Cannabis companies in New York are advocating for adjustments to state tax law that could significantly ease their financial burden. The main issue is a mismatch between the tax collection schedule and the time it takes distributors to receive payments from retailers.
Currently, distributors grant retailers 30 days to pay their taxes, while operators are required to file and pay their taxes within 20 days after each quarter ends. This situation forces operators to cover about 35% of their sales in taxes upfront for each quarter, according to Nicholas Guarino, CEO of cannabis producer Jaunty. This discrepancy can lead to substantial cash flow issues, causing distributors to front tens of thousands of dollars each quarter.
Guarino explained that while the issue might seem minor at first glance, it can translate into hundreds of thousands of dollars per operator in the state. He emphasized that fixing this tax misalignment could have significant financial benefits for cannabis businesses across New York. Jaunty, based in California, also operates a hub in Troy, New York.
