DC Budget Proposal Would Raise Medical Marijuana Tax by 75%

A proposal included in Washington, D.C.’s fiscal year 2027 budget would significantly increase the tax rate on medical marijuana purchases, raising concerns among advocates who say the change could push patients toward the unregulated market.

The Medical Cannabis Tax Rate Amendment Act of 2026, included as part of the Fiscal Year 2027 Budget Support Act of 2026, would raise the tax on medical marijuana sales from 6% to 10.25%, an increase of 75%. If approved, the higher rate would take effect October 1, the start of the District’s next fiscal year.

The proposal was submitted by Mayor Muriel Bowser as part of her broader budget package. According to a fiscal impact statement from the Office of the Chief Financial Officer, the change is projected to generate $1.54 million in additional revenue in fiscal year 2027, and $6.33 million through fiscal year 2030.

D.C. allows medical marijuana sales through licensed retailers, with adults 21 and older allowed to self-certify as patients rather than receiving a recommendation from a doctor. The District has relied on the self-certification system as part of its effort to expand access to the legal market while competing with unlicensed operators.

Advocates opposed to the tax hike argue that increasing costs for patients could undermine those efforts.

NORML, which issued an action alert opposing the proposal, said the increase would make regulated products more expensive at a time when D.C. is still working to transition consumers away from the illicit market. The organization said higher taxes could reduce purchases from licensed retailers and weaken the public safety benefits of regulation.

Some members of the D.C. Council have also expressed concern that the proposal could slow growth in the District’s marijuana industry and drive consumers to unlicensed sellers.