On March 31, 2021, New York State Governor Andrew Cuomo signed into legislation the Marijuana Regulation and Taxation Act, also known as the “cannabis law”, legalizing adult-use cannabis in New York State. This law decriminalizes recreational marijuana in addition to imposing taxes on the distribution and sale. It’s estimated that this will generate up to $350 million of revenue annually.
Cannabis products sold by a distributor to a retail seller are taxed based on potency, as follows:

• Cannabis flower will be taxed at 5/10ths of one cent per milligram of total THC;
• Concentrated cannabis will be taxed at 8/10ths of one cent per milligram of total THC; and
• Edible products will be taxed at 3 cents per milligram of total THC.

Adult-use Cannabis products sold by a retail seller will be subject to a 9% sales tax. There may also be an additional 4% local tax levied on the sale, depending on where the seller is located.
Every distributor and retail seller of adult-use cannabis will be required to file a certificate of registration with the Commissioner of Taxation and pay a nonrefundable fee of $600.

After regulatory and administrative costs, 40% of cannabis revenue will be allocated to community grant reinvestment; 20% to schools; and 40% to drug treatment facilities and public education.

Contact EFPR Group for assistance with services in the Cannabis industry, or any other state and local tax issues. More information may be found on our website, here: https://efprgroup.com/client-sectors/cannabis-hemp/ 

The materials contained herein are intended for educational and informational purposes only and do not constitute tax or legal advice. Readers are responsible for obtaining such advice from their tax and legal counsel.