New York Marijuana Market Could be Worth 3.1 Billion

In May, New York City Comptroller Scott M. Stringer released a report arguing for legalization of adult-use marijuana in New York. As may be expected of someone with financial expertise, his argument focuses on economics.

According to Stringer’s estimates, “the legal, adult-use marijuana market” could be worth “some $3.1 billion per year in New York State, about $1.1 billion of that in New York City. In turn, the Comptroller’s Office estimates that this market could conservatively yield annual tax revenues of as much as $1.3 billion total at the State and City levels.”

But Stringer does not limit himself to these numbers. In addition, he writes: “Beyond the mere dollars that legalization could yield, decriminalization has clear human and societal benefits.”  He points out that “misdemeanor marijuana arrests continue to fall most heavily on young Black and Latino New Yorkers, despite a higher reported usage rate among White youth. Erasing the harmful repercussions, including the stigma of a criminal record, would open doors that have been closed to too many for too long.” This argument echoes that of Cynthia Nixon, who is running for Governor of New York.

In a video on her campaign site, Nixon points out that “eighty percent of the New Yorkers who are arrested for marijuana are black or Latino, despite the fact that whites and people of color use marijuana at roughly the same rates. The consequences follow people for the rest of their lives, making it harder to get jobs or housing, and for noncitizens, putting them in the crosshairs for deportation. In addition to ending a key front in the racist war on drugs, regulating and taxing marijuana would generate hundreds of millions of dollars of tax revenue for our people and create important agricultural opportunities for our state.”

Stringer and Nixon are not the only people involved in New York’s politics who are calling for a change to marijuana law. U.S. Senator and Minority Leader Chuck Schumer has announced that he plans to support a bill to decriminalize marijuana at the federal level.

Wide-reaching benefits

Senator Schumer said: “The time has come to decriminalize marijuana. This legislation would let the states be the laboratories that they should be, ensure that woman and minority-owned business have a fair shot in the marijuana industry, invests in critical research on THC, and ensures that advertisers can’t target children—it’s a balanced approach.”

Stringer’s report also cites the successes of states that have legalized. A table compares the tax rates of some states in which marijuana is legal: Colorado has a 15 percent excise/producer tax and a 10 percent sales/retail tax, while California has a 15 percent excise/producer tax and a 7.25 percent sales tax. Alaska has a simpler tax scheme of $50 per ounce at the producer level. Despite these taxes, there is little evidence that consumers prefer the black market. Stringer’s report says:  “Since 2014, annual sales of marijuana in Washington grew rapidly, from $259 million in 2015 to $1.3 billion in 2017. Annual tax revenues grew to $319 million in 2017. Over this period, survey data show the overall rate of marijuana use in Washington changed very little, suggesting that rising sales and revenues are driven by the transition from illicit to legal markets, rather than growth in the market overall.”

Recently in Albany, Montel Williams shared with legislators how cannabis has helped him cope with the pain of multiple sclerosis. When his opioid use grew worrisome, he accepted a doctor’s advice and tried marijuana. Medical marijuana is legal in New York. While marijuana does not cure his symptoms, it helps him manage his pain. In the state capital, Senate Bill S3040A, which would “regulate, control, and tax marihuana in a manner similar to alcohol” and “generate millions of dollars in new revenue,” is currently under review in the state Senate Finance Committee. As support for legalization grows, the bill may yet be approved and sent to the governor’s desk for a signature or veto. Governor Andrew Cuomo, who is likely to win reelection and who has not been a supporter of legalization, has recently said that he thinks legalization in his state seems inevitable.

If a city’s financial analyst, a gubernatorial candidate, and a senator all agree that the law should be changed, it is hard not to argue that the legal status of marijuana in New York is headed for change.

What do you think? When will New York legalize adult-use marijuana? Leave a comment below.

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