Washington, DC: District officials have turned back provisions in the city’s 2027 budget proposal that sought to significantly raise sales taxes on retail cannabis purchases.
Language (Medical Cannabis Tax Rate Amendment Act of 2026) included in the initial version of the proposed 2027 fiscal year budget raised the sale of medical cannabis products from six percent to 10.25 percent. District law provides for the licensed sale of cannabis products to any patient “with a debilitating condition as recommended by a D.C. licensed doctor or as self-certified by a patient.” Despite support for the tax from the Mayor, the Council rejected it.
In a legislative action alert opposing the proposed tax increase, NORML opined: “This proposal will push many patients to unregulated markets, undermining the safety benefits from legalization and regulation. … The District has already spent significant time and resources to minimize unlicensed operators and support the regulated market. A tax hike on consumers now will nullify those efforts at the expense of public health and safety.”
Last year, lawmakers in several states – including Maine, Maryland, Michigan, and Minnesota – passed legislation imposing significant cannabis-related tax hikes. By contrast, a legislative effort led by California NORML successfully rolled back marijuana-related taxes in that state.
Writing in an op-ed earlier this year, NORML’s Deputy Director Paul Armentano warned: “Many states are sacrificing the long-term health and sustainability of the legal cannabis market for theoretical short-term gains reaped by sky-high taxes. … Imposing excessive taxes on legal cannabis strengthens illicit markets while weakening legal ones. It encourages consumers to seek out unlicensed sellers who don’t check IDs, who lack the means or the desire to test their products for quality or purity, who operate without any regulatory oversight, and who don’t redistribute their revenues back into their local communities.”
According to the findings of a recently published study in the International Journal of Drug Policy, increased taxes on cannabis products result in exponentially higher prices, fewer people purchasing from the legal market, and decreased overall cannabis-related tax revenues.