Taxing and regulating THC hemp beverages is a common-sense solution
In 1968, we recorded our first album, “Cheech and Chong,” which aimed to present cannabis in a light that went beyond the prevailing, often racist, stereotypes of the time. Our subsequent album, “Big Bambu,” achieved the distinction of becoming the highest-selling comedy record ever, and “Los Cochino’s,” our third album, was awarded a Grammy.
One might assume that the absurd anti-cannabis law enforcement tactics of the past are long gone. However, this is not the case. For example, Tommy spent nine months in prison in 2003 for possessing a glass bong. Many others have been incarcerated for nonviolent cannabis-related offenses that are no longer illegal, yet their sentences continue.
For over 50 years, we have actively worked to combat negative perceptions about cannabis in America. Civic engagement and participation in government advocacy are integral to who we are. Unfortunately, outdated stereotypes and negative perceptions about cannabis and hemp still persist.
We are deeply committed to social justice and equal economic opportunity. We’re proud to have supported social justice efforts long before the term gained widespread recognition, both in New York and across the country.
As an industry, we’ve made significant progress. Our cannabis company has grown into one of the leading national brands, but we recognize that education around THC and hemp is still in its early stages. We have always believed in the immense potential of the plant, from fostering creativity and relaxation to its healing properties.
For instance, New York has implemented a highly restrictive approach to THC hemp beverages, imposing a cap of merely 1mg of THC, which effectively negates the functionality and utility of these products. In contrast, other states have chosen to legalize and implement sensible regulations for THC hemp beverages.
Legalizing and regulating THC hemp beverages in New York is a sensible decision that offers benefits for everyone involved. Statistics indicate a significant decline in alcohol consumption: in 2024, 58 percent of Americans reported drinking alcohol, a decrease from 70 percent in 1981. Furthermore, in 2023, 45 percent of Gen Z consumers stated they do not consume alcohol.
A reduction in alcohol sales directly impacts tax revenue and employment opportunities for individuals and unions. Notably, states that have legalized hemp beverages have experienced substantial tax revenue that more than compensates for the decline in alcohol sales and stimulates job growth.
In 2024, Minnesota, with a population of less than 6 million, generated over $12 million in tax revenue from THC hemp beverages. Louisiana, with a population under 5 million, implemented a 3 percent excise tax on all retail hemp beverages, resulting in an increase of $1 million in retail taxes.
Given that New York is facing substantial cuts in federal aid due to the “One Big Beautiful Bill,” the need for new revenue and job creation cannot be overstated. Policymakers in Albany can implement a few straightforward changes to regulate THC Hemp beverages, which could generate tens of millions in new revenue and create new jobs:
- Slightly raising the THC cap to 5mg.
- Raising the age requirement for purchase to 21 years old.
- Setting a 10 percent excise tax, mirroring the existing tax on adult-use cannabis.
Where could this new revenue be allocated?
It could provide immediate resources for an overwhelmed and underfunded Office of Cannabis Management (OCM), enabling them to effectively address illegal sales across the state. Hemp farmers have advocated for a relief fund for several years, and these funds could also assist CAURD license holders in alleviating their significant debt.
Achieving this will require a smart, unified, and efficient approach. Manufacturers, processors, growers, distributors, and labor will need to collaborate to educate policymakers and lawmakers on the clear benefits of establishing a regulated structure for a safe, tested, and taxed product that consumers are already interested in.
We are enthusiastic to be part of this effort to ultimately “lift all boats” within the hemp and cannabis sector.
Taxing and regulating an already available product like THC hemp beverages is a common-sense approach that will help bring much-needed clarity to a currently ambiguous issue facing New York. We invite you to join us in making this change.
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