Why this matters
Taxes shape the final price patients and consumers pay at the counter. New York’s 2024–2025 changes lowered the tax burden on medical cannabis and simplified adult-use taxes—two shifts that can influence affordability in different ways.
The medical side: 3.15% excise (since June 1, 2024)
- Rate & base: Registered organizations pay 3.15% on gross receipts for medical cannabis sold/furnished to certified patients or caregivers. The tax is not added as a separate line item to the patient’s receipt (it’s embedded in pricing).
- Why it changed: NY’s 2024 budget amended prior rules, lowering the burden compared to earlier years (when the effective rate and structure were different).
The adult-use side: 9% wholesale + 13% retail
- Distributor tax: 9% on wholesale transfers to retailers. For registered organizations or microbusinesses selling direct to retail customers, the 9% applies to 75% of the retail price.
- Retail tax: 13% excise on adult-use retail sales (adult-use cannabis itself isn’t subject to sales tax).
- What changed in 2024: New York repealed the potency-based tax and shifted to these simpler excise rates, effective June 1, 2024.
How this hits the register (simple examples)
Example A — Medical purchase
A $100 medical product at the counter already reflects the producer’s embedded 3.15% excise. Patients don’t see a separate cannabis tax line item. (Illustrative math; actual pricing varies by business.)
Example B — Adult-use purchase
A $100 adult-use item sold at a dispensary is subject to a 13% retail excise (so $13 in cannabis excise). The wholesale side’s 9% affects retailer cost and ultimately shelf price. Adult-use products are exempt from sales tax. (Illustrative math.)
Patient affordability: near-term vs. long-term
- Near-term: The lower medical excise improves conditions for patient pricing relative to prior years—but out-the-door prices still depend on supply chain costs and competitive dynamics.
- Long-term: If federal rescheduling to Schedule III is finalized, removal of 280E could reduce operators’ tax drag, enabling more sustainable price reductions or value (larger formats, loyalty, etc.). Until then, 280E still applies. (Inference paired with federal sources.)
Why New York simplified adult-use taxes
A potency-based system adds complexity and compliance risk, which can create friction that gets baked into prices. By moving to clear percentage excises at wholesale and retail, NY is following a simpler path that operators (and auditors) can execute more predictably.
Tips for patients deciding medical vs. adult-use
- If you qualify for medical: Between the 3.15% excise and clinician guidance on product selection, medical often offers better value and consistency.
- Ask about assistance: Some operators run patient discounts or compassionate pricing—made more feasible as tax headwinds ease. (Market inference based on tax shifts.)
- Check product equivalence: If the same formulation exists on both shelves, total cost can differ because adult-use adds the 13% retail tax.
Bottom line
New York’s 2025 tax landscape is friendlier to medical patients than it was pre-June 2024, and adult-use is simpler for operators (and easier to understand for consumers). Watch federal rescheduling next; its 280E impact could be the final piece that nudges prices lower over time.
Not medical or tax advice. For personal medical care, consult your clinician; for tax matters, consult a qualified professional.
