New York Cannabis Legalization

On July 7th, 2014, Governor Andrew M. Cuomo signed into law the Compassionate Care Act to establish a medical marijuana program (“program”). The law set the framework for the medical marijuana program: patients with one of  the listed medical conditions could buy and use marijuana if recommended to them by a physician: Marijuana is increasingly being used for treatment of chronic diseases such as Parkinson’s disease, cancer, arthritis, Alzheimer’s disease, along with neurological disorders such as depression, anxiety, and epilepsy. Smoking and whole flower cannabis products were not permitted.

On July 12, 2018 the New York State Department of Health (NYSDOH) adopted emergency regulations adding any condition for which an opioid may be prescribed as a serious condition for which patients may be certified to use medical marijuana.

On Oct. 5, 2021, the New York State Office of Cannabis Management (OCM) and the Cannabis Control Board allowed the sale of whole flower medical cannabis products.

New York Medical Cannabis

In 2019, New York’s medical cannabis patient registry increased by more than 23,000 to over 110,000 patients and grew further to 151,286 certified patients in 2021 with 3,462 registered practitioners in the program.

In January 2022, the OCM announced the launch of a new Medical Cannabis Program certification and registration system. The program allows the certification of a patient by a practitioner for any condition that the practitioner believes can be treated with medical cannabis. Patients certified through the new system receive their certification from the OCM.

New York Hemp Industry

As of December 31, 2023, there were 120,423 patients and 4,248 practitioners registered in the program, 10 Registered Organizations (ROs) were approved to do business in New York State with 40 dispensing locations where patients can buy medical marijuana products. On October 31, 2023, the Board opened the application window for new ROs to apply to participate in the medical cannabis market.

New York Recreational Cannabis

In March 2021, the state legalized a recreational New York cannabis market that is “expected to become one of the largest in the country with projected revenues of nearly $2.5 billion by the program’s fourth year”. Cannabis products would be taxed at 13% and an additional tax would be imposed on production as follows: 0.5 cents per milligram for flower, 0.8 cents per milligram for concentrated cannabis and 3 cents per milligram for edibles.

In the first quarter of 2023, New York passed legislation that exempt businesses from Section 280E of the federal tax code that allows cannabis companies to deduct business expenses from their state income taxes.

How to Start a Cannabis Business in New York?

In September 2023, New York regulators voted to allow the state’s medical cannabis operators to apply for adult-use retail and microbusiness licenses.

On October 4, New York opened a 60-day general application window for several types of cannabis business licenses, including cultivation, processing, distribution, retail and microbusiness, with a priority on social and economic equity. By the close of the submission deadline on December 18, 2023, the Office received 6,934 applications for adult-use licenses, including 372 cultivator, 538 processor, 351 distributor, 4,324 retail, and 1,349 microbusiness licenses.

As of December 2023, the Board has awarded 279 adult-use conditional cultivator, 40 adult-use conditional processor and 463 conditional adult-use retail dispensary licensees. Although hundreds of CAURD permits have been issued, only 41 of these licensees have received final approval to open an adult-use cannabis dispensary, and 4 licensees have been approved for delivery-only operations.

Conditional Adult-Use Retail Dispensaries (CAURD) licensees are the first retail dispensaries to open for legal adult-use cannabis sales in New York State. New York’s first legal adult-use cannabis sales started on December 29 at a dispensary in Manhattan and generated over $1.6 million in the first month and an estimated $12 million in the first six months of operations. The Office of Cannabis Management reported almost $150 million in retail sales in 2023.

New Yorkers spent most of their dollars (46%) on flowers, including 15% on pre-rolled forms. Concentrates, the next largest share of the cannabis sales, captures 34% with over 79% of this contributed by vaporizers. Edibles, with 19%, came in third and other products categories represented about 1% of the marketplace.

New York Cannabis Market Infographics