While many other states quickly release sales figures for new cannabis markets, New York has been conspicuously silent.
Missouri? $13 million. Connecticut? $250,000 on day one. New Jersey? Dispensaries grossed $1.9 million from sales to 12,438 customers on the first sales day; 12 of the 13 authorized sales locations were open that day.
Even Vermont reported its new cannabis market sales. In the first two months of the legal market in the state, October and November 2022, Vermont adult-use cannabis sales topped $6.1 million.
New York has stressed that it is taking its program slow and doing it “right” in order to address social equity applicants. So far only two adult-use stores have opened: Housing Works in the last days of 2022 and Smacked shortly after. A third plans to open on Feb. 13.
But inquiries to the New York Office of Cannabis Management and the existing stores regarding sales figures have been met with silence. None responded to a request for information on sales.
Breaking Down the Numbers We Have
According to the year-end report from the OCM, the state collected zero taxes for adult-use cannabis sales in fiscal year 2022 and is forecast to collect $56 million in fiscal year 2023. (New York’s fiscal year runs from April 1-March 31.)
Data for the OCM report is through September 2022. The state’s THC-based and retail excise taxes on the sale of adult-use cannabis products are expected to generate $95 million during the first full year of receipts – meaning FY2024.
In 2021 and the first half of 2022, conditional licensees made up all of the office’s adult-use application and license fee revenue. The AUCC, AUCP, and CAURD licenses all required a $2,000 nonrefundable application and license fee. Total adult-use cannabis revenue from April 1, 2021, to March 31, 2022, was $120,000. The revenue from April 1, 2022, to Sept. 30, 2022, was $1.1 million.
The report stated that the last registration renewal period for the 10 medical cannabis ROs (registered organizations) was in July 2021, which resulted in revenue of $2.1 million. RO registration renewal fees are $200,000 per registration period. This registration renewal will expire in two years with the next renewal due in July 2023.
From April 1, 2021, through Sept. 30, 2022, there were no fines issued to any ROs.
Total medical cannabis revenue from April 1, 2021, to March 31, 2022, was $15 million. The revenue from April 1, 2022, to Sept. 30, 2022, was $6 million.
The state collected $13 million in taxes from medical cannabis sales for FY2022 and estimates that will remain the same for FY 2023.
Revenue is only one part of the story, however.
The OCM was asked about its budget and how much it costs the state to run, but the OCM did not respond. However, on Jan. 18, 2022, Gov. Kathy Hochul’s proposed budget for fiscal year 2022-23 included “cannabis management” as a line item set to receive $46 million for the upcoming fiscal year, April 1, 2022, through March 31, 2023.
The office began with 14 staff in October 2021 and has since grown to 135 staff, with 99 based in Albany and 36 based in New York City. The site currently lists four jobs open that pay between $88,000 and $120,000.
In sum, New York state has spent $46 million on its cannabis program. In the fiscal year 2022, the state collected $15 million on the medical program, $12.9 million in tax revenue, and $2.1 million in registration fees. It collected $864,200 during that same period for cannabinoid hemp and $120,000 for adult-use cannabis. This adds up to a rough total of $16 million.
Looking ahead, the state expects to collect $56 million in taxes. So far only three dispensaries will be open in February. The two dispensaries that are open have been criticized for having expensive products, and quick physical checks have shown that both stores have not been overwhelmed with customers.
Since no one wants to discuss sales figures, it’s difficult to know if the state will hit its goals.
By comparison, Massachusetts recorded $1.3 billion in cannabis sales in 2021 and collected $74 million in tax revenue. Illinois collected $100 million in cannabis taxes in 2021 on sales of $1.3 billion. It’s not an apples-to-apples comparison by any means, however, it does demonstrate the level of sales needed to deliver the hoped-for tax receipts.
New York will be nowhere near hitting these marks at this rate. Granted, it’s expensive to launch these programs and it takes time for these programs to get established. However, with the medical market flatlining and the adult-use market under pressure, it will take New York cannabis much longer to deliver on its promise of being a tax-positive endeavor.
February 9, 2023 at 4:33 pm
2.2 million out of Housing Works in the month of Jan.
2.6 by Feb 4th.
February 10, 2023 at 8:12 am
Is that an official number from Housing Works or the OCM?
February 10, 2023 at 10:18 am
Where did you get these figures? Are they published anywhere?