Maryland’s legal marijuana market, once expected to become a major driver of new jobs and tax revenue, is showing signs of economic stagnation just two years after the state legalized recreational cannabis use.
Industry leaders and state data point to a common culprit: a loophole allowing intoxicating hemp products to flood the market, undercutting licensed growers who invested millions to comply with strict regulations and high tax rates.
A multi-generational plant grower in rural Cecil County believes that greenhouses are the future of Maryland’s agriculture and budding marijuana industry, but has noticed that market sales have become flat since the state legalized recreational cannabis use.
Jake Van Wingerden’s one-stop-shop facility at SunMed Growers was buzzing with activity on Wednesday, with a portion of his 250-person workforce planting, watering, and packaging multiple variations of genetically modified marijuana plants.
Outside Van Wingerden’s greenhouses, other workers wore food-grade protective gear bearing his company’s logo as they packaged potent THC-infused gummies, oversaw machine-rolled joints by the thousands, and tended to hanging rows of marijuana plants cultivated with precision.
Now, Van Wingerden, who invested over $100 million to build his extensive 70,000-square-foot facility for Maryland’s legal cannabis industry, is watching his bold gamble face tempered consumer demand.
Our number one challenge right now is the prevalence of intoxicating hemp,” Van Wingerden said. “Intoxicating hemp is the exact same product that we produce.”
As Maryland’s adult-use marijuana market passes its second full year in operation, growth in overall cannabis sales has nearly stalled.
Statistics released by the Maryland Cannabis Administration (MCA) showed a 36.43% increase in sales of adult-use cannabis products from July 2023 to July 2024. This annual growth rate then declined by more than half, to 11.65%, when comparing July 2025 sales data to the previous year.
Total cannabis sales, including in-state medical marijuana purchases, showed a modest increase during the first year of cannabis legalization in Maryland. Sales rose from $91.8 million in August 2023 to $100.6 million in August 2024, reflecting a 9.59% growth.
MCA data shows that total marijuana sales have slowed to a crawl when comparing August 2025 data with August 2024, showing total cannabis sales only grew by 0.64%.
Van Wingerden told Spotlight on Maryland that high regulations and tax increases may not be the only cause of the slowed growth, but rather a legal loophole that allows hemp-derived THC products to thrive in an unregulated gray market.
The economic fallout is rippling beyond the greenhouse. Licensed cannabis operators must pay state and local taxes, hire security, and follow labor and environmental rules. Hemp sellers face none of those costs yet sell comparable — and often cheaper — products, diverting millions in potential tax dollars from the state’s legal market.
Unless lawmakers close the loophole and level the regulatory field, Maryland’s cannabis industry may struggle to sustain the workforce, infrastructure, and tax base that legalization was meant to create.
A business model built on trust – and testing
Van Wingerden’s interest in growing plants came naturally. His grandfather, a Dutch immigrant, began building greenhouses after immigrating to the United States following World War II. Three generations later, Van Wingerden’s family remains in the greenhouse business, but has adjusted to market demands.
Besides growing seasonal flowers like Poinsettias through a separate business, Van Wingerden’s team cultivates 40,000 to 50,000 marijuana plants at any given time in his facility. Inside SunMed’s climate-controlled greenhouses, Van Wingerden said he grows cannabis without harmful pesticides, processed on-site, and tested for purity and potency.
“Everything here is regulated,” Van Wingerden said. “We are heating on cold days. We are cooling on hot days. [We] are dehumidifying all the time, and we also have a lot of air movement through here.”
“Because we are regulated and tested and the product is consumed by ingesting it, we cannot spray, and we do not spray, harmful pesticides and fungicides on these plants,” Van Wingerden added.
Van Wingerden said the process of growing a marijuana plant from seed to a consumable product is meticulous.
Once the cannabis buds reach maturity, SunMed extracts oil and infuses it into chocolates, emulsifies it into beverages, or packs it into vape pens and joints. As a fully state-legal, vertically integrated operation, Van Wingerden said his industry is increasingly at odds with an illegal shadow market.
