Here’s Why This Jar of Weed Costs $60 Legally
The New York Times
Following the rules is expensive for dispensaries and their customers in New York.
It costs to play by the rules.
That’s why 52 percent of Terp Bros’s income after the costs of products goes to federal, state and local income taxes. Were the dispensary a traditional business, it would pay about 36 percent, according to the accountant, Justin Ash of Accounting Buds.
Customers also pay a higher sales tax on cannabis (13 percent, or an extra $7.80 on those jars of 91 Octane) than on alcohol (8.875 percent).
And legal stores in New York have faced competition from the unregulated market, which exploded after recreational cannabis was legalized in 2021. A slow licensing process, tight rules and a lack of state-promised financial support for legal sellers initially helped illicit retailers gain an advantage. In recent months the authorities have cracked down on illegal shops, even as thousands remain in business.
Still, sales have risen at licensed dispensaries, and regulators have proposed easing bans on discounts and loyalty programs to help attract customers. The state also expanded licensing beyond the initial pool of people with cannabis convictions and business experience.
To stay afloat, Mr. Rivera, 37, said, “you have to be very lean.”
