Adult-use marijuana legalization in New York under Gov. Andrew Cuomo’s proposal would net the state close to $800 million in tax revenues and create more than 50,000 jobs by 2027, according to estimates in a new report by a major industry player. Under the Legislature’s proposal, the report’s authors, James Parrot and Michele Mattingly, project tax revenues by 2027 of $469 million.

The report Economic and Revenue Impact of Marijuana Legalization in NYS – A Fresh Look – was published by the Center of NYC Affairs at The New School and funded by Scotts Miracle-Gro, a fertilizer manufacturer hoping to provide its product to commercial marijuana cultivation operations throughout the state. Parrot and Mattingly contend that legalizing cannabis in New York would go a long way toward plugging the holes in the state’s budget precipitated by the coronavirus pandemic.

“As New York works to develop new revenue streams to address critical budget needs and repair the economy in the wake of the COVID-19 crisis, legalization provides a substantial opportunity to create new and diverse small businesses, quality jobs and strengthen rural and urban economies and communities,” Parrott said.

Parrot and Mattingly think it likely New York will legalize adult-use marijuana this year, given Gov. Cuomo’s and the Democratic-controlled legislature’s commitment to the measure. In recent times, each has indicated a willingness to compromise, with previous efforts to legalize cannabis faltering over disagreements on how to tax sales and allocate revenues. The fact neighboring New Jersey voted to legalize adult-use marijuana through a ballot measure and is set to finally pass enabling legislation makes it all the more important New York’s executive branch and legislature find common ground on the measure, or risk losing out on cannabis tax dollars.

Assuming New York legalized this year, Parrot and Mattingly estimate there would be $526 million of retail marijuana sales in fiscal year 2023, with this rising to $2.6 billion by 2027. This assumes the legal market’s share of marijuana sales in New York would rise from 14 percent to 62 percent over that four-year period.

Parrot and Mattingly extrapolate that $2.6 billion in retail sales by 2027 for a product grown and processed in New York would translate to 50,806 new jobs, $2.2 billion in employee compensation, $4.7 billion in value added to the state’s economy and $6.1 billion in total economic output.

“Legalization will create the opportunity to expand the fledgling medical marijuana industry and, to some extent, develop an entirely new legal adult-use cannabis industry,” Parrott and Mattingly said.

Gov. Cuomo’s proposed budget for fiscal year 2022 includes provisions to legalize marijuana and introduce social equity measures such as granting priority for cannabis business licenses to individuals from communities most harmed by prohibition, and zero or low interest loans for small businesses. Some Democratic lawmakers say these social equity provisions don’t go far enough and are calling for grant funding and other direct sources of revenue to marginalized communities.

Parrot and Mattingly’s analysis corresponds relatively closely to a similar 2019 analysis by the Rockefeller Institute of Government, which gave a low-end estimate of $4.1 billion and high-end estimate of $8.4 billion of economic output in New York following marijuana legalization.