New York Cannabis Market Stabilizes After Three-Year Rollout
State data shows licensed sales climbing while illicit storefronts decline for the first time since 2023.
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Licensed Sales Hit $150M in May
New York's licensed adult-use cannabis retailers generated $150 million in sales during May 2026, a 22% increase over the same month in 2025. The Office of Cannabis Management (OCM) reported the figure in its monthly market update published June 23. The state now has 287 licensed dispensaries, up from 178 in May 2025.
May's total is the highest since the market launched. Average per-store revenue climbed to $523,000, compared to $412,000 a year earlier.
Unlicensed Storefronts Drop for First Time
The number of unlicensed cannabis storefronts operating in New York declined to an estimated 1,240 in June, down from a peak of 1,890 in March 2025. That's the first sustained decline since OCM began tracking the metric in early 2023.
State enforcement actions closed 412 unlicensed shops between January and May 2026, with the Sheriff's Office Cannabis Enforcement Task Force conducting 89 raids in New York City alone during that stretch and seizing $14.3 million in product.
Conditional Licenses Convert to Full Retail
OCM converted 63 Conditional Adult-Use Retail Dispensary (CAURD) licenses to full adult-use retail licenses in the second quarter of 2026. The conversions allow operators to source from the full pool of licensed cultivators and manufacturers, not just justice-involved applicants.
New York issued 463 CAURD licenses in 2022 and 2023 as part of its equity-first rollout. As of June 2026, 198 have converted to full retail status. Remaining CAURD licensees face a December 31, 2026 deadline to complete the conversion or forfeit their licenses.
Cultivator Inventory Backlog Clears
Licensed cultivators reported inventory levels of 42,000 pounds in May, down from a peak of 89,000 pounds in November 2025. The drop signals improving demand from the expanding retail network.
Wholesale prices stabilized at an average of $1,850 per pound for indoor flower in May, compared to $2,100 in May 2025. OCM attributes the price compression to increased supply from 112 licensed cultivators, up from 68 a year earlier.
Tax Revenue Climbs 31% Year-Over-Year
New York collected $47.2 million in cannabis excise and sales taxes during the second quarter of 2026, a 31% increase over Q2 2025. The state imposes a 13% retail excise tax plus a potency-based tax on cultivators.
Total cannabis tax revenue for the first half of 2026 reached $88.1 million. That puts the state on track to exceed the $150 million forecast in Governor Kathy Hochul's January budget proposal.
What OCM Says Comes Next
OCM Executive Director Tremaine Wright said the agency will focus enforcement resources on the remaining unlicensed storefronts through the end of 2026. The agency projects 400 licensed dispensaries operating statewide by year-end.
New York plans to issue its first on-site consumption licenses in the third quarter of 2026. For full background on New York's cannabis rollout, see the CannIntel topic hub on New York Cannabis Rollout.
For complete background, history, and our ongoing coverage of this story:
Open the CannIntel topic hub →Frequently asked questions
How many licensed cannabis dispensaries are operating in New York?
As of June 2026, New York has 287 licensed adult-use cannabis dispensaries, up from 178 in May 2025. The Office of Cannabis Management projects 400 licensed stores by the end of 2026.
What is a CAURD license in New York?
A Conditional Adult-Use Retail Dispensary (CAURD) license was New York's equity-first license class issued in 2022-2023. CAURD operators must convert to full retail licenses by December 31, 2026 or forfeit their licenses. As of June 2026, 198 of 463 CAURD licenses have converted.
How much tax revenue is New York collecting from cannabis sales?
New York collected $47.2 million in cannabis excise and sales taxes during Q2 2026, a 31% increase over the same period in 2025. The state is on track to exceed $150 million in annual cannabis tax revenue for 2026.
Are unlicensed cannabis shops still operating in New York?
Yes, but the number is declining. An estimated 1,240 unlicensed storefronts were operating in June 2026, down from a peak of 1,890 in March 2025. State enforcement actions closed 412 unlicensed shops between January and May 2026.
Sources
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