New York’s efforts to ‘reinvent the wheel’ of adult-use cannabis legalisation could be impacting the growth of the state’s industry.
Business of Cannabis reported last month that a new report from the Coalition for Access to Regulated & Safe Cannabis suggested that New York was unlikely to meet its ambitious tax revenue targets.
According to the report, New York had only seen around $16.5m in tax revenues by the end of May 2023, with projections this figure would hit $40m by the end of the year, significantly less than the $56m touted by Gov. Kathy Hochul.
Analysis from cannabis industry expert and veteran reporter Jeremy Berke suggests that the ‘anaemic pace’ of licensing pointed to in the report was largely due to the state’s efforts to ‘reinvent the wheel’.
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New York’s cannabis regulators have intentionally rolled out licenced cannabis stores slowly, Mr Berke explained, in an effort to give social equity entrepreneurs a fair chance at competing with larger companies with more cash on hand.
While the reasoning behind this strategy is noble, the execution has meant that tax revenue has been lacklustre.
Numerous studies have found that the rapid roll out and lack of red tape are crucial for an emerging market to be able to compete with the legacy sellers and bring in tax revenue.
There are currently only 15 legal cannabis shops in the state, but lax enforcement has enabled illicit stores to continue to thrive.
