That’s a lot of green!
Legal marijuana sales in New York are booming, surpassing the $500 million mark, fueled, officials say, by a crackdown on illegal sellers who force buyers to buy the real stuff.
Sales topped $529 million in the middle of this month, according to John Kagia, policy director for the state’s Office of Cannabis Management – less than eight months after the city’s first legal store opened in Manhattan and more than three years since the drug was legalized.
Governor Kathy Hochul predicts that the state will generate $1.25 billion in tax revenue from the young industry within six years.
“The speed is there,” Kagia told the Cannabis Advisory Board during a meeting on Tuesday.
Kagia attributed the increased sales to Operation Padlock, a police crackdown on businesses that illegally sell marijuana.
Nearly 40 percent of New York’s legal marijuana sales have come since police began shutting down illegal marijuana shops in mid-May.
Kagia said that more than two dozen legally licensed marijuana dealers alone have seen a 100 percent increase in sales since the raids began.
The duly licensed cannabis retailers told OCM that new customers were coming into their stores and said their old store had been closed for police reasons, Kagia said.
“It’s a really powerful testament to the results we can achieve thanks to the state’s commitment to shutting down these unlicensed dispensaries,” Kagia said.
But the sensational move has not met with any criticism – including from a judge whose ruling on the methods used could jeopardise hundreds of branch closures.
The judge recently found that the city had bypassed part of the legal process to close the illegal sites.
Regardless, Kagia told the Cannabis Advisory Board he expects legal marijuana sales in New York to continue to rise through the second half of 2024.
Cannabis products are taxed by the state based on the amount of THC they contain, which is the chemical compound that makes people high. This is according to the budget briefing book. This tax rate is not specified there.
The state also imposes a 9 percent consumption tax and local governments impose a 4 percent consumption tax in addition to the state and local sales tax.
Due to lawsuits and a bumpy introduction with licensing delays, much tax revenue from the legal marijuana trade was initially lacking.
