Report: Legal marijuana sales in New York losing millions in taxes as illegal market thrives.

New York’s Legal Marijuana Market Falls Short, Losing Millions in Tax Revenue

A new report, supported by medical marijuana operators, reveals that New York is missing out on significant tax revenue from its underperforming legal marijuana sales, while an illegal market continues to thrive.

Initially, it was projected that legal marijuana sales would generate $56 million in tax revenue for New York in its first year. However, the state is currently not on track to meet that goal, according to the Coalition for Access to Regulated & Safe Cannabis.

Since the opening of its first legal dispensary in December, New York has only managed to raise $16.5 million in retail revenue, as stated in the report.

Currently, there are only 15 dispensaries operating in the state, according to New York’s Office of Cannabis Management. In contrast, New York City alone has hundreds of illegal pot dealers operating outside the purview of state regulators.

Recreational marijuana has been legal in New York since 2021, following the implementation of the Marijuana Regulation & Taxation Act.

“The current state of the cannabis market in New York is an unmitigated disaster,”

said Reverend Kirsten Foy of the Coalition for Access to Regulated & Safe Cannabis.

“Despite its enormous potential, regulators have neglected their responsibilities and their failure to act puts consumers at risk, restricts equity participation, and disproportionately impacts communities that were intended to benefit from the MRTA. These communities are missing out on millions of dollars in critical tax revenue while consumers remain at risk,” Foy added.

Even if New York were to achieve its $56 million tax revenue goal this year, it would still lag far behind other states that recently legalized marijuana.

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California, for example, generated $397 million in tax revenue during its first year of legal marijuana sales. In 2022, California surpassed $1 billion in tax revenue.

During their first year, at least seven other states exceeded New York’s revenue goal: Illinois generated over $216 million, Washington generated over $159 million, Arizona made over $153 million, Nevada made over $120 million, Michigan made nearly $82 million, Oregon made over $68 million, and Massachusetts made over $62 million.

Even Colorado, one of the first two states to legalize marijuana alongside Washington, generated $46 million in tax revenue in its first year in 2012. Montana, with a population of just over a million compared to New York’s 19 million, made $42 million in tax revenue from its first year of legal marijuana sales.

Democratic New York Governor Kathy Hochul had anticipated a staggering $1.25 billion in tax revenue from legal marijuana sales over the next six years, as indicated in her 2023 budget plan.

In an effort to address the slow rollout of the legal cannabis market, the state’s Office of Cannabis Management has proposed various solutions, including allowing farmers to sell cannabis at farmer’s markets.

“We acknowledge the supply chain issues and the need for more dispensaries. We are diligently focused on opening more dispensaries in the coming months,” said Chris Alexander, the executive director of the agency.

New York State regulators have also conducted raids on unlicensed weed shops in Manhattan.