Herb Report: New York’s Legal Cannabis Market Expected To Surpass The One Billion-Dollar Mark
After two year since New York opens its first legal dispensary, officials anticipate hitting the billion-dollar mark by the end of December.
Words by Damian Nicholas
FP
New York's legal marijuana market is poised to reach a significant milestone soon, with sales expected to surpass $1 billion since the first dispensaries opened two years ago. As of last week, total sales were reported at $863.9 million, a substantial rise from $500 million just a few months earlier, according to the Office of Cannabis Management (OCM). Officials anticipate hitting the billion-dollar mark by the end of December.
These figures clearly show that New York is ready for business, and there’s strong momentum in the market.
– John Kagia. Policy Director, New York Office of Cannabis Management
After an initial slow rollout affected by lawsuits and other interruptions, the state's legal marijuana sales have surged in recent months. This growth has been driven by an increase in licensed businesses and successful efforts to eliminate unlicensed shops.
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This spring, New York City launched Operation Padlock, an initiative aimed at closing down illegal dispensaries. Following this crackdown, licensed stores that had been operating before the initiative reported a remarkable 105 percent rise in sales, according to an OCM survey. A spokesperson for Governor Kathy Hochul highlighted that these enforcement actions have led to the closure of over 1,000 illegal dispensaries statewide.
The spokesperson emphasized, “Her policies have transformed the industry, boosted local business revenues, and encouraged reinvestment in communities that suffered from historical injustices—all while fostering the most equitable cannabis market in the country.” Governor Hochul argued in June that there is a direct connection between increased enforcement and substantial growth in legal sales. State Comptroller Tom DiNapoli's office also revealed that New York is on track to double its cannabis revenue compared to the previous year. By June, the state had collected $16.6 million in cannabis-related revenue for 2024.
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Despite these promising figures, New York still trails behind several other states when it comes to legal cannabis. Currently, New York has 245 licensed cannabis shops, while Oklahoma has nearly 1,900. Furthermore, New Yorkers spend less than $50 per person on cannabis, compared to sales exceeding $300 per resident in states like Alaska and Michigan. A report released earlier this year by state officials acknowledged both the challenges and achievements of New York’s cannabis market thus far. While the state faced various hurdles during the early years of legalization, including a slow rollout and leadership issues, the report expressed optimism regarding the future. It highlighted that more than half (54.7 percent) of adult-use licenses have been granted to social and economic equity applicants, intending to provide opportunities to those most impacted by past prohibitions.
The report found that most cannabis consumers in New York are now choosing to shop at licensed stores, with 67 percent of residents who used cannabis in the past year reporting purchases from legal retailers. In addition, the legalization of cannabis has resulted in the sealing of over 200,000 cannabis-related convictions, with another 107,000 pending sealing. Moreover, more than 400,000 criminal records are eligible for expungement under the Marihuana Regulation and Taxation Act, which is New York’s law on cannabis legalization.
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Importantly, the report stated, “No individual in New York remains incarcerated solely for a marijuana-related offense.” Governor Hochul's commended the state’s rapidly evolving cannabis industry, celebrating the surpassing of $500 million in sales. “Thanks to our initiatives to close illegal storefronts and support licensed dispensaries, New York’s legal cannabis sector is reaching unprecedented heights—crossing the $500 million mark in sales!”
While we acknowledge the work ahead, we are committed to refining our data collection, enhancing customer service, focusing on public health, and collaborating with stakeholders to disrupt the illegal cannabis market.
– Felicia A.B. Reid. Acting Director, New York Office of Cannabis Management
While this progress is noteworthy, it remains modest compared to other states; for instance, Illinois recorded nearly $2 billion in legal cannabis sales in 2023 alone. Governor Hochul reiterated that the intensified enforcement against illegal shops is significantly contributing to the growth of legal sales at licensed retailers.
Dec 12, 2024
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