ATCC highlights illicit cannabis seizures and finds wide noncompliance on ESD sales tax
February 07, 2026 | Education, Business and Administration Subcommittee, Budget and Taxation Committee, SENATE, SENATE, Committees, Legislative, Maryland
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The Alcohol, Tobacco and Cannabis Commission told a legislative subcommittee on Feb. 6 that expanded authorities and new systems have strengthened enforcement of illicit cannabis and that a recent agency survey found widespread noncompliance with Maryland’s tax requirements for electronic smoking devices.
Executive Director Jeff Kelly said ATCC’s THC enforcement powers expanded after statute and appellate court action and that an industry‑facing THC dashboard and a licensing portal now operate on Salesforce. Kelly told the committee that since July 1, 2025, ATCC has seized “over 2 and a quarter million dollars” of illicit cannabis product and has charged roughly 110 to 120 cases related to nefarious operators in the illicit market.
Kelly also described a compliance review of electronic smoking devices (ESDs). Using an in‑house statistician and undercover visits, ATCC surveyed 371 randomly selected retail locations across jurisdictions. “Out of that, almost two thirds of them were not charging the appropriate tax,” Kelly said. The agency said it forwarded the granular data to the Comptroller’s office for audit and enforcement follow‑up; ATCC did not announce agency enforcement actions tied to those findings during the hearing.
DLS analyst Yashoda Arai presented ATCC’s FY27 allowance of about $12 million, with personnel making up 79% of the budget supporting 60 regular positions and one contractual full‑time equivalent; DLS noted ATCC inspected roughly 3,200 retail tobacco establishments and about 2,300 licensed alcohol retailers in fiscal 2025.
On underage‑sales enforcement, Kelly described MOUs with local law enforcement (for example the Baltimore City Sheriff’s Office) that allow use of underage cadets or police cadets for compliance buys and said the agency maintains an anonymous tips line on its website for complaints.
The committee did not take formal votes during the hearing. DLS requested ATCC comment on significant year‑to‑year decreases in criminal violation counts and on newly added cannabis enforcement performance measures.
Executive Director Jeff Kelly said ATCC’s THC enforcement powers expanded after statute and appellate court action and that an industry‑facing THC dashboard and a licensing portal now operate on Salesforce. Kelly told the committee that since July 1, 2025, ATCC has seized “over 2 and a quarter million dollars” of illicit cannabis product and has charged roughly 110 to 120 cases related to nefarious operators in the illicit market.
Kelly also described a compliance review of electronic smoking devices (ESDs). Using an in‑house statistician and undercover visits, ATCC surveyed 371 randomly selected retail locations across jurisdictions. “Out of that, almost two thirds of them were not charging the appropriate tax,” Kelly said. The agency said it forwarded the granular data to the Comptroller’s office for audit and enforcement follow‑up; ATCC did not announce agency enforcement actions tied to those findings during the hearing.
DLS analyst Yashoda Arai presented ATCC’s FY27 allowance of about $12 million, with personnel making up 79% of the budget supporting 60 regular positions and one contractual full‑time equivalent; DLS noted ATCC inspected roughly 3,200 retail tobacco establishments and about 2,300 licensed alcohol retailers in fiscal 2025.
On underage‑sales enforcement, Kelly described MOUs with local law enforcement (for example the Baltimore City Sheriff’s Office) that allow use of underage cadets or police cadets for compliance buys and said the agency maintains an anonymous tips line on its website for complaints.
The committee did not take formal votes during the hearing. DLS requested ATCC comment on significant year‑to‑year decreases in criminal violation counts and on newly added cannabis enforcement performance measures.
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