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By: Benyamin Davidsons
New York State is finally starting to see financial gains from legal marijuana sales, following a slow start. As reported by the NY Post, NYS is slated to generate $161.8 million in tax revenues from its legal weed business for the fiscal year ending March 31. This sum is four times more than what it raked in last year from the legalized sales. Last week, when Gov. Kathy Hochul released her budget released she projected that next year, the state-licensed cannabis industry is expected to generate about $248 million in revenue, for the fiscal year running from April 1 to March 31, 2026.
Further estimates from NYS budget officials predict the revenues will grow to $339 million in Fiscal year 2027, to $363 million in 2028 and to $374 million by 2029, based on the expected expansion of the legalized market. In the 2022 to 2023 fiscal year the initiative had raised $43.3 million for the state.
Per the Post, the state taxes come from both wholesalers and retail products. The state imposes a wholesale excise tax of 9 percent on cannabis firms. There is also an excise tax of 13 percent at the retail sales level — with 9% going towards the state and the other 4% going to participating localities including New York City. There is also an excise tax of 3.15 percent on the gross receipts from medical cannabis firms, which has been in place for a decade.
The state is supposed to use some 40 percent of it’s revenue from legal cannabis taxes towards funding education, while another 40 percent is allocated towards a community reinvestment program which will provide grants to neighborhoods most impacted by previous cannabis prohibition.
The legalized cannabis market had a rough start, after being impeded by a string of lawsuits, delays in awarding retail licenses by the Office of Cannabis Management, and competing with the continued illegal market. Law enforcement officials had to ramp up their inspections and actively shut down illicit weed operators with the help of a new state law, and the court cases have since been settled, now causing the market to see improved revenues.
Gov. Hochul had also ordered managerial changes at the OCM and added staff to speed up the process of granting licenses, following criticism for the agency last year. There are currently 295 licensed cannabis dispensaries in New York state, 115 of which are in NYC — up from just 41 at the end of 2023.
As per the Post, New York State’s licensed cannabis industry has now surpassed $1 billion in sales. This milestone will be celebrated in the state Capitol Building on Tuesday, with the Alfred E. Smith Building in Albany and the Empire State Plaza being lit up in green to celebrate the growth in the legal weed business.
“Last year I fought for new laws to crack down on illegal cannabis shops — and we got it done,” Hochul told The Post. “Now, legal entrepreneurs are thriving while lawbreakers are being held accountable. It’s extraordinary to reach this milestone of $1 billion in retail sales, and I’m confident the success will continue as New York’s nation-leading equitable cannabis industry grows.”
