said the first licensing round received 708 applications and awarded 205 conditional licenses (50 growers, 70 processors and 85 dispensaries), while Robinson said MCA received over 1,700 applications for the social equity round. Both figures were presented to the committee during the hearing.

Robinson and Office of Social Equity staff described a state-run incubator planned at the Catonsville Armory, funded in the fiscal 2026 Capital Improvement Program with $5 million to support social equity and micro-licensees. Robinson said the incubator would provide shared space and equipment for micro dispensaries and processors and could serve up to 110 micro businesses over time.

Audrey Johnson, identified in testimony as executive director of the Office of Social Equity, said the agency and Department of Commerce are preparing a second disbursement from the cannabis business assistance fund; she said disbursement amounts will vary by license type and that the administration planned to roll out details within 30 to 60 days but did not provide final per-grantee averages in the hearing.

On market trends, Martinez said adult-use cannabis is subject to a 9 percent sales and use tax and that DLS data show total retail sales increased about 43 percent to $1.1 billion in fiscal 2024, with adult-use sales rising while medical sales fell. Separately, MCA witnesses referenced a larger aggregate industry sales figure during questioning; officials attributed roughly $82 million in tax revenue to the adult-use market since legalization. The committee heard that tax revenue is split by statute among administrative needs, the Cannabis Regulation and Enforcement Fund and the Cannabis Reinvestment and Repair Fund, with a share allocated to counties and municipalities.

On testing and enforcement, Office of Social Equity and MCA staff said the state opened its first state-run cannabis testing lab in southern Baltimore. Officials said all batches must have at least one test prior to distribution, packaging must include THC labeling, and the state lab will also assist testing confiscated or unregulated products that ATCC encounters. Witnesses described ongoing enforcement challenges with products marketed as hemp at retail outlets; MCA said some of those products have tested above the THC threshold that separates federally defined hemp from regulated cannabis.

The hearing included questions about product potency and public safety. Audrey Johnson said potency varies by product type and consumer (medical consumers may have access to higher-potency items) and that packaging and labeling requirements list THC levels. She said officials could provide more detailed potency data on request.

MCA also described workforce and public education efforts. Robinson said MCA launched a workforce development program in partnership with the Department of Labor's EARN Maryland initiative and noted priority admission for residents of Western and Southern Maryland and the Eastern Shore; MCA also described a public education campaign called "Be Cannabis Smart". The testimony stated the campaign achieved "more than 190 impressions statewide in 2024," a figure provided to the committee in oral testimony.

Committee members asked about enforcement tools for ATCC and pending legislation that would expand ATCC's authority to seize and test retail products quickly. MCA and ATCC-related witnesses said current on-site testing and sampling rules limit how many items ATCC can take and test and that proposed changes aim to speed enforcement of illegal or mislabeled products.

Robinson and DLS staff told the committee they are available to answer follow-up questions and to host site visits, including visits to the state testing lab and the proposed incubator facility.

The briefing did not include a formal committee vote; DLS recommended concurring with the governor's allowance and agency witnesses said they support that recommendation.