It might even be a bit more than this.
The legalization of marijuana in New York City has brought in additional revenue, yet officials indicate that tax revenues aren’t growing at the same pace as the cannabis market itself.
According to Mayor Zoran Mamdani’s preliminary budget released Tuesday, marijuana tax revenue is anticipated to hit $24 million for the fiscal year 2026, marking a 33% jump from the previous year.
For the 2027 fiscal year starting in July, tax revenue from the legal sale of cannabis for adult use is expected to reach $33 million, a significant increase of 37.5%, as per the budget document.
Year-to-date collections from the city’s cannabis tax have surged by 50%, as indicated in the revenue plan.
This surge could be attributed to the opening of new dispensaries and the expansion of existing ones, effectively increasing access to cannabis products, the budget plan notes.
Nevertheless, industry representatives argue that stricter enforcement against illegal marijuana shops and dealers could boost tax revenues further, as they compete with licensed stores.
Sales per store in New York City have reportedly decreased each quarter since late 2025, according to the Mayor’s Office of the Budget. The office notes that expanding suppliers and falling cannabis prices have limited revenue growth, despite rising store numbers.
Since July 2025, the city has seen an average of eight new cannabis dispensaries opening each month, totaling 211 by the end of the year. This is more than double the 105 stores recorded at the end of December 2024.
Looking ahead, adult-use cannabis tax revenues are predicted to rise by 9% from 2028 to 2030 as the market continues to mature.
The city has implemented a 4% use tax on cannabis products, which is in addition to the 9% retail sales tax charged at the state level.
Interestingly, recent reports reveal that drug dealers in the Bronx are openly selling marijuana from sidewalk tents, humorously dubbed “drug igloos,” even during the winter. Moreover, small convenience stores are emerging as hubs for illegal cannabis sales.
Since Congress legalized adult-use cannabis sales in 2021, the state now has 593 licensed cannabis stores operational.
