Staff
This story was republished with permission from Crain’s New York and written by Amanda D’Ambrosio.
New York‘s legal cannabis market generated more than $150 million in sales in its first full year, according to data released by the state’s Office of Cannabis Management Friday.
More than 6,900 businesses have filed applications to sell cannabis products since the state opened its first legal dispensary in December 2022. But to date, just 40 dispensaries have been approved to sell adult-use products, the data shows. The state’s 40 legal dispensaries sold 3.5 million units of cannabis within the last year.
“We have a lot of work to do, and we have much to be proud of,” Chris Alexander, executive director at the Office of Cannabis Management, said in a statement. “Now that the core market architecture is in place, my team at OCM is ready to scale and help this industry thrive across New York state.”
Data on the market’s first year follows a slow rollout of legal cannabis across New York. High taxes on marijuana products and unclear regulations for new retailers have created difficult conditions for legal businesses to survive — especially as unlicensed retailers continue to dominate the market.
Analysts estimate that New York’s weed market could be worth as much as $7.5 billion this year. But most of those sales take place at unlicensed retailers. New York City has attempted to crack down on unlicensed weed sellers, imposing fines on landlords who house unlicensed cannabis businesses.
Additionally, Gov. Kathy Hochul signed new legislation in May allowing the Office and the Department of Taxation and Finance to close stores engaged in illegal cannabis sales and increase civil and tax penalties for those violations. The state conducted 369 inspections of illicit cannabis operations in 2023 and seized products worth $56 million, according to the Office of Cannabis Management.
The state of New York brought in $16.3 million in tax revenue from cannabis sales in the 2023 fiscal year and expects to bring in $16.6 million in the first half of 2024.
John Kagia, director of policy at the Office of Cannabis Management, said in a statement that New York has a diverse array of products on the legal market that are drawing consumers away from illegal operations. There are more than 500 unique strains sold legally in the state, Kagia said, including the top sellers: Blueberry Muffin, Gas Face, and Sour Diesel.
Kagia added that the Office of Cannabis Management expects to issue “hundreds more” adult-use licenses.
