Caroline County Weighs How to Spend $943,000 in Cannabis Tax Funds Under New State Guidance

Caroline County commissioners say they have received revised state criteria for spending cannabis reinvestment funds but do not expect to meet an Oct. 1 state deadline for a distribution plan.

FILE — statehouse · B.D. Gilfry / CC BY-SA 2.0

DENTON, Md. — Caroline County commissioners have received new guidance from the state on how to allocate nearly $943,000 in accumulated cannabis tax revenue, though officials say they are unlikely to meet an Oct. 1 state deadline to submit a spending plan, according to the Star Democrat.

A Fund Built for Reinvestment

Maryland created the Community Reinvestment and Repair Fund, or CRRF, in 2023 to direct a portion of adult-use cannabis tax revenue to local jurisdictions for community initiatives benefiting low-income residents and those disproportionately affected by past cannabis enforcement, according to the Maryland Office of Social Equity as cited by the Star Democrat.

Caroline County was among four counties that initially could not qualify under the state's original definition of disproportionately impacted areas because certain zip codes did not meet the criteria, the paper reported. County officials said they had been in communication with the state for roughly two years seeking clarity on how to proceed.

New Criteria, Still No Map

Finance Director Daniel Fox told commissioners at a recent meeting that the state has since redefined qualifying low-income areas, allowing counties to use designated census tracts or, alternatively, tracts where at least 51% of households earn below 80% of the area median income, the Star Democrat reported.

Fox said he and county grant coordinator Stacy Seward believe they have identified the correct filter and mapping for Caroline County, though Seward has followed up with the state to confirm the analysis. "Unfortunately there's not a convenient, 'Hey here's a statewide map with all the areas we want you to spend the money,'" Fox said, according to the Star Democrat. "You have to kind of do the legwork yourself and find that."

Plan Requirements Before Spending

Before the county can use any CRRF money, the state requires a formal distribution plan that includes assessment data ranking community needs, evidence of community input, and a description of outreach efforts to low-income communities, Fox said. The plan must then go through a public hearing before being submitted to the state for approval.

Fox said allowable uses include behavioral health crisis response, education and after-school programs, truancy and absenteeism intervention, housing and homelessness prevention, transportation improvements in high-density areas, job training and workforce development, community child care, recreational programs, and services for families affected by incarceration, according to the Star Democrat.

Fox noted the state expects the plan by Oct. 1 but said the county does not anticipate meeting that deadline and does not believe it will face penalties. "I think it is unrealistic that we have been in conversations for probably going on two years asking for this, they publish it and expect it back in 45-60 days," Fox said, as quoted by the Star Democrat.

Current Balance and Pace of Growth

The county currently holds about $943,000 in its cannabis fund and is projected to receive roughly $114,000 annually going forward, Fox said. Commission President Travis Breeding directed staff to look into who could review the relevant legislation and regulations before finalizing next steps, the paper reported.

Broader Context

Caroline County's deliberations mirror a wider pattern across Maryland, where localities are working through how to allocate cannabis sales tax revenue, according to related coverage from DC News Now. Fox indicated that most counties are relying on local management boards and existing data collection efforts to build their distribution plans.

State licensing records show Maryland's adult-use market currently includes 127 open retail dispensaries, 27 cultivators, 30 manufacturers and a single licensed testing lab. Recent state license roster updates include new retail approvals for outlets such as Rooted, A Collaboration with Releaf Shop, alongside a change in receivership for PharmaCann Maryland assets, according to MMJDaily.

Official state sales filings show Maryland's monthly adult-use cannabis sales have hovered near $100–109 million in recent months, including about $105.2 million in August 2026, $108.9 million in July and $103.0 million in June — a relatively stable revenue base from which CRRF allocations to counties like Caroline are drawn.

What to Watch

It remains unclear how quickly Caroline County will finalize its distribution plan once state confirmation of its mapping approach is received, or whether other counties facing the same zip-code qualification issue will move faster. The Star Democrat's account suggests the timeline hinges on state responsiveness rather than county readiness, a dynamic Fox described as a two-year back-and-forth now nearing a procedural finish line.