New York adult-use cannabis is subject to a 9% wholesale excise tax (paid by distributors on transfers to retailers) and a 13% retail excise tax at point of sale (9% state + 4% local). Medical cannabis is exempt from the adult-use excise but pays a 3.15% gross receipts excise (reduced from 7% in June 2024). Registered Organizations and microbusinesses selling direct to consumers pay the 9% wholesale tax calculated on 75% of the retail price. The previous THC potency-based tax was repealed effective June 1, 2024 and replaced with these simpler percentage rates. All cannabis excise filings go through the NY State Department of Taxation and Finance Web File portal.

Yes, in two layers. New York State decoupled from federal Section 280E for licensed cannabis operators effective tax year 2023 under the 2022-2023 state budget bill (signed April 9, 2022 by Gov. Hochul). New York City separately decoupled its Unincorporated Business Tax, General Corporation Tax, and Business Corporation Tax from 280E retroactive to tax year 2022, under S7508 signed November 17, 2023. NYC cannabis operators can deduct ordinary business expenses at both the state and city level even though those expenses are not deductible federally for adult-use operations. This dual-layer decoupling is unique to New York.

On April 23, 2026, state-licensed medical cannabis was rescheduled from Schedule I to Schedule III federally, lifting Section 280E restrictions for qualifying medical operators. For New York medical operators, this means ordinary business expenses may now be deductible on federal returns for tax year 2026. Treasury and the IRS have announced that detailed guidance is forthcoming. Combined with New York's state-level 280E decoupling and NYC's local decoupling, qualifying NY medical operators effectively have ordinary-business-expense deductibility on federal, state, and city returns. Adult-use cannabis remains on Schedule I and fully subject to 280E. Operators holding both medical and adult-use licenses must maintain accounting systems that segregate expenses by license type. A broader DEA hearing to consider rescheduling all cannabis begins June 29, 2026.

Effective June 1, 2024, New York repealed the original THC potency-based tax system (which charged $0.005/mg for flower, $0.008/mg for concentrates, and $0.03/mg for edibles) and replaced it with a 9% wholesale excise tax on distributor transfers and a 13% retail excise (9% state + 4% local) at point of sale. The change was estimated to reduce the effective total cannabis tax burden from roughly 38% to 22%, making legal cannabis more competitive against the illicit market. The medical cannabis excise was simultaneously reduced from 7% to 3.15% of gross receipts.

Registered Organizations (medical cannabis licensees authorized to sell adult-use) and microbusinesses are vertically integrated, meaning they handle cultivation, processing, and retail under one license. Because they do not have a separate wholesale transfer transaction, the 9% wholesale excise is applied to 75% of the final retail price rather than a true wholesale price. This is meaningful for tax calculation and requires careful accounting workflow setup. The 13% retail excise still applies on top, calculated on the full retail price.

We serve New York cannabis businesses statewide, including New York City (all five boroughs), Albany, Buffalo, Rochester, Syracuse, Yonkers, Long Island, the Hudson Valley, and all other markets. Our services are delivered remotely with full coverage for every NY cannabis operator regardless of location, including specialized NYC support for UBT, GCT, and BCT compliance.