New York’s Pot Legalization Adds Urgency to US Reform Calls
New York’s legalization of recreational marijuana could generate $5 billion in sales for the first year and raises pressure on other states to follow the 16 that have now approved the plant for everyday use, the head of…
New York’s legalization of recreational marijuana could generate $5 billion in sales for the first year and raises pressure on other states to follow the 16 that have now approved the plant for everyday use, the head of one of the country’s biggest producers said on Wednesday.
New York Governor Andrew Cuomo on Wednesday signed a bill paving the way for recreational sales of marijuana to begin in the state next year, pushing an ETF tracking U.S. pot producers’ stocks up more than 6% and on track for its best day since the U.S. presidential election.
Ben Kovler, chief executive officer of Green Thumb Industries Inc, the second largest U.S. pot producer by market value, said his company will allocate “significant dollars” to the New York market – set to be the second largest legal market after California.
New York could be worth more than $5 billion in just its first year of sales, without including “cannabis tourism” from other states, Kovler said in an interview.
“New York is New York, (there) couldn’t be a bigger deal,” Kovler said.
Global X Research analyst Pedro Palandrani estimated that based on Cuomo’s forecast of $350 million in cannabis tax revenue, the state’s first year sales should top $2.5 billion to $2.7 billion.
In comparison, Colorado crossed $2 billion in total cannabis sales last year after more than five years as a recreational market, according to the state’s revenue department’s figures.
While the COVID-19 pandemic and resulting lockdowns cut into tax dollars that states earned from sectors like hotels and airlines, the idea of legal cannabis sales offered some hope to plug up battered fiscal budgets across the country.
“What cannabis brings and is now proven is tax revenue of a material nature,” Kovler said, citing the example of Illinois, which in February collected more tax revenue from cannabis than alcohol.