New York’s Cannabis Tax Revenue Soars to $161.8M After Slow Start

Race Day Live (New York City, NY) – After a hesitant start, marijuana sales in New York are beginning to provide a cash boost.

The Empire State is expecting to produce $161.8 million in tax income from its legal marijuana sector in the fiscal year ending March 31, four times what it did last year.

Gov. Kathy Hochul’s budget, issued last week, also forecasts $248 million in revenue from the state-licensed cannabis market for the fiscal year beginning April 1 and ending March 31, 2026.

That’s a lot of green — up from $43.3 million in 2022-2023, despite the program’s uneven implementation.

According to state budget officials, revenues will increase to $339 million in FY 2027, $363 million in 2028, and $374 million in 2029 as the legal market expands.

The state levies taxes on marijuana wholesalers and retail products.

Cannabis businesses are subject to a 9% wholesale excise tax, while a 13% excise tax is assessed on retail sales, with 9% going to the state and 4% going to participating localities like New York City.

An excise tax of 3.15 percent is also levied on the gross receipts of medical cannabis businesses that have been in operation for a decade.

Forty percent of the state’s legal cannabis tax revenue is allotted to school financing across the state, with the other forty percent going to a community reinvestment program that will provide grants to neighborhoods most devastated by cannabis prohibition.

The recipients of the first batch of $5 million in financing will be announced soon, officials added.

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The market has picked up in recent months following a bumpy debut hampered by lawsuits, a vast illegal market, and massive backlogs in the issuing of retail licenses by the often-criticized, underfunded, and overburdened OCM.

Since then, law enforcement officials have increased their inspections and closures of illegal marijuana operators under a new state law, while court disputes that had stalled the opening of new legal cannabis dispensaries have been addressed.

Reference