NY Cannabis Tax Explained: What You Actually Pay
NY Cannabis Tax Explained: What You Actually Pay
At a licensed New York dispensary, adult-use cannabis is subject to a 13% retail cannabis tax: 9% state and 4% local. Adult-use cannabis itself is exempt from ordinary sales tax. Separately, distributors pay a 9% tax when selling or transferring cannabis products to retailers, an upstream cost that is not separately charged to the consumer at checkout.
The Rates
| Tax | Rate | Who legally pays | When |
|---|---|---|---|
| State retail excise | 9% | Retailer (passed through to you at the register) | Retail sale |
| Local retail excise | 4% | Retailer (passed through to you at the register) | Retail sale |
| Distributor (wholesale) tax | 9% | Distributor | Sale/transfer to a dispensary |
| Standard sales tax | 0% | Exempt | Adult-use cannabis is not subject to it |
| Medical cannabis excise | 3.15% | Registered organization | On gross receipts |
One footnote on the exemption: it covers the cannabis products themselves. Accessories such as pipes, papers, and lighters still carry normal sales tax.
A $100 shelf-price purchase rings up at $113: no more, no less. The 9% distributor tax is an upstream cost that can be reflected economically in shelf prices, but it is never a line item on your receipt. To run the numbers on any purchase, use our cannabis tax calculator.What Changed in 2024: Goodbye Potency Tax
New York originally taxed cannabis at wholesale by THC content (the "potency tax": different rates per milligram of THC for flower, concentrates, and edibles). It was complicated, expensive to comply with, and pushed edible prices up disproportionately. The state repealed it effective June 1, 2024 and replaced it with the flat 9% distributor tax. Retail excise rates did not change.
If you see references to THC-based taxes in New York, they are describing the pre-June-2024 system.
Where the 4% Local Share Goes
The local excise is split: 1% to the county, 3% to the city, town, or village where the dispensary sits. That 3% is one reason municipalities that opted in to retail sales are collecting meaningful new revenue, and towns that opted out collect nothing. You can see how many dispensaries operate in each city on our by-city data and city pages.Where the State's Share Goes
After administrative costs, New York directs cannabis revenue: 40% to education, 40% to community reinvestment grants in areas most affected by prior enforcement, and 20% to drug treatment and public education programs.
How NY Compares
New York's 13% at the register is moderate: lower than California's effective combined load or Washington's 37% excise, higher than New Jersey's headline rate (NJ taxes cannabis with its standard sales tax plus a social equity excise fee that has ratcheted upward). Neighboring Connecticut taxes by THC content, the model New York abandoned.
The bigger price factor in New York is not tax but market maturity: legal prices have fallen steadily as more of the state's licensed dispensaries and brands have come online. Deals move faster than tax policy: see current deals at licensed shops.FAQ
Why does my receipt show no sales tax?
Adult-use cannabis is exempt from New York State and local sales tax. The 13% excise replaces it, and dispensaries are required to sell only tax-included or itemized-excise pricing, so the register math is exactly shelf price plus 13%.
Do delivery orders get taxed differently?
No. The same 13% retail excise applies regardless of whether you buy in-store or by delivery from a licensed retailer.
Is medical cannabis taxed less?
Yes, substantially. Medical cannabis carries a 3.15% excise on the registered organization's gross receipts (cut from 7% effective June 1, 2024), and patients do not pay the 13% adult-use retail excise.
Do unlicensed shops charge these taxes?
No, which is part of how they undercut licensed stores, and none of that money reaches schools, communities, or treatment programs. Every shop on FindWeedNY holds a state license: verify any license with our license lookup.Related Reading
- Cannabis tax calculator
- Open data: dispensaries and license datasets
- License lookup tool
- Find licensed dispensaries near you
Sources
- NYS Department of Taxation and Finance, adult-use cannabis products tax: tax.ny.gov/bus/auc
- NYS Office of Cannabis Management, taxation and revenue: cannabis.ny.gov
Updated September 7, 2026