New York Monthly Puff: NY Cannabis Hits $3.3B as 280E Rescheduling Lands

New York Monthly Puff: NY Cannabis Hits $3.3B as 280E Rescheduling Lands

New York cannabis 280E rescheduling moved from speculation to active federal guidance this month, and the state’s market just crossed $3.3 billion in total sales five years after the MRTA passed. Treasury and the IRS are preparing tax rules tied to the DOJ’s Schedule III order, while New York retailers logged $1.8 billion in 2025 alone, a 73.8% year-over-year jump. A new microbusiness bill is also moving in Albany, even as enforcement gaps and uneven sales concentration shape the rest of the picture.

Top Headlines This Month

• ⚖️ Treasury and IRS prep 280E guidance after Schedule III order
• 📊 New York hits $3.3B in sales, $429M in excise tax
• 🏛️ Senate Bill 10113 expands microbusiness role in showcase events
• 🌉 2025 sales near $1.8B, up 73.8% year-over-year

⚖️ FEDERAL: TREASURY AND IRS ANNOUNCE 280E GUIDANCE FOLLOWING DOJ MEDICAL MARIJUANA RESCHEDULING ORDER

On April 23, Treasury and the IRS announced plans to issue federal tax guidance addressing the consequences of the Department of Justice’s Final Order implementing President Trump’s December 18, 2025 Executive Order on Increasing Medical Marijuana and Cannabidiol Research. The DOJ Final Order places marijuana contained in FDA-approved products or subject to a state medical marijuana license, along with certain marijuana extracts and certain naturally derived delta-9-tetrahydrocannabinols, into Schedule III of the Controlled Substances Act. Unlicensed marijuana crops, bulk marijuana, and any marijuana and marijuana extract that has not yet been incorporated into an FDA-approved drug product remain in Schedule I. Section 280E of the Internal Revenue Code generally disallows deductions and credits for businesses trafficking in Schedule I or II controlled substances, so businesses that no longer fall into those schedules as a result of the Final Order will generally be able to claim those deductions and credits. Guidance will also clarify how 280E applies to businesses with multiple activities, addressing how expenses are apportioned between Schedule I/II and non-Schedule I/II operations. A transition rule will treat rescheduling as applying to the full taxable year that includes the effective date of the Final Order.

For state-licensed cannabis businesses, the removal of 280E as a bar to claiming deductions and credits is a direct financial shift. The apportionment guidance matters especially for licensees running mixed operations, and the transition rule’s full-year application means the tax benefit is not limited to a partial period. The actual dollar impact depends on when the Final Order’s effective date falls within a business’s tax year.

📊 NEW YORK: $3.3B IN TOTAL SALES AND $429M IN EXCISE TAX REVENUE AS ENFORCEMENT AND EQUITY GAPS PERSIST

Five years after the Marihuana Regulation and Taxation Act passed in 2021, New York’s legal cannabis market has reached $3.3 billion in total sales as of March 2026, generating $429 million in state excise tax revenue at the 13% rate set by the MRTA. Adult-use consumption rose over 3% from pre-MRTA 2018 levels to 2023, and the number of licensed dispensaries continues to grow, with nearly 50 operating in the Rochester-Finger Lakes region alone. Sales are concentrated among high-performing locations: OCM’s data through November 30, 2025 shows the top 10 stores account for 29% of statewide sales, and the top-performing 50% of all stores generate roughly 80% of total sales. Long Island made up 47% of annualized adult-use sales across New York’s 10 regions as of that same date. At the same time, Henrietta town supervisor Stephen Schultz reported that the county received $304,451 in Q1 2025 tax revenue against an expected $526,738 – a 42% shortfall – and enforcement remains constrained: OCM’s budget sits at $60-70 million, and a court injunction limiting its inspection powers and the completion of a 2024 task force resulted in fewer enforcement actions in 2025 than the prior year. OCM reported seizing 3,787 pounds of illegal product worth $20.3 million in the prior year. Social and economic equity licensees represent 55% of all licenses and 77% of adult-use retail dispensaries, but advocates and OCM’s own 2025 equity report acknowledge gaps in funding and operational support for those businesses.

The sales and revenue numbers confirm real market growth, but the concentration of sales in a small share of stores and the regional dominance of Long Island signal an uneven playing field. The tax distribution gap in Henrietta and OCM’s limited enforcement budget are ongoing pressure points – municipalities relying on cannabis revenue are already seeing those expectations fall short, and the illicit market remains active enough to undermine both licensed sales and public safety goals.

🏛️ NEW YORK: SENATE BILL 10113 WOULD EXPAND MICROBUSINESS PARTICIPATION IN CANNABIS SHOWCASE EVENTS

Senate Bill 10113, filed April 30 by State Senator Michelle Hinchey (D), would allow microbusiness licensees authorized to conduct retail sales to serve as both a processor and cultivator for purposes of cannabis showcase event permits. Under current New York law, cannabis showcase events allow licensed businesses to sell marijuana products at temporary events outside traditional retail storefronts. Microbusinesses are designed to allow smaller operators to cultivate, process, distribute, and sell marijuana under a more limited license type than larger vertically integrated businesses, and the bill would broaden how those licensees can participate in showcase events. The bill makes a targeted change to the state’s marijuana law rather than restructuring the broader regulatory framework. It has been referred to the Senate Investigations and Government Operations Committee, and no vote has been scheduled.

The bill is narrow in scope but directly relevant to smaller licensees looking to use showcase events as a sales channel. If passed, it removes ambiguity about what roles a microbusiness can fill at those events, which could open up additional revenue opportunities for licensees who currently operate under a more limited license type than larger vertically integrated businesses in New York’s structure.

🌉 NEW YORK: LEGAL CANNABIS SALES REACH NEARLY $1.8B IN 2025, UP 73.8% YEAR-OVER-YEAR

New York’s legal cannabis market surged to nearly $1.8 billion in 2025 sales, a 73.8% increase year-over-year, according to data published in April 2026. That growth rate outpaces mature markets – California fell 2.7% to $4.8 billion and Michigan dropped 2.3% to $3.18 billion in 2025, while Missouri grew 3.9% to $1.5 billion over the same period. Total sales across the top 15 state markets exceeded $25 billion in 2025. Ohio, as a point of comparison, reported $331.8 million in combined medical and adult-use sales as of April 11, 2026, with recreational accounting for $282.5 million of that figure across 40.9 million lifetime transactions.

New York’s year-over-year growth rate reflects a market still in an early expansion phase rather than one approaching saturation, consistent with observations from within the industry that the state is far from its maturity point. The gap between New York’s growth trajectory and flat or declining figures in established markets like California and Michigan reinforces that retail and licensing activity in New York remains one of the more active stories in the country right now.

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The Bottom Line

New York cannabis 280E rescheduling guidance, $3.3 billion in cumulative sales, and a 73.8% jump in 2025 retail revenue define the month, alongside a microbusiness showcase bill in Albany. Enforcement constraints and concentrated sales among top stores remain the counterweight to the growth numbers.