Cannabis operators facing unfair tax practices that put the legal industry at risk
The Cannabis Industry in New York is at a crossroads. Over the past 18 months, the Office of Cannabis Management (OCM) has increased the pace of license issuance, helping to create a thriving legal, regulated market for cannabis products for adults in New York. Issuing these licenses puts pressure on the unregulated market, and keeps untested, potentially dangerous products out of the hands of consumers, while also increasing state tax revenue.
However, while the OCM has gotten the regulated industry off the ground, another major problem is brewing. Now that legal cannabis entities are licensed, they are facing unfair tax practices that put the legal industry at risk while it is still in its infancy. The current New York adult-use tax and excise tax policy requires licensees to front millions of dollars in tax payments to the New York State Department of Tax and Finance (NYSDTF) each quarter. This is due to the fact that payment is due only 20 days after the end of each fiscal quarter. However, the OCM and New York State law establish that cannabis operators may legally offer up to 30 day net terms on their sales. This results in many operators being unable to make timely payments, creating tax liens, or having to front cash for taxes for sales they have not collected on yet.
Thankfully there is a very simple solution to help all involved. Instead of requiring payment 20 days after the end of the quarter, the State should allow for 20 days after the end of the longest legally-allowable net terms period, so that operators have a chance to collect the revenue before having to pay taxes on sales that have not even come due or been paid for yet.
Last legislative session, the Assembly and Senate both overwhelmingly passed similar legislation A10196 (Lupardo) / S9359 (Cooney). However, it was vetoed at the executive level. This session, I hope that Governor Hochul takes appropriate action to support the Assembly’s one house budget bill on this issue. In doing so, she would increase timely tax collection for the State, and also show herself to be a partner to the hardworking operators from a billion-dollar-per-year industry in New York state. Working together is always in the best interest of everyone involved, and this is a practical solution to a growing problem.
I would like to commend Governor Hochul in advance for her consideration on this matter, and encourage her to make the best decision for the State.
Vincent Ning is CEO Co-Founder of Nabis. Founded in 2018, Nabis has established itself as the leading cannabis wholesale platform. Nabis supports the largest portfolio of brands in the world, exclusively supplying over 400 brands to nearly all of California, New York, and Nevada’s dispensaries.
“New York’s adult-use cannabis market is finally gaining momentum—but operators are being forced to front cash for taxes on sales they haven’t even been paid for yet. It’s a broken system. Fixing the excise tax timeline is not just fair—it’s common sense. I’ve been pushing for this change because it’s one of the most practical ways to support the legal market while improving tax compliance and collection—at zero cost to the State. I’m grateful to see other operators and the ECMA step up and push alongside us to get this done.”
Nicolas Guarino is CEO & Co-Founder, Jaunty
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