New York’s Marijuana Regulation & Taxation Act (2021)

Estimated reading time: 1 minute

First Name *

Last Name *

Email *

Phone

How can we help you?

Introduction

On March 31, 2021, Governor Andrew Cuomo signed legislation (S.854-A/A.1248-A) legalizing adult-use cannabis in New York resulting in the New York Marijuana Regulation and Taxation Act of 2021.

The law will establish the Office of Cannabis Management to implement a comprehensive regulatory framework that will cover medical, adult-use, and cannabinoid hemp. The law will also expand New York State’s existing medical marijuana and cannabinoid hemp programs.

Below is a summary of key provisions of the New York Marijuana Regulation and Taxation Act.

Legal Possession and Personal Liberty

• Personal possession limit of up to three ounces of cannabis and 24 grams of cannabis concentrate. Legal possession of up to three ounces is effective immediately.
• Home cultivation: A maximum of 12 plants can be grown per household with more than one adult.
  • Three mature plants and three immature plants for adults over 21
  • Six mature plants and six immature plants maximum per household
  • Home growing will not take effect until regulators set rules for it. Regulators have a maximum of six months to do so for medical patients and must do so for adult-use consumers no later than 18 months after the first retail adult-use sales begin.
• Police cannot use the odor of cannabis to justify searches.
• Legislation permits the sale of hemp flower in the cannabinoid hemp program and allows for smokeable forms only when adult-use retail stores are operational.

Expungement, Release, and Resentencing

• Legalized conduct will be automatically expunged.

Delivery 

• Retailers, microbusinesses, and delivery licensees are allowed to deliver to cannabis consumers.
• Cultivators are prohibited from holding delivery licenses.
• No entity may hold an interest in more than one delivery license.
• No more than 25 full-time employees per delivery licensee.
• The granting of delivery licenses shall promote social and economic equity applicants. 

Licensing and Regulatory Structure

• Legislation establishes the New York State Cannabis Control Board and the Office of Cannabis Management.
• The Office of Cannabis Management — a new independent agency operating as part of the New York State Liquor Authority — is responsible for regulating the adult-use cannabis market as well as the existing medical marijuana and hemp programs and will be overseen by a five-member Cannabis Control Board. The governor shall select three members, including the chairperson. The President of the Senate and Speaker of the Assembly shall select one member each.
• A goal is set of 50% of licenses going to social and economic equity applicants. Social equity applicants are defined as people from “communities disproportionately impacted by the enforcement of cannabis prohibition,” as well as minority- and women-owned businesses, disabled veterans, and financially distressed farmers.
• Regulators may allow existing medical cannabis businesses to convert no more than three of their existing storefronts to dual use if they pay a one-time “special licensing fee” to fund social and economic equity and incubator assistance.
• Social consumption sites and delivery services are permitted.

Taxation and Revenue Distribution

• Legislation imposes a hybrid tax, with both a potency-based tax on distributors and a point-of-sale tax:
  • levies a tax on distributors at 0.5 cents per milligram of THC for flower, 0.8 cents per milligram of THC for concentrates, and 3 cents per milligram of THC for edibles; and
  • imposes a point of sale retail tax of 9% state tax and a 4% local tax (75% of the local earnings would go to municipalities and 25% to counties).
• After regulatory and administrative costs, 40% of cannabis revenue will go to community grants reinvestment, 20% to schools, and 40% to drug treatment facilities and public education, including for a youth-focused public health education and prevention campaign, a statewide public health campaign on the health effects of cannabis, and for substance use disorder treatment.

Local Control

• Cities, towns, and villages may opt-out of allowing adult-use cannabis retail dispensaries or on-site consumption licenses by passing a local law by December 31, 2021 or nine months after the effective date of the legislation.

Improving Medical Access

• The state’s existing medical cannabis program will be changed to expand the list of qualifying conditions and allow patients to smoke marijuana products.
• Patients can also obtain a 60-day, rather than a 30-day, supply.

