ALBANY — A new report is foreshadowing potential revenues the state could see if lawmakers legalized recreational marijuana in New York.
The Citizens Budget Commission’s report however says state leaders should be cautious about relying on those potential revenues to help close budget gaps.
“What we’ve seen is that that takes generally over a year to get from legalization to a functioning commercial market. Those times have been trimmed quite a bit, frankly, as more states have implemented and states can draw on what has happened around the country. So about one year is reasonable there,” said Patrick Orecki, the report’s author.
Orecki says once the commercial market is in operation, it takes time for people to start using dispensaries to buy products.
“That generally takes about two to three years consistently for customers to move to those marketplaces and for those marketplaces to yield substantial tax revenues for the state,” furthered Orecki.
He explained that in the past the Governor’s Administration has forecasted about $300 million in revenue from the legalization of recreational marijuana annually once established, but, it can be reliant on different factors like tax framework structure.
“California is generating the most revenue of any state because of its size, especially, but it has experienced a lot slower maturation of that revenue source than some other states did,” explained Orecki. “They’ve had a fairly sticky illicit market where people are still just using the same channels that they use to purchase marijuana previously. So, every state’s experience is absolutely different in it.”
Governor Andrew Cuomo has voiced support for legalizing recreational marijuana use.
Earlier this month, he called it the “right policy” and said, “the state is going to be desperate for funding.”
According to the Citizens Budget Commission, California brought in about $764,000,000 from recreational marijuana revenues from July 2019 to June 2020.