THC Potency Tax In New York Could End If State Senator Cooney's New Proposal Is Approved

New York State Senator Jeremy Cooney introduced a bill Wednesday that could change the current marijuana tax structure. Under the proposed measure (S4831), marijuana tax would be taxed at a flat 20% rate, versus the current tax, which is based on THC potency and flower weight, reported the Green Market Report.

“No other state in the country has implemented the potency (THC) tax on adult-use cannabis that New York State has. This tax is excessively complex, costly to cannabis enterprises, and will lead to lab shopping for the best results,” reads the justification memo. It also highlights that the illegal cannabis market in the state is still booming, despite the legalization, and that the “THC tax and total tax burden” could exacerbate the problem.

In addition to removing the THC potency issue, the legislation also proposes a higher excise tax on cannabis – 16% from the previous 9% and adds a 4% sales tax.

Marijuana industry lobbyist Kaelan Castetter called the bill’s introduction good news. “I’ve been working on this issue for about three years now. … This is the main focus I have lobbying in Albany this year, is to do tax reform,” Castetter said on Twitter. "So we’ve been meeting with members and the governor’s office and the (Office of Cannabis Management) for a while now about this.”

BIG NEWS: @SenatorCooney just introduced a bill to remove the THC potency tax and replace it with a simple 20% tax at retail.
This reform is critical for the market to thrive and I hope to see S4831 get done in the budget. pic.twitter.com/2RotuKpBhH

— Kaelan Castetter (@KaelanCastetter) February 15, 2023

Castetter said that the bill will likely face opposition in Albany. “I think we’re going to see a lot of co-sponsors come in on the Senate side,” Castetter said. “There’s going to be a lot of negotiation. So in order for this tax reform to be successful, it needs to be included in the budget, and the real risk is it just gets buried and doesn’t become a priority.”

Recent Cannabis Developments In The Empire State

The new bill comes on the heels of Cooney’s reintroduction of a bill that aims to put medical marijuana under insurance coverage.

The legislation, S8837 was first introduced in the previous legislative session by State Sen. Diane Savino (D). In June, NY's state Senate greenlighted a bill that would require public health insurance programs to cover medical marijuana expenses. The legislation would also allow private insurers to do the same.

“Some patients begin treatment only to stop due to inability to pay, while others turn to the black market,” Savino said at the time.

After passing the Senate, the bill was sent to the Ways & Means Committee but did not make it out before the end of the 2021-2022 legislative session. Now, the co-sponsor of the legislation, Sen. Cooney is taking another shot.

“Access to medical marijuana should not be limited to those who can pay out of pocket. This bill adds medical marijuana to four publicly funded health programs - Medicaid, Child Health Plus, workers compensation, and EPIC - and the heavily publicly funded Essential Plan,” the justification memo reads.

Meanwhile, illegal pot shops continue to be targeted. Several days ago, one unlicensed marijuana store in New York City, just across the City Hall, was fined a whopping $50,000. The news came about a week after Mayor Eric Adams and Manhattan District Attorney Alvin L. Bragg, Jr. announced a partnership with local law enforcement and elected officials to combat the proliferation of illegal and unlicensed cannabis shops throughout Manhattan.

Photo: Benzinga edit with images from Pixabay