An Act to Change How Adult Use Cannabis Excise Tax Is Calculated
Maine Legislature, Session 131, LD 1405
Committee Amendment CA_A_H834 (House)
Amends: 36 MRSA §4921, 36 MRSA §4923

COMMITTEE AMENDMENT " /^" to H.P, 901, L.D. 1405, "An Act to Change How
Adult Use Cannabis Excise Tax Is Calculated"
Amend the bill by striking out everything after the enactmg clause and inserting the
following:
'See. 1. 36 MRSA §4921, sub-§l-A is enacted to read:
1-A. Average wholesale price. "Average wholesale price" means the median
wholesale price per pound or fraction thereof of cannabis flower or cannabis trim that is
solcLor transferred from cultivation facility licensees to other licensees in the State, as
determined by the department on an annual basis by routine technical rulemaking as
described by Title 5. chapter 375. subchapter 2-A,
Sec. 2. 36 MRSA §4921, sub-§2-A is enacted to read:
2-A. Departments^ has the same meaning as in Title 28-B, section 102,
subsection 14,
See. 3. 36 MRSA §4923, sub-gl, as amended by PL 2021,c. 323,§3 and amended
by c. 669, §5, is further amended to read:
1, Excise tax on cannabis flower. A Prior to January 1. 2025. a cultivation facility
licensee shall pay an excise tax of $335 per pound or fraction thereof of cannabis flower
sold to other licensees in the State. Beeinnine January 1,2025 and prior to January 1.2027,
a cultivation facility licensee shall pay an excise tax of $150 per pound or fraction thereof
of cannabis flower sold to other licensees in the State. Beeinning January 1. 2027. a
cultivation facility licensee shall pay an excise tax of 10% of the avemgewholesale price
of cannabis flower sold to a products manufacturing facility. as defined in Title 28-B.
section 102. subsection 43, or a cannabis store, as defined in Title 28-B. section 102»
subsection 34. in the State.
See. 4. 36 MRSA §4923, sub-§2, as enacted by PL 2019, c, 231, Pt. B, §7 and
amended by PL 2021, c. 669, §5, is further amended to read:
COMMITTEE AMENDMENT
COMMITTEE AMENDMENT " R^" to H.P. 901, L.D. 1405
._..- 1 2. Excise tax on cannabis trim. A Prior to January 1. 2025. a cultivation facility
ROS 2 licensee shall pay an excise tax of $94 per pound or fraction thereof of cannabis trim sold
to other licensees in the State. Beginning January 1. 2025 andLRrjorto Januarv1,2027, a
cultivation facility licensee shall t>av an excise tax of $20 per pound or fraction thereof of
cannabis trim sold to other licensees in the State. Beeinnine January 1,2027. a cultivation
facility licensee shall pay an excise tax of 10% of the average wholesale price_of_cannabis
trim sold to a products manufacturine facility, as defined in Title 28-B, section_102,
subsection 43. or a cannabis store, as defined in Title 28-B, section 102,._subgection 34, in
the State.
Sec. 5. Appropriations and allocations. The following appropriations and
allocations are made,
ADMINISTRATIVE AND FINANCIAL SERVICES, DEPARTMENT OF
Adult Use Cannabis Regulatory Coordination Fund Z264
Initiative: Provides funding for one Auditor II position and associated costs.
GENERAL FUND
POSITIONS - LEGISLATFVE COUNT
Personal Services
AHOther
GENERAL FUND TOTAL $0 $130,476
Amend the bill by relettering or renumbering any nonconsecutive Part letter or section
number to read consecutively.
SUMMARY
This amendment reduces the cannabis excise tax rate, beginning January 1, 2025 and
prior to January 1, 2027, from $335 per pound to $150 per pound for cannabis flower and
from $94 per pound to $20 per pound for cannabis trim. Beginning January 1, 2027, the
excise tax rate for each product is 10% of the average wholesale price per pound or fraction
thereof when sold or transferred to manufacturing or retail licensees. The average
wholesale price must be determined annually by the Department of Administrative and
Financial Services by routine technical rule.
FISCAL NOTE REQUIRED
(See attached)
2023-24
0.000
$0
$0
2024-25
1.000
$121,563
$8,913
Page2-131LR1636(03)
COMMIHEE AMENDMENT
Approved; 02/20/24 ^SA
LD 1405 LR 1636(03)
An Act to Change How Adult Use Cannabis Excise Tax Is Calculated
Fiscal Note for Bill as Amended by Committee Amendment "p^* (\\^'
Committee: Taxation
Fiscal Note Required: Yes
Fiscal Note
Projections Projections
FY 2023-24 FY 2024-25 FY 2025-26 FY 2026-27
Net Cost (Savings)
G-eneral Fund $0 $3,920,476 $9,799,365 $10,102,380
Appropriations/Allocations
General Fund $0 $130,476 $134,365 $138,380
Revenue
General Fund $0 ($3,790,000) ($9,665,000) ($9,964,000)
Other Special Revenue Funds $0 ($363,000) ($1,255,000) '($1,327,000)
Fiscal Detail arid Notes
This bill reduces the excise tax per pound on cannabis products beginning January 1, 2025 and changes the excise tax
on cannabis products to 10% of the average wholesale price beginning January 1, 2027. In fiscal year 2024-25,
cannabis excise tax revenue will decrease by $4,282,000 and cannabis sales tax revenue will increase by $129,000,
resulting in a net decrease in General Fund revenue of $3,790,000. The increase in cannabis sales tax revenue results
from increased sales volume as prices decrease in response to lower excise taxes, which more than offsets the
negative impact of the price decrease on sales tax revenue.
The bill also reduces revenue to the Adult Use Cannabis Public Health and Safety and Municipal Opt-in Fund by
$368,000 in fiscal year 2024-25 and increases revenue to the Local Government Fund by $5,000 in fiscal year 2024-
25, resulting in a net reduction of $363,000 in Other Special Revenue Funds,
This bill includes ongoing General Fund appropriations of $130,476 starting in fiscal year 2024-25 to the Office of
Cannabis Policy withm the Department of Administrative and Financial Services (DAFS) for one Auditor II position
and associated costs. Administrative costs to the Bureau of Revenue Services within DAFS to implement the changes
in the canuabis excise tax are expected to be minor and can be absorbed within existing budgeted resources,
LR1636(03) - Fiscal Note - Page 1 of 1