New York Lawmakers Eye Liquor Stores for Low-THC Cannabis Drinks

New York liquor stores could soon sell cannabis-infused beverages under legislation introduced in Albany that would create a new permit category for low-dose THC drinks.

The bill would limit participating retailers to products containing no more than 5 milligrams of THC per serving and impose an additional 13% tax on retail sales, adding to the state's existing cannabis tax structure.

Liquor store owners would need to obtain a separate permit to carry the products, according to the proposal. The move comes as New York's regulated cannabis market continues to struggle with slow rollout and persistent competition from unlicensed sellers.

The Beverage Calculation

The 5mg THC threshold aligns with serving sizes in other states that have established cannabis beverage markets. Colorado and California both use similar limits for products marketed as single servings, though enforcement and labeling requirements vary.

But the additional 13% tax could make New York's cannabis beverages among the most heavily taxed in the nation. The state already imposes a potency-based tax on THC products plus a 13% excise tax and local sales taxes. This new retail tax would stack on top of those existing levies.

Industry analysts have warned that New York's high tax burden is already driving consumers to cheaper illicit options. Adding another layer for beverages could price legal products out of reach for many consumers.

Why Liquor Stores

The proposal reflects growing interest in treating low-dose cannabis beverages more like alcohol than traditional cannabis products. Several states are exploring similar frameworks as the beverage category gains market share.

Liquor stores already have age verification systems, security protocols, and experience with regulated intoxicants. They also represent thousands of potential retail locations across New York, far more than the limited number of licensed cannabis dispensaries currently operating.

Yet the approach raises questions about market fairness. Licensed cannabis retailers have invested heavily in compliance and faced significant delays in getting operational. Allowing liquor stores to sell cannabis products—even low-dose beverages—could siphon revenue from struggling dispensaries.

Market Implications

Cannabis beverages remain a small but fast-growing segment nationally. They accounted for roughly 2% of total cannabis sales in 2023, but growth rates are outpacing most other product categories.

New York's adult-use market launched in late 2022 but has been plagued by limited retail locations and regulatory bottlenecks. The state has issued fewer than 150 retail licenses despite receiving thousands of applications. Meanwhile, unlicensed shops continue to operate openly in New York City and other urban areas.

Adding liquor stores to the distribution network could expand access significantly. New York has approximately 3,000 licensed liquor stores statewide, compared to just over 100 operational cannabis dispensaries.

What's Next

The bill has not yet been assigned to committee, and its prospects remain unclear. Similar proposals to expand cannabis sales beyond dedicated dispensaries have faced resistance from licensed operators who argue they deserve protection after investing in the regulated market.

The legislation also arrives as New York lawmakers consider broader reforms to the state's cannabis program, including potential changes to the tax structure and licensing process. Governor Kathy Hochul has indicated support for adjustments to help legal operators compete with illicit sellers.

Timing for any action likely extends into the spring legislative session. New York's budget process, which concludes in early April, could provide a vehicle for cannabis policy changes if lawmakers and the governor reach agreement on reforms.

This article is based on original reporting by ganjapreneur.com.