The one tax you pay at the register
Retailers owe retail taxes totaling 13% on the retail sale of adult-use cannabis products. That 13% is made up of:
- 9% state cannabis excise tax
- 4% local cannabis excise tax, which stays with the city, town, village, or county where the sale happens
Adult-use cannabis products are exempt from sales tax, so the 13% replaces the ordinary sales tax you would pay on other goods. It is not charged on top of it. Source: New York State Department of Taxation and Finance.
The 9% distributor tax is not a checkout charge
There is also a 9% distributor tax, paid by a distributor on the sale or transfer of cannabis products to a retailer. That is a wholesale-stage tax between businesses. It is not a line item on your receipt and it does not stack onto the 13% you pay at the register.
You may still see the wholesale tax reflected indirectly in shelf pricing, the same way any supplier cost is. That is different from being charged it.
What was repealed
Before June 1, 2024, New York taxed cannabis by THC content at a per-milligram rate that varied by product form. That potency tax was replaced by the 9% distributor tax described above. Any guide, calculator, or receipt explainer still showing per-milligram THC excise math is describing law that no longer applies. New York publishes the pre-June-2024 rates separately as historical rates.
Worked examples at the current rate
The math is now straightforward: listed price times 1.13.
1/8 oz flower, list price $40
- Cannabis retail tax: $40 x 0.13 = $5.20
- Total: $45.20
1g vape cart, list price $50
- Cannabis retail tax: $50 x 0.13 = $6.50
- Total: $56.50
100mg edible package, list price $25
- Cannabis retail tax: $25 x 0.13 = $3.25
- Total: $28.25
Potency no longer changes the tax. A high-THC eighth and a low-THC eighth at the same shelf price carry the same tax.
These examples use the statutory 13% rate on the listed price, current as of the June 1, 2024 rate change. They assume a cannabis-only basket. A basket that also contains non-cannabis accessories is taxed differently on those items, because accessories are not adult-use cannabis products and are not covered by the cannabis exemption. Ask at the counter, or check your receipt, for how a mixed basket breaks out.
Where the tax revenue goes
Under the MRTA, New York cannabis tax revenue is allocated:
- 40% to the Community Reinvestment Fund, for communities disproportionately impacted by cannabis prohibition enforcement
- 40% to the New York State Lottery Fund, which supports public education
- 20% to the Drug Treatment and Public Education Fund
Comparing cost between products
Now that potency is not taxed, comparing value is simpler than it was: the tax is the same proportion on every cannabis item, so a comparison of shelf prices is already a comparison of final prices.
To compare value between products, use the Total THC figure on the product label or its certificate of analysis and work out cost per milligram. Our COA guide explains where to find that number and what it does and does not tell you.
Why licensed prices can look higher than the unlicensed market
Unlicensed sellers do not collect the cannabis tax and do not carry the costs of the licensed supply chain. The trade-off is what you give up:
- Unlicensed product is not tested at a New York licensed laboratory
- It carries no certificate of analysis for potency or contaminants
- The seller is not accountable to the Office of Cannabis Management
- None of the revenue reaches the Community Reinvestment Fund
You can check whether any New York store is licensed with the official OCM dispensary verification tool.
Visit Sage Seeds
Sage Seeds · 248-15 Union Turnpike, Bellerose, NY 11426 · (347) 426-9394 · License OCM-RETL-24-000004 · Hours · See Visit Us · Contact
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For use only by adults 21 and older. Cannabis affects each person differently. Do not drive or operate machinery after using. This page is general information, not tax advice. Rates can change; verify current rates with the New York State Department of Taxation and Finance or a tax professional.