Now, both chambers in the New York State legislative have passed legislation that extends the deadline to some marijuana businesses for filing electronic tax returns. They are sending this proposal to Gov. Kathy Hochul (D).
The proposal, if signed into law by the President and Congress, would allow cannabis producers and distributors an extra 30 days after the close of every quarterly period to file their taxes. Currently, companies are given a window of 20 days to submit the paperwork. This legislation would extend that to 50.
In a Thursday press release, lawmakers who backed the bill said that the extra time would allow for accurate tax returns and more flexibility in the marketplace as it continues to develop. The bill is designed to provide for a realistic tax collection timeline, while also promoting compliance with filing requirements and maintaining revenue levels and tax rates.
Assemblywoman Donna Lupardo is the Assembly side sponsor of this bill and the chairperson of their Agriculture Committee. She said while New Yorkers are more aware of the retail aspect of the market, distributors and farmers still make up a significant part of it.
Lupardo stated that “we hope our efforts to provide tax flexibilities for NY’s marijuana manufacturers and distributors succeed.” They are an important, if not often seen, part of the legal cannabis supply in NY, and without them, there would be no retail industry.
Senate sponsor Sen. Jeremy Cooney’s (D), the chairman of the Cannabis Subcommittee for the Senate chamber, has said, “Cannabis Farmers deserve the State’s Help, and this Bill would Provide that Much-Needed Relief.”
In a press release, he stated that he was “proud” to have worked with Assemblymember Lupardo as well as our colleagues to accomplish this task before the end session. This would provide financial flexibility for farmers in New York and demonstrate our dedication to building an thriving, legal cannabis industry.
An attached cosponsorship memorandum explains what:
The cannabis excise is currently paid by cultivators and producers of cannabis to the NYS Department of Taxation and Finance on a quarterly basis. Due to this excise schedule, product processors and producers often have unpaid taxes prior to selling the products. This law changes the schedule for tax payments by giving the option to pay on or before fifty days following each quarter’s tax period.
Slow openings of dispensaries due to a variety of factors has caused a backlog in products at processors that have not yet been sent out or sold to retail outlets, but the tax remains owed. The processor is also under pressure because some retailers are late in paying the tax. The cannabis law contains a provision for prompt payment, which isn’t being implemented due to a number of factors. The tax can be collected at a much more flexible pace, which will give the market flexibility as it grows and help struggling processors and producers.”
Mack Hueber is the president of Empire Cannabis Manufacturers Alliance. He called this proposal (A5496/S3261), “a commonsense legislative approach to extend the cannabis excise-tax deadlines, so that manufacturers, distributors, and retailers have enough time to collect, accurately report, and remit hundreds of millions in tax revenues to New York State.”
He said that in a release that “we applaud Senator Jeremy Cooney, as well as Assemblymember Donna Lupardo, for recognizing the fact that cannabis manufacturing is one of our state’s most rapidly growing employment sectors. This sector generates significant revenue which supports grants to communities, educational programs, addiction services and law enforcement. They have come up with a solution which takes both the regulatory and real-world realities into consideration. This will not reduce or change tax revenue, but give an extra 30 days for filing at each end of quarter. We are looking forward to the Governor Hochul quickly signing of A5496A/S8091.”
The bill’s sponsors noted that Hochul had vetoed a previous cannabis tax reform proposal in late 2018, claiming that it “would pose significant operational challenges to the State and confuse taxpayers.” They said they have worked hard to address these concerns in the present version.
The earlier, vetoed measure would have allowed marijuana growers and processors to pay excise taxes on an annual basis rather than quarterly—a change that would have extended the same treatment to cannabis as the state already offers the alcohol industry.
Nicholas Guarino wrote for MEDCAN24 in a recent op/ed that changing to an annual filing tax system would allow businesses “to better manage their cash flows, invest in expansion initiatives, and adapt more efficiently to market demand as more stores are opened and potential customers gain access to a variety of products”.
New York officials, on the other hand, announced this past month that they had awarded the first grants of a $5-million program to cover startup expenses for retail marijuana businesses run by people who are involved with justice.
After a three-month wait, on Wednesday the Office of Cannabis Management, Empire State Development and the Office of Cannabis Management announced that the Office of Cannabis Management had awarded 52 dispensaries with up to $30,000 in funding for their startup and operating costs. These include rent, renovations or inventory systems, as well as operational expenses such a security, tracking, and monitoring.
To qualify for the program, applicants need to have been “justice involved”—in other words, impacted by a marijuana-related conviction—and have some experience running a profitable business.
Meanwhile, OCM recently launched a new online map that’s meant to help adults locate licensed marijuana retailers—one of their latest efforts to encourage consumers to buy their cannabis from the regulated market.
The governor, along with regulators, have made it a priority to educate the public on the importance of purchasing marijuana products only from authorized dispensaries. This is a matter of health and safety.
New York’s campaign included digital advertisements and educational resources. These include a guide to safe consumption, graphics, videos, featuring cannabis entrepreneurs, and messages about participating in regulated markets.
OCM says that continued enforcement is essential to build up a regulated health market. It cites what they describe as successful enforcement in 2024. Operation Padlock is an enforcement program that was implemented by New York City officials last spring. Its goal: to close illegal storefronts. A survey conducted by OCM found that within months licensed shops which were already open when the operation started saw their sales increase by 105%.
The state is also proposing new regulations for the “Cannabis Showcase” program which permits licensed businesses to offer cannabis to customers at farmers markets or pop-up events.
As originally authorized, the showcase events were largely in response to the slow rollout of New York’s adult-use marijuana program, which faced multiple delays in implementation amid litigation and other matters.
But the state’s industry has gradually expanded, with officials in January touting $1 billion in total sales since the market launched.
Separately Hochul signed state budget legislation that did not include a controversial earlier provision that would have allowed police to use the smell of marijuana as probable cause that a driver is impaired and then force them to take a drug test.
Amendments made in the legislature removed the provision, which a coalition of 60 reform groups had argued in a letter to Hochul and top lawmakers would “repeat some of the worst harms of the War on Drugs” and allow law enforcement to “restart unconstitutional racial profiling of drivers.”
According to a recent OCM Report, the number of marijuana retailers licensed in the State grew almost three-fold over the past year. The total sales for 2024 are expected to reach nearly $870 Million.
OCM reported in April that the legal marijuana market in New York is close to reaching a total of $1.5 billion in sales.
Also that month, New York cannabis regulators and labor officials announced the launch of a workforce training program aimed at “providing comprehensive safety education to workers” in the state’s legal marijuana industry.
Separately, OCM’s press secretary recently indicated the office is working on plans to expand permitting and licensing rules that could allow adults to buy and consume marijuana at movie theaters. New York will be a leader in the legalization of marijuana by allowing sales at movie theaters.
Earlier this year, a collective of businesses licensed under the CAURD program called on Hochul to forgive tens of millions of dollars in high-cost loans issued under a governor-created social equity loan fund.
In December, a state legislator said that it was necessary to provide financial assistance to holders of CAURD licences. Many are suffering from high-cost loan payments.
Critics—including the NAACP New York State Conference, Black Cannabis Industry Association, Minority Cannabis Business Association, Service Disabled Veterans in Cannabis Association, Drug Policy Alliance, NYC NORML and VOCAL-NY—wrote to the governor earlier that month to express dismay at what they described as marijuana regulators’ “efforts in service of big corporations at the expense of small business and equity outcomes.”
Votes in the House to let VA doctors recommend medical marijuana to military veterans, and to support psychedelics researchers
Side Pocket Images. Photo by Chris Wallis.