NYC high on its own supply as pot taxes skyrocket — but cannabis insiders say surge can be higher
- New York City’s marijuana tax revenues are rising, projected to reach $24 million in fiscal year 2026 and $33 million in 2027, fueled by a growing number of licensed cannabis dispensaries.
- Despite the increase in dispensaries—more than doubling to 211 by the end of 2025—tax revenue growth is slower than the market expansion due to competition, lower prices, and illegal sales undercutting licensed stores.
- Illegal pot sales, including "drug igloos" on sidewalks and illicit sales at convenience stores, are diverting business from legal dispensaries, limiting potential tax revenue gains.
- The city imposes a 4% use tax on cannabis products in addition to the state’s 9% sales tax, and tax revenue is expected to increase modestly (9%) from 2028 through 2030 as the market matures statewide with 593 licensed shops.
They could be higher.
The Big Apple got more money to burn thanks to legal pot sales — but the surge in tax revenue still isn’t matching the growing cannabis industry, city officials said.
Marijuana tax revenues were projected to hit $24 million in fiscal year 2026 — a 33% increase from the prior year, according to Mayor Zohran Mamdani’s $127 billion preliminary budget plan released Tuesday.
The tax revenues from legal sales of adult-use recreational weed were forecast to generate $33 million in the 2027 fiscal year that starts July, a 37.5% increase, the documents said.
Year-to-date collections from the city’s cannabis levy have skyrocketed by 50%, the revenue plan stated.
It comes as new cannabis dispensaries open, expanding access to weed products while existing shops expand their customer base, the budget plan said.
But cannabis industry insiders said more tax revenue could be raised if city and state authorities cracked down on illegal pot shops and peddlers that are diverting business from licensed dispensaries.
“Collections growth has not been as rapid as the expansion in store openings because of competition among suppliers as well as lower cannabis prices. Sales per store in NYC have been dropping each quarter since the end of calendar year 2025,” the mayor’s budget office said.
On average, eight licensed cannabis stores have opened monthly since July 2025, bringing the total to 211 by year’s end — more than double the 105 shops at the end of December 2024.
Morning Report delivers the latest news, videos, photos and more.
Please provide a valid email.
By clicking above you agree to the Terms of Use and Privacy Policy.
Never miss a story.
Adult use cannabis tax revenue were projected to increase 9% from 2028 through 2030 as the market matures.
The city charges a 4% use tax on cannabis products on top of the 9% levied by the state on retail sales.
The Post recently discovered drug dealers brazenly selling marijuana on sidewalk tents in The Bronx, referred to as “drug igloos” in the winter.
Small convenience stores are also the new model to sell illicit weed, sources said.
There are now 593 licensed cannabis shops statewide, after the legislature legalized sales of marijuana for adult use in 2021.