By Daniel Okafor
ALBANY — New York’s legal cannabis market passed $4.1 billion in retail sales this week, Gov. Kathy Hochul announced Tuesday. But figures from the state Comptroller show that Western New York, home to one of the state’s densest clusters of dispensaries, is getting a much smaller slice of the local tax money those sales produce.
Western New York had 78 adult-use dispensaries operating as of July 15, according to a data set published by Comptroller Thomas P. DiNapoli’s office. That is 11 percent of the 700 open statewide, tied with the Capital District for the second most of any region after New York City. Yet the region’s counties and municipalities received $2.23 million of the $33.7 million in local cannabis tax revenue the state distributed in the first half of 2026, or about 6.6 percent.
That works out to roughly $28,600 per Western New York dispensary over the two quarters, compared with about $45,400 in New York City, $41,600 in the Capital District, $40,900 in the Finger Lakes and $48,200 statewide, a Buffalo Chronicle calculation from the Comptroller’s figures shows.
The comparison is rough. The dispensary counts are a snapshot from July, while the payments reflect taxes remitted over earlier months, so a region where many shops opened recently will look weaker per store than it will once those shops have a full year of sales. Still, the gap matters for local budgets now. Erie County’s proposed 2027 budget lists “better-than-expected growth in other revenues including adult-use cannabis sales” among the ways it could close projected gaps of $65.6 million in 2028, $73.8 million in 2029 and $68.5 million in 2030.
The state’s milestone
The governor’s office said in its announcement that adult-use sales have topped $4.1 billion since they began in December 2022, including $1.41 billion through the third quarter of 2026. It said 744 licensed dispensaries are now open, and that 56 percent of adult-use licenses have gone to social and economic equity applicants.
“When New York legalized adult-use cannabis, we made a promise to build an industry that is safe, fair and creates real opportunity for the communities hit hardest by decades of failed drug policies. Topping $4 billion in sales shows that promise is a reality,” Ms. Hochul said in the release. “We will keep shutting down illegal shops, stand up for small businesses that play by the rules and ensure this industry continues on a path of growth and equity.”
John Kagia, executive director of the state Office of Cannabis Management, said in the same release that “the real story is the people and businesses behind that number.”
“Our responsibility now is to build on that momentum and help create the conditions for these businesses and this industry to thrive for years to come,” Mr. Kagia said.
Jessica Garcia, who chairs the state Cannabis Control Board, said the milestone “raises the bar for what comes next.”
“The measure of this market’s success will continue to be not only how much it grows, but whether that growth creates a lasting opportunity for the New Yorkers this market was designed to serve,” Ms. Garcia said.
How the money reaches Western New York
Adult-use cannabis is not subject to the regular sales tax. Instead, retail buyers pay a 9 percent state tax and a 4 percent local tax, and distributors pay a separate 9 percent tax on products they sell to retailers. Retailers file the local tax quarterly with the Department of Taxation and Finance. The Comptroller’s office then pays it out to counties, which keep 25 percent and must pass the other 75 percent to the cities, towns and villages that host dispensaries within 30 days, according to an explainer from the Comptroller’s office. The state Office of Cannabis Management gives counties reports of sales by dispensary so they can split the money in proportion.
Erie County accounts for 56 of the region’s 78 dispensaries in the July data. The City of Buffalo had 18, the Town of Amherst nine and the Town of Cheektowaga eight. Niagara County had 12, led by four in the City of Niagara Falls. Chautauqua County had six, five of them in Jamestown. Cattaraugus had three, two of them in Ellicottville, and Allegany had one, in the Village of Alfred.
Payments to the region are rising. Western New York governments got $1.05 million in the first quarter of 2026 and $1.18 million in the second, an increase of about 13 percent. Erie County does not list cannabis as its own line in its budget. The county’s budget message folds the cannabis excise tax into a broader category alongside Off-Track Betting revenue, the mortgage tax and other receipts.
Statewide, a growing but uneven stream
Statewide local distributions rose from $5.3 million in 2023 to $27 million in 2024 and $54.8 million in 2025, according to the Comptroller’s data. They reached $33.7 million in the first half of 2026, for a cumulative $120.9 million. First-half payments were up 37 percent from the same period of 2025, though the second-quarter payment alone was 8.5 percent lower than a year earlier.
For the state’s own budget, the Assembly’s 2026 budget analysis estimated adult-use cannabis tax collections at about $209 million for the 2025-26 fiscal year and roughly $316 million for 2026-27, as reported by The Fresh Toast. That outlet also reported that lawmakers and regulators are weighing whether the current tax structure leaves licensed dispensaries enough margin to compete with unlicensed sellers.
Enforcement figures in the governor’s release point to the same competition. The state said it has padlocked 738 illegal storefronts and seized products worth an estimated $276.9 million to date, including 191 closures and $125 million in seizures this year.
The state has also begun returning some cannabis revenue through its Community Grants Reinvestment Fund. The governor’s office said $35 million has been committed so far, with $5 million awarded to 50 community-based organizations in the first round.
What to watch
The Comptroller’s office says it expects to make most local cannabis payments in January, April, July and October, so the next quarterly figures should show whether the region’s per-store gap is narrowing as newer shops mature. The governor’s release counted 744 dispensaries open statewide, up from 700 in the Comptroller’s July snapshot, though it did not break the new total down by region.
The Buffalo Chronicle has asked the Office of Cannabis Management and the Comptroller’s office for current Western New York dispensary counts and for comment on the per-store revenue gap, and will update this story with any response.
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