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Maryland's consumption of marijuana outpaces average, sets stage for high recreational demand

Columbia-based cannabis business Remedy Maryland is already expanding its retail footprint to three locations.
Scott Maucione
Columbia-based cannabis business Remedy Maryland is already expanding its retail footprint to three locations.

Maryland residents are expected to consume copious amounts of cannabis — as much as 1.8 million pounds of marijuana plants grown mostly in state — at least that’s what consultants told state lawmakers on Thursday. For the state to capture its best return on such a growing market, analysts told Maryland General Assembly lawmakers this week that levying a tax rate no higher than 20% would be ideal for state coffers and consumer market dynamics.

The projections were provided by Cannabis Public Policy Consulting, a research group that’s helping inform the Maryland legislature about its next steps to open the recreational marijuana market on July 1.

All that weed is not just medical marijuana. Those projections include consumer demand for both the legal regulated market and the so-called ‘gray market’ where products are sold and resold outside of the regulated dispensaries.

The consultants said that overall, it shows tremendous opportunity for businesses preparing to sell recreational marijuana after legalization begins.

“The linear growth suggested that the sales will hit $240 million per month, pretty rapidly,” Michael Sofis, director of research at Cannabis Public Policy Consulting, told the House Cannabis Referendum and Legalization Workgroup on Thursday. “It shows is there's a lot of variability, in a good way, a lot of room for growth and that's that first six months.”

Predicted adult-use cannabis sales in Maryland are estimated to grow until $240 million each month after 60 months, according to a state consultant.
House Cannabis Referendum and Legalization Workgroup
Predicted adult-use cannabis sales in Maryland are estimated to grow until $240 million each month after 60 months, according to a state consultant.

To harness that demand for the benefit of the state, Maryland needs to walk a fine line of taxing marijuana, while also keeping prices reasonable so people won’t turn to illegal methods or go to other states to get their desired products.

Sofis said that a tax rate of 15% to 20% should be the sweet spot for Maryland. He added that the state will need about 300 dispensaries to contain the initial demand.

Sales taxes around the nation vary from about 15% in California to 37% in Washington State.

Legislators also heard that Maryland may have more interest in marijuana compared to other states. Cannabis Public Policy Consulting found that Marylanders consume an average of 25.4 grams of marijuana a month, about five more grams than other states where the drug is legal.

“The demand for cannabis in Maryland is robust, it is absolutely the top, probably 15% to 20% of all states,” Sofis said.

"The current medical cannabis production and capacity is not going to suffice," said Michael Solis.
House Cannabis Referendum and Legalization Workgroup
"The current medical cannabis production and capacity is not going to suffice," said Michael Solis.

Maryland voted to legalize recreational marijuana in a referendum last November, the measure passed with a 66% majority.

Details like license distribution or measuring consumer demand needs to be hammered out. Adults can grow two of their own marijuana plants at home and possess up to 1.5 ounces of bud. It’s unclear how much recreational marijuana may cost consumers or how much the state tax will officially be yet.

In Maryland, cannabis is sold in the medical program as raw plant material known as buds and in edible format where THC is extracted from the plant and infused into gummies or chocolate.

The average price per gram of marijuana was $10.81 in 2021, according to the state. The price of edibles is roughly $20 for a package of 100 mg of THC-infused product in Maryland.

House Cannabis Referendum and Legalization Workgroup

All cannabis is still illegal on a federal level and cannot be transported across state lines.

While demand is looking good for business, Maryland is looking at other states who have led the way with legalization.

Massachusetts is reporting price drops because the supply outpaces demand.

The average price per gram there is $7.76. That’s nearly half the price it was a year ago.

Scott is the Health Reporter for WYPR. @smaucionewypr
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