According to a study, New York is projected to fall short of its tax revenue targets from the sale of legalized cannabis. Marijuana sales in New York Fail after legalisation. Governor Kathy Hochul had initially anticipated generating $1.25 billion in revenue for the Empire State. Doing so within six years of legalizing recreational marijuana in 2021.
This prediction implied an expected revenue of approximately $56 million in the first year. With $40 million originating from licensing fees. The state hoped that subsequent years would witness a substantial boost in revenue. As businesses adapt to the new regulations and licensed operators sold the drug.
However, a report supported by medical marijuana operators asserts that the current restrictions on marijuana usage are excessively stringent. The report highlights that the slow process of issuing licenses to stores has inadvertently facilitated the growth of an “illicit market.” Resulting in only 13 functioning legal adult-use dispensaries in the state.
Marijuana Sales in New York Fail
As stated on the OCM website, only 15 dispensaries are presently operational in New York. Since the commencement of legal sales in December of last year.
In the budget for the 2024 fiscal year, Governor Hochul proposed granting additional authority to the OCM to crack down on unlicensed marijuana dispensaries, which are undermining potential tax revenues.
Recent enforcement actions have led to the raiding of illegal dispensaries. By the end of 2023, ten more medical marijuana operators are to begin selling to the general public.
During an interview with WNYC last week, Chris Alexander. The executive director of the OCM, expressed. “We recognize the challenges in terms of ensuring a smooth supply chain, but the primary solution lies in expanding the number of dispensaries. We remain dedicated to this goal and anticipate the opening of more dispensaries in the upcoming months.”
The initial target of $56 million in revenue for New York’s first year of legal cannabis sales falls significantly short. Comparing to other states’ achievements.
Rev. Kirsten Foy, representing the Coalition for Access to Regulated & Safe Cannabis, conveyed to the New York Post, “The current state of the cannabis market in New York is an unmitigated disaster. Despite its immense potential, regulators have neglected their duties. Hindering consumer safety, restricting equity participation, and depriving disproportionately affected communities. The intended beneficiaries of the Marijuana Regulation and Taxation Act (MRTA)—of millions of dollars in vital tax revenue.”