By / March 1, 2023

New York Has a Cannabis Surplus of 150 Tons. Now What?

A message banning smoking cannabis in New York in public places appeared in Times Square following new cannabis legalization laws. The legalization of cannabis in New York has also led to a boom in cannabis cultivation in the northern part of the state, where the first harvest produced 150,000 kilograms of cannabis worth $250 million.

Only a Handful of Licensed Dispensaries Open in New York

To date, only a handful of state-licensed dispensaries have opened in New York, adding to the hundreds of cannabis retail stores, home delivery services, and those offering their products in parks and on street corners throughout the city.

Due to the pervasive smell and widespread sale of cannabis, New York Mayor Eric Adams wants to step up efforts to combat unlicensed distributors. In one case, a school bus converted into a traveling cannabis kiosk was stopped near Rockaway Beach.

Big Money

Big money is at stake, and not just in New York. As of March 2022, states where cannabis is legally grown and sold have seen a total of $11.2 billion in tax revenue from legal adult-use cannabis sales. The legal cannabis market across the United States could reach $66 billion by 2025.

“We need to focus on cannabis,” Adams said last week at a New York town hall in a series of speeches in which he expressed concern that illegal stores are selling unregulated and untested cannabis products that may attract minors. “We cannot allow people to make a mockery of our system,” he said.

The New York Cannabis “System”

This “system” is designed to promote social justice, but critics say the legal market in New York is burdened with permits, licenses, taxes, and regulations that, despite the possibility of arrest and seizure, hardly hinder the long-term illegal trade.

Under rules drafted by the previous mayor, Bill de Blasio, the New York Office of Cannabis Management favors growers and dispensaries run by members of communities disproportionately affected by decades of prohibition, a century-long period that the American Civil Liberties Union describes as a “racist war.”

“Over the past 30 years, black New York residents have been 15 times more likely to be arrested for cannabis than white New Yorkers,” the board says. “It was eight times more likely for Hispanics.” That’s why most of the licenses granted so far have been given to black and Hispanic people.

But the problem is that New York has issued far more licenses to grow cannabis than to sell it, creating a sizable surplus of unsold cannabis.

Cannabis Surplus While New York Sales Tank

One cannabis crop in New York – Melany Dobson’s Hudson Cannabis – has 1,225 kilograms of flowers collected in storage containers awaiting certification from one of the state’s five testing labs. Their market value on the wholesale market is about $600 per kilogram, with a total inventory value of $800,000.

But wholesale prices in New York are plummeting, as they are across the United States, where many growers have gone bankrupt, and the federal government in Washington is at a standstill and paralyzed by political wrangling over full legalization.

US Cannabis Stocks Outside of New York: State by State


California is the third-largest producer, with 577 tons of inventory. State tax authorities say customers bought $5.3 billion worth of legal cannabis products in 2022, an 8 percent drop from the previous year and the first decline since cannabis sales were legalized in 2018. The industry is facing several adversities, including competition from a growing illegal market, licensing delays, and a collapse in wholesale prices.


The state of Kansas opposes legalization and maintains penalties for possession and trafficking. In 2015, 10 Kansas sheriffs sued neighboring Colorado, claiming that the state’s cannabis legalization placed an undue burden on Kansas law enforcement, but the U.S. Supreme Court refused to hear the case. In December, Kansas was again in the spotlight after police issued a ticket to a cancer patient for using cannabis to relieve symptoms of the disease.


Manufacturing giant with 623 tons in stock. Last week, Denver licensed its first consumer bus licensed to sell cannabis, offering airport transfers. Colorado’s cannabis sales fell 20% last year to $1.8 billion, and the industry is on target in the debate over gun ownership. Licensed medical cannabis patients cannot possess firearms under federal law. But a federal judge in Oklahoma has ruled that the ban is unconstitutional.


The state of Oregon is another cannabis giant, with current cannabis stocks at 614 tons. But last week, the Oregon Liquor & Cannabis Commission said the recreational cannabis industry is in its “weakest” economic situation since 2016. Demand is declining, and the harvest from indoor cannabis crops will cost $1,000 per kilogram, compared to $214 per kilogram for cannabis grown outdoors.

(Featured image by Marty O’Neill via Unsplash)

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