New York State, which legalized adult-use cannabis in March, is on-track to generate a rather sizable $1.25 billion in cannabis taxes and fees within the next half-dozen years.

A recently published state budget forecast explored the financial outlook for New York’s cannabis retail scene, with the forecast noticeably spiking in 2023. 

Cannabis tax revenue earned through New York’s adult-use cannabis market – which will be collected at some point this year when legal sales commence – are expected to rake in the greatest amount of revenue.

Just $56 million in cannabis revenue is likely to be accrued by Gov. Kathy Hochul’s administration in 2023. Much of this amount will stem from business license fees and cannabis-focused revenue.

However, by the year 2028 (once the legal market is thriving,) state revenue is predicted to hit $363 million. 

New York’s cannabis tax revenue will likely bolster the states economy 

Adult-use cannabis sales in New York will be taxed according to the product’s potency of tetrahydrocannabinol (THC) — a primary psychoactive constituent of the cannabis plant. Stronger products will have a higher tax rate.

The state will also impose a nine percent excise tax, in addition to a four percent excise tax that will be collected by local governments. 

Based on the legal framework outlined in the MRTA, the state will funnel 40 percent of adult-use cannabis tax revenue toward rehabilitation efforts for communities worst-affected by the War on Drugs.

As of January, legal cannabis states across the U.S. have managed to attract more than $10 billion in tax revenue since sales kicked off. Cannabis taxes have the power to help strengthen local infrastructure and even assist drug addicts in getting on the road to recovery.

About the Marijuana Regulation & Taxation Act (MRTA) 

Cannabis in New York was officially legalized for adults aged 21 and older with the passing of the MRTA. However, consumers are not able to enjoy the plant anywhere they please. Cannabis smoking is prohibited anywhere that tobacco smoking is prohibited.

In order to stay in-line with state law, cannabis must be consumed in a private residence. Moreover once state-licensed on-site consumption sites eventually open their doors, social consumption will be permitted. 

According to the New York State Office of cannabis management, since impairment may result in slow motor coordination, driving under the influence of cannabis remains an illegal offense.

The law also stipulates that people who have been disproportionately impacted by cannabis prohibition can receive automatic expungement for past cannabis-related convictions.