Maryland Cannabis & Hemp Industries 

IRC § 280E Analysis / R&D Tax Credit Eligibility
  • Does Section 280E Apply to state individual income tax?

    • Yes. Maryland conforms to the Internal Revenue Code. The starting point is Federal Adjusted Gross Income. There is no provision that states Section 280E does not apply.

  • Does Section 280E apply to state corporate income tax?

    • Yes. Maryland conforms to the Internal Revenue Code. The starting point is Federal Taxable Income. There is no provision that states Section 280E does not apply.

  • Are State R&D Tax Credits Potentially Eligible for "Plant Touching" (e.g. producers, cultivators, manufacturers, retailers) Cannabis Companies?

    • No, subject to 280E restrictions. 

  • Are State R&D Tax Credits Potentially Eligible for Industrial Hemp Companies & "Non-Plant Touching" Separate Trade or Businesses (e.g. testing laboratories)?

    • Yes​, subject to further 280E analysis regarding company activities, structure, and applicable state laws.

  • See Maryland R&D Credit Summary​

State Law Background

(1) Hemp State Law Authority & Background​ 

  • Md. Agriculture Code Ann. § 14-101 (2016)

    • Establishes a license allowing individuals to plant, grow, harvest, possess, process, sell, or buy industrial hemp in Maryland.

    • Authorizes the Maryland Department of Agriculture or an institution of higher education to grow hemp for research purposes.

(2) Medical Marijuana State Law Authority & Background 

  • Statutory Language (year) - HB 702 (2003) SB 308 (2011) HB 180/SB 580 (2013)  HB 1101- Chapter 403 (2013) SB 923 (signed 4/14/14) HB 881- similar to SB 923

    • Patient Registry or ID cards - Yes

    • Allows Dispensaries - Yes

    • Specifies Conditions - Yes

    • Recognizes Patients from other states - No

    • State Allows for Retail Sales/Adult Use – N/A

  • Are sales of medical marijuana subject to sales tax?

    • No.

  • Is medical marijuana subject to an excise tax?

    • No.

(3) Recreational Marijuana State Law Authority & Background​​​ - N/A

  • Are sales of recreational marijuana subject to sales tax?

    • N/A.

  • Is recreational marijuana subject to an excise tax?

    • N/A.

(4) Does the State impose a Stamp Tax or Controlled Substances Tax?

  • No.

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