More than two years after pledging support for cannabis legalization, New York Gov. Andrew Cuomo signed a legalization bill Wednesday morning that will pave the way for an adult-use market to be launched sometime in early 2022. The states medical program saw slow growth from its start, just reaching $111 million in sales in 2020, but the legalization of adult-use will reposition New York to be one of the biggest cannabis markets in the country by 2026.
Gov. Cuomo has signaled his openness to adult-use cannabis since early 2019, but disputes over licensure, tax rates and the allocation of cannabis revenue have blocked the progress of adult-use legalization until just last week. While previous efforts focused on using the state budget as a method to legalize, the Governor’s office and legislature agreed on a separate bill, which passed through the legislature on March 30, 2021 and was signed into law the next morning. BDSA predicts that sales will start in Q1 2022.
In contrast to some other states that have legalized through legislative action, New York’s Marijuana Legalization and Taxation Act takes a less rigid approach to legalization, allowing for adults over 21 to grow six plants at home and possess up to three ounces of flower or 24 grams of concentrate. The law also expunges all previous convictions for cannabis offenses that are currently legal and sets a goal of issuing 50% of all adult-use licenses to social and economic equity applicants. All cannabis sales under the new law will be subject to a 13% excise tax. Another tax will be collected at the distributor level, ranging from .5 cents per milligram of flower to 3 cents per milligram of edible.
New York’s restrictive medical regulations have led to slow growth in its cannabis market so far, but the state still boasts a population of about 15 million adults aged 21 and over, giving it huge potential for growth. BDSA Consumer Insights surveys show that 29% of New York respondents report consuming cannabis in the past 6 months, while 38% are not consumers but are open to consuming cannabis. For comparison, in Spring 2018 BDSA found that 30% of Californians surveyed reported consuming cannabis in the past 6 months, while 32% reported being open to cannabis consumption. BDSA’s Fall 2020 Survey found that the share of Californians who report cannabis consumption has grown to 39%, suggesting that New York has great potential to increase its consumer share as it transitions to adult-use sales.
New York is expected to bring in $601 million in adult-use sales in 2022, as well as $148 million in medical sales. By 2026, BDSA forecasts adult-use sales to reach $2.3 billion, with medical sales totaling $102 million. This would make New York the fourth largest cannabis market in the U.S., following California, Colorado, and Florida.