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Legal New York Dispensaries Near Closed Illegal Shops See A 27% Rise In Sales

On May 21st, 2024, New York regulators launched an enforcement task force with the goal of shutting down unregulated cannabis shops that have proliferated the state. The task force’s creation came after lawmakers in New York increased local enforcement powers. In total, over 500 illegal stores have been shuttered, 400 of which were located in New York City.

Below is a press conference held yesterday by New York Governor Kathy Hochul describing efforts in New York State, including data that sales at licensed dispensaries near shuttered illegal cannabis stores have risen 27% since the unregulated shop crackdown began:

On March 31, 2021, New York legalized cannabis for adult-use. However, it wasn’t until December 2022 that the first legal adult-use sales started to occur. The first legal sales happened at a dispensary in Manhattan’s East Village at a retailer named Housing Works Cannabis Company.

New York State’s legal cannabis industry has had to compete with an unregulated industry that has proven hard for policymakers and regulators to get a handle on. As of March of this year, the New York Times estimates that there are roughly 2,000 unregulated cannabis shops in New York.

The number of regulated retailers in New York State is a fraction of the number of unregulated retailers, however, the population of legal outlets is increasing, along with other types of industry licenses.

New York Governor Kathy Hochul recently announced that over 400 licenses have been issued so far in 2024.

“Governor Kathy Hochul today announced that the New York State Cannabis Control Board has issued 403 adult-use cannabis licenses in 2024 to bolster the legal market in New York. The Cannabis Control Board recently issued 101 licenses, building on significant progress to strengthen our state’s cannabis regulatory framework with the passing of several resolutions aimed at issuing new licenses, streamlining the adult-use cannabis licensing process, and enhancing critical enforcement measures.” Governor Hochul’s office stated in a press release.

“With the Cannabis Control Board’s issuance of 101 adult-use cannabis licenses, New York’s legal cannabis industry continues to make significant progress with over 400 licenses issued in 2024,” Governor Hochul said. “Strengthening New York’s equitable cannabis industry and ensuring the hard-working small business owners operating in the legal market have the licenses to open are the best way to protect the integrity of sales in New York.”

The United States adult-use cannabis industry has generated over $20 billion in total tax revenue since the first legal recreational cannabis purchase was made in Colorado on January 1st, 2014 according to a report by the Marijuana Policy Project.

“Through the first quarter of 2024, states have reported a combined total of more than $20 billion in tax revenue from legal, adult-use cannabis sales. In 2023 alone, legalization states generated more than $4 billion in cannabis tax revenue from adult-use sales, which is the most revenue generated by cannabis sales in a single year.” the Marijuana Policy Project stated in a press release.

79% of people living in the United States lived in a county with at least one regulated cannabis dispensary according to an analysis by the Pew Research Center. The Pew Research Center also found the following:

  • 74% of people in the U.S. live in a state where recreational or medical cannabis is legal
  • There are nearly 15,000 cannabis dispensaries in the U.S.
  • California has the most overall dispensaries (3,659)
  • Oklahoma has the most dispensaries per capita (36 dispensaries for every 100,000 residents)

Total legal cannabis sales in the United States are expected to reach $31.4 billion in 2024 according to a recent analysis by Whitney Economics. Additionally, leading cannabis jobs platform Vangst, in conjunction with Whitney Economics, estimates that the legal cannabis industry now supports 440,445 full time-equivalent cannabis jobs in the United States.

Whitney Economics also projects the following legal cannabis sales figures in the United States for the coming years:

  • 2024: $31.4 billion (9.1% growth from 2023)
  • 2025: $35.2 billion (12.1% growth from 2024)
  • 2030: $67.2 billion
  • 2035: $87.0 billion

The emerging legal cannabis industry in the United States is projected to add roughly $112 billion to the nation’s economy in 2024 according to an analysis by MJBiz Daily. The projection is part of the company’s 2024 MJBiz Factbook.

“The total U.S. economic impact generated by regulated marijuana sales could top $112.4 billion in 2024, about 12% more than last year,” MJBiz stated in its initial reporting.