The rival to Maryland’s highly regulated weed: intoxicating hemp
Maryland law distinguishes between cannabis and hemp, but in practice, the boundary has become unclear. Van Wingerden highlights intoxicating hemp products, such as Delta-8 and Delta-9 THC, as the biggest threat to the state’s legal market.
Derived from hemp but chemically like cannabis, these products are sold online or in corner smoke shops, often without any license, age verification, or lab testing.
It’s a multi-billion dollar industry – it’s all over the place,” Van Wingerden said. “We see it in all the smoke shops in Maryland. You can now buy these products online; they can ship directly to you.”
Despite a September 2025 appellate court ruling giving Maryland the authority to regulate intoxicating hemp, Spotlight on Maryland was able to find THC-laden hemp products through common delivery apps, including drinks called “Weed Water.”
“What this loophole has done is, in every smoke shop on Main Street in Maryland, you will find THC-A, Delta-A, Delta-10 products that they claim are federally compliant, but they actually are intoxicating,” Van Wingerden said. “They’re untested, untaxed, unregulated, and up until last month, the state was unable to shut them down.”
“It’s a major issue for the regulated industry because we have to follow the rules,” Van Wingerden said.
Taxing legal weed – out of the market?
Adding to Maryland’s marijuana industry’s struggle to grow comprehensively, Maryland Gov. Wes Moore proposed and the Maryland General Assembly approved an increase in the cannabis tax from 9% to 12%, effective October 1.
The cannabis tax, according to state law, aims to fund public health programs and community equity initiatives, including “reinvestments” into areas “disproportionately” affected by past marijuana prohibitions.
While Van Wingerden said he hopes the state maintains the cannabis tax rate “right where it is,” he warns about potential unintended consequences in the future.
“If you keep raising the tax rateit gives an incentive for people to not buy at a regulated dispensary and through the regulated industry that [Maryland] created,” Van Wingerden said. “It makes [consumers] think about going back to the street dealer, which the whole intent going recreational-wise was to drive out the criminality.”
National security concerns emerge
The street dealer – or the illegal marijuana market – has also caught the attention of federal lawmakers.
Three weeks ago, a House Homeland Security subcommittee held a hearing investigating how illegal marijuana operations are connected to transnational criminal networks, including China-linked syndicates.
Let’s paint the picture together: a group of Chinese nationals, affiliated with foreign criminal organizations, crosses the southern border, makes their way into rural Oklahoma,” said Rep. Josh Brecheen, R-Okla. “With them are workers who have been lured under the false promise of good jobs in the United States.”
Rep. Brecheen continued during the hearing, saying in his scenario that “these Chinese nationals approach a local resident with an offer they cannot refuse – they offer the resident several hundreds of thousands of dollars, purchasing, using their time, their identity, to purchase a nearby tract of land.”
“In return, the resident gets to keep a share of the money with no questions asked,” Rep. Brecheen said. “In a matter of days, this newly purchased land becomes the site of a large-scale, illegal marijuana grow operation.”
A market in limbo?
Back in Earleville, Md., the greenhouses at SunMed continued humming on Wednesday. Workers inspected uniquely tagged and identified plants under grow lights, chefs tested new recipes in the edibles kitchen, and processors monitored oil extraction lines.
Much like California’s, Maryland’s cannabis industry was intended to serve as a model — an engine for job creation, safety, and social equity. Instead, regulators are struggling with legal loopholes, gray-market competition, and stagnant sales growth.
For growers like Van Wingerden, the stakes on the plant side of the “green economy” aren’t just financial; they’re existential.
“We want to create a safe, affordable product that people want to buy,” Van Wingerden said. “I don’t think the average person wants to go into the back street and go to an illegal dealer. They rather walk into a well-lit, well-secure location, where they can have choices, where they can smell and read the test results.”
If it’s double the cost, they’re probably going to choose more economic ways,” Van Wingerden added.
Moore’s office acknowledged Spotlight on Maryland’s request for an interview, saying “MCA would be the right agency” for discussion on the industry. A spokesperson for Moore did not respond to a request to set up an interview with an MCA representative.
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