Maryland Cannabis Administration defends incubator funding amid market shifts
Get AI-powered insights, summaries, and transcripts
Subscribe
Summary
The MCA recommended keeping a $5 million FY27 appropriation for a state‑run cannabis incubator and described a drop in overall licenses, rising retail sales, the first social‑equity licensing round, and enforcement challenges from illicit sellers.
The Education, Business and Administration Subcommittee heard a presentation and testimony on the Maryland Cannabis Administration’s FY27 budget and program activity, including licensing, market trends, and a delayed cannabis incubator project.
Victoria Martinez, an analyst with the Department of Legislative Services, told lawmakers that the MCA’s FY27 allowance is down about $3.4 million (10%) to $29.3 million and is funded entirely from the Cannabis Regulation and Enforcement Fund. Martinez noted a decline in one‑time funding for the incubator and recommended DLS seek an update on the project before the FY26 $5 million appropriation is spent.
Tabitha Robinson, director of the Maryland Cannabis Administration, opposed the DLS recommendation to reduce the $5 million for the incubator. "We are positioned to use the FY 2027 $5,000,000 appropriation strategically, acquiring a facility, which we intend to do in the 2027, contracting for design and beginning construction," Robinson said, adding that MCA has shortlisted 11 priority sites for the incubator after the originally selected armory site in Catonsville was deemed no longer viable.
Martinez and Robinson also reviewed licensing and market data: MCA issued three license categories and awarded roughly 205 conditional social‑equity licenses in its first round (193 advanced to conditional after withdrawals/denials); retail cannabis sales reached $1.2 billion in 2025 (+7%) with an average cost per gram of $8.57. Martinez said a provision in last year’s BRFAA raised the cannabis sales and use tax from 9% to 12%, producing an additional $6.7 million to the general fund in 2026.
Senators asked about the illegal market. Robinson said exact measurement is difficult but described enforcement actions by ACCC and a July 2025 law that allows seizure based on labeling, which she said improved enforcement effectiveness. She also noted illicit sellers' competitive advantage: lower tax obligations, closer proximity to schools and other restricted sites, and lower compliance costs, and she described the statutory monetary penalty as $5,000.
The subcommittee did not take a budget vote; DLS requested an updated status on the incubator and recommended deferring the $5 million until MCA demonstrates site acquisition and spend progress.