# Alcoholic Beverages and Cannabis (GAB)

## Title 1. Definitions; General Provisions

### Subtitle 3A. Community Reinvestment and Repair Fund

#### Section 1-3A-01

(a) In this subtitle the following words have the meanings indicated.

(b) "Executive Director" means the Executive Director of the Office of Social Equity.

(c) "Fund" means the Community Reinvestment and Repair Fund.

(d) "Office" means the Office of Social Equity.

#### Section 1-3A-02

(a) The General Assembly finds that:

  (1) the goal of regulation and taxation of cannabis in the State is to create a safe and regulated industry that benefits the public interest;

  (2) the use of incarceration in enforcing prohibitions on the importation, manufacture, use, sale, and distribution of cannabis varied within the State by jurisdiction and racial classification;

  (3) analysis of geographic and demographic characteristics revealed disparities in arrests, prosecution, and imprisonment for cannabis use, with a negative and disproportionate impact on some communities and neighborhoods within the State; and

  (4) consequences of the disproportionate enforcement of cannabis-related offenses have contributed to the economic, public health, and social conditions of specific communities and have had significant and measurable effects on the social and financial resources available to the children, families, and local infrastructure of these communities.

(b) The General Assembly therefore finds that the public interest is served by:

  (1) acknowledging and repairing the causes and consequences of disparities in arrests and imprisonment in prosecutions of cannabis-related offenses among specific populations and geographic regions;

  (2) developing, among existing members of communities that have been disproportionately and negatively impacted, the capacity to ascertain and address the social and economic determinants that are fundamental to reducing the impact of longstanding inequities and improving economic, educational, and health outcomes; and

  (3) being consistent with social equity principles and governance by allocating a significant portion of tax revenue from the adult-use cannabis market to the Community Reinvestment and Repair Fund for distribution to local jurisdictions to be administered by the local jurisdictions.

#### Section 1-3A-03

(a)

  (1) There is a Community Reinvestment and Repair Fund.

  (2) The purpose of the Fund is to provide funds to community-based organizations that serve communities determined by the Office, in consultation with the Office of the Attorney General, to have been the most impacted by disproportionate enforcement of the cannabis prohibition before July 1, 2022.

  (3) The Comptroller shall administer the Fund.

  (4)

    (i) The Fund is a special, nonlapsing fund that is not subject to Sec. 7-302 of the State Finance and Procurement Article.

    (ii) The State Treasurer shall hold the Fund separately, and the Comptroller shall account for the Fund.

  (5) The Fund consists of:

    (i) sales and use tax revenue distributed to the Fund under Sec. 2-1302.2 of the Tax - General Article;

    (ii) conversion fees paid by businesses under Sec. 36-403 of this article; and

    (iii) any other money from any other source accepted for the benefit of the Fund, in accordance with any conditions adopted by the Comptroller for the acceptance of donations or gifts to the Fund.

  (6)

    (i) The Fund may be used only for:

      (1) funding community-based initiatives intended to benefit low-income communities, including:

      (A) behavioral health crisis response services;

      (B) education and after-school programs;

      (C) truancy and absenteeism intervention programs;

      (D) housing and homelessness prevention initiatives;

      (E) transportation improvements in high-density areas that have public transportation;

      (F) job training and workforce development programs;

      (G) community child care and recreational services; and

      (H) programs that benefit individuals and families impacted by incarceration;

      (2) funding community-based initiatives that serve disproportionately impacted areas, as defined in Sec. 36-101 of this article; and

      (3) any related administrative expenses incurred by a local government in administering the funds that do not exceed 15% of the funds received in the fiscal year.

    (ii) Money may not be expended from the Fund for law enforcement agencies or activities.

    (iii) Money expended from the Fund is supplemental to and may not supplant funding that otherwise would be appropriated for preexisting local government programs.

  (7)

    (i) The State Treasurer shall invest the money of the Fund in the same manner as other State money may be invested.

    (ii) Any interest earnings of the Fund shall be credited to the General Fund of the State.

  (8) No part of the Fund may revert or be credited to:

    (i) the General Fund of the State; or

    (ii) any other special fund of the State.

  (9) The Comptroller shall pay out money from the Fund.

  (10) The Fund is subject to audit by the Office of Legislative Audits as provided for in Sec. 2-1220 of the State Government Article.

(b)

  (1) Based on the percentage allocable to each county determined by the Office, the Comptroller shall distribute funds from the Fund to each county in an amount that, for the period from July 1, 2002, to January 1, 2023, both inclusive, is proportionate to the total number of cannabis possession charges in the county compared to the total number of cannabis possession charges in the State.

  (2) For any distribution of funds to a county under paragraph (1) of this subsection, the county shall hold the funds separately from other revenue and general funds.

  (3) Subject to the limitations under subsection (a)(6) of this section, each county shall adopt a law establishing the purpose for which money received from the Fund may be used.

(c)

  (1) The Office shall require each county to develop a plan for the distribution of funds to community-based organizations for use in accordance with this section.

  (2) The plan developed by a county shall be:

    (i) established before distributing funds under this section;

    (ii) developed in consultation with stakeholders; and

    (iii) the subject of a public hearing before finalizing the plan.

  (3) On or before October 1, 2025, the Office shall adopt regulations to carry out this section.

(d) On or before October 1, 2026, and each October 1 thereafter, each county shall submit a report to the Office on:

  (1) the amount of funds received from the Fund under subsection (b)(1) of this section;

  (2) the organizations that received funding from the county under this section;

  (3) the methods used by the county to solicit, review, and select organizations that may be eligible for funding under this section; and

  (4) administrative expenses related to the county's administration and distribution of the funds received under subsection (b)(1) of this section.

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Md. Code Ann., Alco. Bev. (as displayed at mgaleg.maryland.gov, October 16, 2026)