New York medical cannabis operators and patients are rallying behind a proposal in the state Legislature to repeal the state’s 3.5% excise tax on MMJ.
State Sen. Jeremy Cooney, who introduced legislation last year to eliminate the tax on medical cannabis, said during a rally at the state Capitol on Wednesday that a medical cannabis tax imposes an unfair burden on patients, who cannot seek healthcare reimbursements.
Cannabis “should not be treated any different than any other medication that a prescriber would use to treat their patients,” Cooney said, according to a press release.
The tax is assessed on manufacturers, distributors or sellers, who pass it on to consumers.
Is New York’s medical cannabis program in crisis?
New York’s vertically integrated medical cannabis licenses, referred to as “registered organizations,” are limited to 10 statewide.
Most are held by cannabis multistate operators – only some of whom have fully paid a multimillion-dollar fee to convert to dual use.
Through November 2025, the most recent data available, New York medical cannabis retailers reported $95.5 million in sales last year, down from $140 million in 2024.
Overall cannabis sales in the state reached $1.7 billion last year. They are on pace to hit $2.6 billion in 2026, according to the state Office of Cannabis Management.
According to OCM, as of Nov. 30, New York had:
- 31 open medical dispensaries and 11 co-located medical and adult-use dispensaries
- 81,500 registered patients, out of a population of nearly 20 million
- 4,647 providers registered to certify patients for medical cannabis
Should medical cannabis be taxed?
Last year, Gov. Kathy Hochul signed into law a bill that promised to boost the state’s medical marijuana operators by allowing out-of-state patients to use New York dispensaries while also adjusting possession limits.
However, according to a statement from the New York Medical Cannabis Industry Association, which represents the registered organizations, “the medical cannabis program is still in crisis.”
Cooney and patient advocates said Wednesday that the tax drives patients to seek cheaper alternative, including illegal cannabis and cheaper, less specialized adult-use stores.
Eliminating the tax could make medical marijuana more accessible, particularly for veterans and patients managing chronic pain or chemotherapy side effects, advocates say.
Many other states are revisiting cannabis tax rates amid pressing questions about price compression and the illicit market.
