New York Retailers sold 3.5 million marijuana products in the first year of legalization, a state report says

New York’s marijuana regulators released a review of the legal cannabis system in the state on Friday. The report highlights major milestones, and offers a snapshot of market conditions almost exactly one year after when the first adult-use sales began.

The Office of Cannabis Management in New York State (OCM) reported that consumers purchased over 3.5 million cannabis-related products last year. After December sales figures are added up, the total for the entire year is expected to be more than $150 million.

This activity generated more than $22 million in state revenues, including $16.3 million in fiscal year 2023. By the middle of fiscal 2024, this figure was up to $16.6 million.

The totals for the recreational cannabis market are low, despite the nine-figure number. This is especially true in states with a large population.

The New York legalization of marijuana was slowed down in 2023 by a court order that prohibited regulators from issuing hundreds of new licenses. This created a market bottleneck from August to early December when the state Supreme Court lifted its injunction. The 2023 sales figures would likely have been much higher if the adult-use market launch had gone ahead without interruption.

The report states that only 40 adult-use retailers are licensed in New York State.

As a result of the slow retail rollout by regulators, a temporary Cannabis Growers’ Showcase Program was launched, which allowed licensed producers and processors to directly sell to consumers. The showcase program accounted for approximately 3 percent of the total cannabis sales by 2023.

Chris Alexander, OCM executive director, stated in a Friday statement that “we have a great deal of work ahead of us and much to be proud about.” My team at OCM, now that the core market infrastructure is in place is ready to scale up and help this industry flourish across New York State.

The majority of the 3.5 million products were non-flower processed products. Flower and vape carts topped the list, accounting for 31 percent and 27 % of total sales respectively. Edibles (17 %), prerolls (15 %), concentrate (7 %), tablets and lozenges (1%), and topicals (1 %) followed.

Housing Works Cannabis Co. said in a Friday press release that the company’s first licensed retailer for adult-use marijuana, had sold about $24,000,000 in its first year. The company reported that the Friday before Memorial Day was its strongest sales day, with over $100,000 worth of products sold. The company said that the week before Labor Day in September was their busiest sales week, with more than half-a-million dollars in revenue.

Learn how #NYcannabis creates a market where community and opportunity are valued by every New Yorker. Do not just believe us – let the numbers do the talking. pic.twitter.com/tuuoOpg5sV

NYS Office of Cannabis Management December 27th, 2023 HTML0

In a press release, Sasha Nutgent said, “Since we opened our doors a year ago, our operation has been in a sort of pop-up phase. But that hasn’t prevented us from pushing our mission forward.”

released a statement that said the company was “solidifying itself as the social equity-model for America’s Cannabis Industry” by its community advocacy, including for education, harm-reduction, and justice in health and housing. Housing Works also said it would be focusing on advancing advocacy and essential services for those who have been unjustly affected by the War on Drugs.

OCM also released on Friday a list with the top 50 strains that consumers will purchase in 2023. Gas Face, Blueberry Muffin, and Sour Diesel were at the top.

The average price for flower products was $42 for an eighth of an inch, $110 per half-ounce, and $197 for one full ounce. The average edible weighing between 10 mg and 25 mg cost around $21 while 100 mg edibles cost about $28.

We have operators of high quality across the supply chains producing diverse products that draw consumers from the unlicensed and unregulated market to New York’s licensed, legal stores. John Kagia is the director of OCM’s policy. “Not only does there exist an incredible genetic variety in the market with over 500 strains that are available, but also a great deal of diversity on a name-to-name basis,” he said. “Now that the office is poised for hundreds of adult-use retail licenses to be issued, there’s a tremendous amount of excitement, as consumers throughout the state are ready to gain access this exciting market.”

In 2023, the regulators received 6,934 license applications, which included 538 for processors; 372 for cultivators; 351 for distributors; 1,349 microbusinesses; and 4,324 retail. Over half (3,826 applications or approximately 55%) were from applicants who are socially responsible.

In terms of equity, OCM stated that it released a map in this year that identified communities historically disproportionately affected by cannabis enforcement. The office found that approximately 25 percent of the population of the state experienced around 75 percent arrests over the last 40 years.

The office has said that it is supporting equity in the emerging cannabis sector by providing training and mentoring to “upwards of 300 conditional retailers and up to 241 legacy cultivator and processors, traditional farmers and food and drink manufacturers”. Its Social and Economic Training Team trained dozens providers who assisted more than 700 equity seekers. To support this work, the office will provide grants up to $50,000 to these providers.

In 2023, the majority of licenses were related to hemp. These approvals include: 279 conditional adult use licenses; 40 processor licenses; 463 retail licenses; and 5,404 cannabinoid-hemp licenses and permits. The office also approved the participation of 10 registered organisations and six registered groups in adult use.

OCM reported that in 2023, over 121.900 patients had registered for the medical marijuana program of the state. The program was changed this year to automatically register patients in the state’s program when they receive a marijuana prescription from a qualified healthcare professional. This change is designed to increase patient access to medication.

OCM reported in the report that the state has seized 11,600 pounds worth $56 million of illicit marijuana products. The state also conducted 369 “enforcement checks” on illicit operations. New legislation, signed by the governor in May, aided these efforts. Kathy Hochul (D), who gave OCM and the Department of Taxation and Finance of New York State additional enforcement powers.

The state Department of Labor also published in this month dozens of job descriptions for various positions within the emerging cannabis sector. Officials said that the purpose of the sample job descriptions was to streamline the hiring process and to allow potential employees to evaluate their qualifications.

The slow rollout of recreational cannabis has led to the proliferation of illicit cannabis operators across the state. This prompted the governor’s announcement that officials will “intensify” enforcement.

The New York Senate Cannabis Subcommittee was formed in April by Sen. Jeremy Cooney, (D) and has been chaired since then. In October, they heard from witnesses, and discussed possible legislative solutions for the ongoing problems with the implementation of cannabis legalization in the state.

Hochul signed a separate bill in November to provide tax relief to New York City marijuana businesses that are currently blocked from making federal deductions under an Internal Revenue Service (IRS) code known as 280E. She also signed another bill to give tax relief to New York City cannabis businesses who are currently barred from taking federal deductions due to an Internal Revenue Service code called 280E.

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New York City’s tax laws were not affected by the change in Hochul’s budget bill. This new measure aims to close that policy gap.

Hochul vetoed a bill that would have allowed Hemp seeds to be added to animal feeds for horses, pets and camelids like llamas or alpacas.

In September, about 66 state legislators–a third of all the state’s lawmakers–also sent Hochul an email urging her to sign a law that would permit licensed marijuana producers to sell their products to tribal retailers . This plan will allow cannabis farmers to release surplus product that they currently have but are unable to sell.

Hochul , however, vetoed the bill earlier this month.

State regulators also work to dispel what they call the false narrative that marijuana is often contaminated with fentanyl — a “misconception,” which is “widespread,” despite lack of evidence. OCM released a factsheet recently on the subject, stating that while fentanyl can be found in heroin and MDMA, the anecdotal evidence of marijuana being laced with fentanyl is unfounded.

The Office of Addiction Services and Supports of the state also has recently revised its guidance on THC testing in people undergoing treatment for substance abuse disorder . It advises marijuana screening in cases when “the patient’s treatment goal is to reduce or stop using cannabis.”

The Black Friday after Thanksgiving was a time when regulators encouraged consumers to shop at licensed cannabis retailers and take advantage of the great deals.