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Gov. Kathy Hochul’s executive budget released Tuesday proposes repealing a state “potency tax” on marijuana products that industry stakeholders said has deterred legal retail sales and driven more consumers to buy their products from unlicensed vendors.
Hochul’s proposal, which follows efforts in the Legislature to repeal the potency tax, would replace it with a wholesale excise tax of 9 percent, which would be charged to consumers in addition to the state and local retail excise taxes of 9 and 4 percent, respectively.
State Sen. Jeremy Cooney, a Rochester Democrat, sponsored legislation last year that would have repealed the potency tax with a flat-rate excise tax, which he noted would be similar to how alcohol products that vary in potency are taxed.
Cooney had warned last year that a flourishing illicit market for cannabis would be “a public safety and public health disaster.” Unregulated products stand a greater chance of being contaminated with unknown additives, Cooney said, a direct refutation of what the legalization law set out to accomplish.
“We have to find that balance at the state Legislature between inaction and also intervening when we need to be advocates for this marketplace,” Cooney said during a news conference last year.
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