New York Cannabis Sales Reach $162M in July as Operators Cite Banking, Tax Strain

Sales rose 10.4% year-over-year even as industry panelists flagged 280E tax limits, banking gaps and zoning disputes as ongoing hurdles for New York operators.

FILE — harvest · My 420 Tours / CC BY-SA 4.0

New York's legal cannabis market generated $162 million in sales in July, a 10.4% increase from a year earlier, according to data from business intelligence platform Headset cited by both MMJDaily and the Rochester Business Journal.

The Rochester Business Journal additionally reported the figure marked a 5.8% gain from June, a month-over-month detail not included in MMJDaily's account of the same Headset data.

Panel Highlights Growth and Friction

The sales figures were discussed during a virtual panel called "Business of Cannabis," presented by the Rochester Business Journal and Daily Record, according to both outlets. The Rochester Business Journal reported the panel was sponsored by Harris Beach Murtha.

Britni Tantalo, president and co-founder of Flower City Dispensary in Victor, told the panel that New York now has more than 600 legal cannabis brands, a figure she said puts the state ahead of more mature cannabis markets. "The evolution and innovation happening in the New York market now is pretty amazing," Tantalo said, according to both MMJDaily and the Rochester Business Journal.

Zoning and Regulatory Disputes

Jason Klimek, partner and co-leader of the Cannabis Industry Team at Harris Beach Murtha, addressed ongoing disputes between municipalities and cannabis businesses over local zoning rules, including how far dispensaries must be located from schools. He said an appellate court ruling affirmed that the state's Marihuana Regulation and Tax Act preempts local zoning laws on school setback distances. "While dispensary owners may have to litigate such matters, the town may not have the final say, especially if there is state law," Klimek said, per both source reports. He also called for improved communication between operators and the state Office of Cannabis Management.

Federal Tax and Banking Limits

Rich Farley, a tax partner at Bowers, discussed Section 280E, the federal provision barring cannabis businesses from deducting many ordinary operating expenses. "It's a huge hurdle," Farley said, according to both outlets. He urged operators to weigh long-term business goals when choosing an entity structure rather than treating it purely as a tax decision.

Judy Hulpiau, outsourced controller at Bowers, said cannabis businesses often carry substantial cash and inventory, driving up security costs, while limited access to traditional banking complicates financial management. MMJDaily reported Hulpiau said federal rescheduling of marijuana could open broader funding opportunities for the industry; the Rochester Business Journal similarly reported she said rescheduling at the federal level could open the door to greater funding opportunities, though the two accounts phrase the statement somewhat differently.

State Licensing Snapshot

State licensing records show New York currently has 877 open retail licenses, 247 cultivation licenses and 509 manufacturing licenses, with 417 applications still pending as of early September.

Recent activity on the state license roster, reviewed by Cannabis Newz, shows a mix of corporate restructuring and exits. Sunnyside's licensee name changed to Valley Agriceuticals LLC, and Rise's licensee name changed to Fiorello Pharmaceuticals Inc., according to state records. Veterans Holdings and Copper City Bud LLC also updated their registered names, to Veterans Holdings Inc. and Uncle Jr's Grass Station LLC, respectively.

State records also show several licenses became inactive in late August, including those held by Empire Distribution Group LLC, CM Spencer Farms LLC, Claverack Creek Farm, Urban World LLC and Upsprout LLC. The records reviewed do not specify reasons for the closures or name changes.

What to Watch

The panelists' comments suggest New York's cannabis industry is expanding in brand count and sales even as structural obstacles — federal tax treatment under 280E, banking access and local zoning fights — remain unresolved. Whether the pace of sales growth reported by Headset continues, and whether federal rescheduling discussed by Hulpiau materializes into expanded financing, remain open questions not addressed in the source reporting. The volume of license inactivations and name changes tracked in state records also bears watching as a possible indicator of consolidation within the market, though the available data does not establish a clear trend.