After a slow rollout, New Yorkers have been flocking to pot shops since legalized weed became available for retail sales two years ago, and that bodes well for the government’s tax coffers.
A new report from the New York State Office of Cannabis Management said adult-use cannabis sales have topped $1 billion since 2022, with more than 300 licensed pot shops now open for business across the Empire State.
“This milestone is a testament to the resilience, hard work, and innovation of cannabis entrepreneurs across New York,” Felicia A.B. Reid, the cannabis office’s acting director, said in a statement. “Certainly, this moment underscores the strength of consumer demand for regulated cannabis-importantly, it firmly demonstrates that a social and economic equity approach to industry is not antithetical to strong economic growth.”
Retail pot sales have generated $22 million in combined tax revenues for local governments, including $7.9 million for New York City, according to state Comptroller Tom DiNapoli’s office.
“The tax revenue generated by this thriving industry directly supports our Community Reinvestment Grant Program, ensuring that communities disproportionately impacted by cannabis prohibition receive critical investments,” New York Cannabis Control Board Chair Tremaine Wright said in a statement. “This is only the beginning of what’s possible when we invest in an inclusive and well-regulated industry.”
New York legalized recreational cannabis in 2021 under legislation signed by then-Gov. Andrew Cuomo, allowing cultivation and retail sales and setting up a system of taxation and regulation for the new industry. To date, about 300 retail pot shops have opened, state regulators say.
The rollout was slowed by legal challenges, including a ruling by a New York judge that halted new licenses under a program that favors people with previous drug conviction charges. The ruling stemmed from a legal challenge by veterans who argued that the system of issuing licenses to certain social equity applicants violates the state Constitution.
Meanwhile, illegal storefront operations have proliferated amid the delays in licensing legal pot shops, prompting calls to Hochul and Eric Adams to crack down on unlicensed sales.
Last year, Hochul launched a taxpayer-funded public education campaign calling on pot users to “buy legal” and urging them to avoid the black market. Her administration also pushed a bill through the Legislature to expand the enforcement powers of regulators and taxing agencies to inspect and shut down unlicensed pot shops.
State regulators say the crackdowns have led to more than 450 illegal potshots being shut down, with nearly 17,000 pounds of unlicensed cannabis products confiscated.
To date, at least 23 states, the District of Columbia and the U.S. territory of Guam have legalized recreational marijuana, according to the National Conference of State Legislatures. Thirty-eight states have medical marijuana programs.
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