As New York cracked down on unlicensed cannabis shops, sales of legal marijuana grew to reach a total of $33 million during the industry’s first six months, state records show.
But the legal cannabis marketplace, which launched in January, remains far from realizing the lofty political promises of state lawmakers who championed adult-use marijuana legalization in 2021.
Instead of generating hundreds of millions of dollars in tax revenue per year as projected, the cannabis industry produced about $4.3 million in sales tax receipts from January through June. That’s based on the state’s 13% retail tax rate on marijuana.
Even Gov. Kathy Hochul’s scaled-down projections for early legal marijuana revenues — at $56 million the first year, including $40 million in license fees — seem potentially overconfident as black-market marijuana continues to undermine legal sales.
How much legal marijuana is sold in NY?
After New York struggled earlier this year to open more legal marijuana dispensaries, a total of 20 dispensaries had opened by the end of June, up from 13 the prior month.
That jump in licensed dispensaries appeared to drive a nearly 50% spike in legal marijuana sales between May and June, officials with the state Office of Cannabis Management said during a July board meeting.
Still, about one-fifth of New Yorkers consume cannabis at least once a year, and 16% consume cannabis at least once a month, with demand largely met by unlicensed marijuana deals, officials added, citing federal data.
To grasp the scale of black-market sales, consider regulators had reported seizing about $11 million worth of marijuana during raids of unlicensed shops through June.
State regulators didn’t immediately respond Tuesday to a request for statistics on legal marijuana sales and tax revenues through July.
How NY cannabis sales compare to other states
New York has lagged far behind many other states that previously legalized adult-use marijuana businesses.
Colorado, for example, collected $325 million in marijuana tax revenue in 2022. That brought the state’s overall tax windfall from marijuana to more than $2.3 billion since it legalized the drug for adult use in 2014.
Colorado’s first-year haul from marijuana tax revenue in 2014 totaled nearly $68 million.
Meanwhile, New Jersey, which kickstarted adult-use marijuana sales in April 2022, has outperformed New York in terms of early sales in the increasingly competitive Northeast legal weed marketplace, which includes Connecticut, Vermont and Massachusetts.
In the first six months of legal marijuana sales in 2022, New Jersey saw about $196 million in cannabis sales, or nearly six times New York’s half-year tally of $33 million in 2023, state data show.
And those early comparisons suggest New York regulators have plenty of work left to meet Hochul’s budget projections, which assert the state will reap more than $1.2 billion in tax receipts and other revenue from its legal marijuana industry over the next six years.
Further, the early sales figures are even more strikingly low in comparison to pre-legalization estimates. That includes some industry reports that projected up to $566 million in legal weed sales in 2023.
H/T: www.democratandchronicle.com
