Two Key lawmakers in the state Legislature are calling to make changes to the way New York taxes cannabis, as the state plans for the launch of this new market this year. Assembly Majority Leader Crystal Peoples-Stokes and state Sen. Jeremey Cooney announced a measure that would revamp the tax structure that exists currently in the state, calling the current system “overly complex, unnecessarily costly.”
How it Differs From the Current Proposal
The current tax which is based on potency would be replaced with an increase to the current excise tax. However, it was not inherently clear what the financial implications would be if the proposal gets through final approval. Lawmakers’ overall goal of this was to boost fairness in the system for businesses and consumers when it comes to tax on cannabis.
“After careful consideration, it became clear that we need to simplify the tax structure of adult-use cannabis,” said Peoples-Stokes, who led the initial effort to legalize cannabis for adult use in New York. “As the state continues to build out licensed cannabis operations, a simpler tax structure will be better for businesses and consumers. It is imperative to establish the licensed cannabis marketplace as the best option for consumers and stamp out the illicit cannabis operations popping up all over the state. This new tax approach will ultimately lead to thriving cannabis businesses at all levels of the supply chain. We will see higher tax revenues, which will result in more funds being reinvested in communities and invested in education and other important programs.”
NY Gov. Still Negotiating Bill
The proposal comes among NY lawmakers and Gov. Kathy Hochul still navigating the broader $227 billion budget plan, which is expected to pass on April 1, which is the start of the state fiscal year. “If we are going to meet our goal of building the most diverse and inclusive cannabis market in the nation, we must create an environment where small businesses can thrive,” Cooney said. “Replacing the potency tax with an increase in the excise tax will allow licensed operators, including social equity operators, to sell competitively-priced products and be less susceptible to undercutting by illicit market prices without sacrificing revenues to be reinvested and used for valuable community programming.”
Wrap Up
Cannabis regulators in the state announced just before this legislation was introduced, that they would double the number of dispensary licenses in New York from 150 to 300 amid a court injunction that has impacted the growth of the industry in several areas around the state.