Conclusion

The New York Marijuana Regulation and Taxation Act marks a pivotal shift in cannabis legislation, ushering in a comprehensive framework that supports adult-use legalization, expands medical access, and prioritizes social and economic equity. From legal home cultivation and automatic expungement to progressive licensing opportunities and targeted revenue reinvestment, this landmark legislation positions New York as a model for cannabis reform.

As the state continues to roll out regulations and licensing pathways, now is the time for entrepreneurs, operators, and advocates to prepare. Whether you’re exploring entry into the New York cannabis market, seeking guidance on compliance, or looking to understand how these changes affect your business or community — staying informed and engaged is key.

Looking to get licensed, expand your cannabis operations, or navigate regulatory requirements in New York? Contact Catalyst BC today for expert consulting, turnkey solutions, and hands-on support every step of the way. Let’s build a compliant, equitable, and thriving cannabis future together.

Learn more about our New York Cannabis Consulting Services or Book a Complimentary Consultation.

New York’s Marijuana Regulation & Taxation Act FAQs

Additional Resources

• Services
• Don’t Get Left Behind: Get Your New York Cannabis License
• New York Cannabis Facility Design: Key Strategies for Success
• 2025 New York Adult-Use Processor Type 3 Branding Licenses Now Available
• What is a New York Adult-Use Processor Type 3 Branding License

Free eBooks For Cannabis Business Success

Latest Articles

• 
  Cannabis Startup Costs: From Licensing to Profitability
  Starting a legal cannabis business isn’t just about getting a license—it’s about building a profitable, compliant, and sustainable operation in one of the world’s most capital-intensive and regulated industries. Many entrepreneurs enter this space with many goals, good intentions, and passion, but ultimately fail because they underestimate the cost, complexity, experience, and time required to turn a cannabis license into a thriving business.
• 
  Cannabis License Pitfalls: How to Avoid Common Cannabis Licensing Mistakes
  As new adult-use programs launch, many entrepreneurs are eager to start growing, processing, or selling cannabis. Excitement runs high, but the industry’s heavy regulations and complex operations can quickly overwhelm even experienced business owners. Common mistakes include underestimating compliance requirements, rushing facility design, skipping proper procedures, and more.
• 
  Maximizing Your Minnesota Cannabis Microbusiness or Mezzobusiness License
  Minnesota’s new adult-use cannabis law allows microbusinesses (one store, up to 5,000 sq ft indoor, ½ acre outdoor) and mezzobusinesses (up to 3 stores, 15,000 sq ft indoor, 1 acre outdoor) to cultivate, manufacture, sell, and transport cannabis under one license. These vertically integrated licenses offer flexibility, but also come with complex state rules.
• 
  The Recipe for a Top-Tier Cannabis Dispensary
  Operating a highly reviewed, top-performing cannabis dispensary takes more than simply stocking product and unlocking the doors. It requires operational discipline, regulatory expertise, top-tier customer service, dynamic merchandising, and a culture of accountability and community. With the cannabis industry continuing to expand—and regulations constantly evolving—success is defined by how seamlessly a dispensary integrates compliance, product curation, staff training, and marketing into day-to-day operations.
• 
  Minnesota Lottery Results: June 5 Cannabis License Drawings and What’s Next
  The Minnesota Lottery for cannabis business licenses reached a pivotal milestone on June 5, as the Office of Cannabis Management (OCM) conducted randomized drawings for select license types. These lotteries were open to both social equity applicants and general applicants vying for limited licenses to operate as cultivators, manufacturers, and mezzobusinesses. Additionally, a separate lottery was held exclusively for social equity applicants seeking a retail cannabis license.
• 
  Cannabis Compliance Isn’t Just a Department—It’s a System
  Compliance in the cannabis industry is too often approached as a box-checking exercise or relegated to a single department or, in some cases, a single person. In reality, cannabis compliance must be woven into every aspect of operations – from seed to sale – to truly protect and propel a business forward.