New York Could Pull in Huge Bucks With Taxes on Recreational Marijuana

Marijuana Use
InnerVisionPRO /

Governor Andrew Cuomo and New York legislators have reached an agreement that could legalize cannabis use across New York state for adults age 21 and up, according to an article by Bloomberg Politics. The article quoted state Senate Finance Committee Chair Liz Krueger as telling Bloomberg Government, “It is my understanding that the three-way agreement has been reached and that bill drafting is in the process of finishing a bill that we all have said we support.”

See: American Bankers Association Urges Congress to Pass Cannabis-Friendly Banking BillFind: NY CEOs Join Forces to Sound the Alarm Over $1.5 Billion Tax Hike

But legalization won’t come without hefty taxes on the controlled substance. Cannabis sales could face a sales tax of 13%, with 9% going to the state. As with sales tax on clothing and other items, localities could set their own rate, up to 4% in this case, Time Out New York explains. Distributors would also be responsible for collecting an excise tax of up to 3 cents per milligram of tetrahydrocannabinol, the active ingredient in cannabis products, says Bloomberg.

Taxes imposed on cannabis sold for legal purposes would remain unchanged, Kreuger told Bloomberg.

Governor Cuomo’s office said that a legal cannabis program could bring in as much as $350 million for the state. Cuomo is considering the legislation as part of the state budget legislation, but other lawmakers want to separate the debates as they set cannabis legalization policies, Bloomberg reports.

See: What States Will Make From Marijuana LegalizationFind: Marijuana Investing — How to Navigate the Opportunities and Pitfalls in This Budding Industry

Legislators want tax revenue to go toward covering the cost of overseeing the regulation of cannabis, and then to helping people rebuild their lives after marijuana possession arrests, Bloomberg says.

“Putting those programs into the legalization law will mean that Cuomo wouldn’t be able to count on that burst of new revenue to close a $2.5 billion budget hole anticipated in the next fiscal year,” Bloomberg reports.

Make Your Money Work for You

New Yorkers will be permitted to possess up to three ounces of marijuana and grow their own plants for personal use, according to TimeOut.

More from GOBankingRates


See Today's Best
Banking Offers