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Sale of Tobacco Products in Maryland

The Escrow Act

Complementary Legislation

Maryland Tobacco Directory


Only the brands and brand families listed in this directory may be stamped, offered or possessed for sale in the State of Maryland.

The Directory is in PDF format.
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The Tobacco Product Manufacturers Escrow Act

In 1999, the Maryland General Assembly enacted the Tobacco Product Manufacturers Escrow Act (Escrow Act), Maryland Code Annotated Business Regulations Article Bus. Reg. § 16-401 et seq.  Under the Escrow Act, a tobacco product manufacturer must either a) become a "Participating Manufacturer" or "PM" by joining the MSA and generally comply with its financial obligations, or b) establish an escrow account as a "Nonparticipating Manufacturer" or "NPM," and pay into it pursuant to Bus. Reg. § 16-403(a)(2).

Under the Escrow Act, NPMs must establish a "qualified escrow account," meeting the requirements of Bus. Reg. § 16-402(g), and obtain approval from the Attorney General of the escrow account's governing agreement.  Maryland has a model escrow agreement to assist NPMs with properly establishing their escrow.

NPMs must also certify to the Attorney General by April 15 of each year that they have complied with the Escrow Act by depositing the appropriate amount into escrow for all sales during the prior year.  NPMs that sold cigarettes or "roll-your-own" tobacco in Maryland during 2009 are required to submit a 2009 Certificate of Compliance to the Attorney General by April 15, 2010.

A tobacco product manufacturer that sells its products in Maryland and fails to either join the MSA or comply with the escrow provisions is subject to litigation and civil penalties.  The penalties to which tobacco product manufacturers may be subject are set forth in Bus. Reg. § 16-403(c)(3)-(6) and include a prohibition on the sale of cigarettes and "roll-your-own" tobacco to consumers within Maryland, whether directly or through a distributor, retailer or similar intermediary or intermediaries, for a period of up to two years, as well as fines of up to 300% of the original amount improperly withheld from escrow.

 

 

Attorney General of Maryland 1 (888) 743-0023 toll-free / TDD: (410) 576-6372
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