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Long Island municipalities have reaped nearly $3.5 million in 2024 from the sale of recreational cannabis, with Babylon Town collecting $2.6 million and $871,000 going to Suffolk County, data from the Suffolk Comptroller’s Office shows.
The retail cannabis revenue comes from the first state-licensed dispensaries to open on Long Island. The first three were in East Farmingdale. Strain Stars opened in July 2023 and Happy Days began operations in January. A third shop, Planet Nugg, opened in September. The county recorded three payments this year — in July, August and November — and is responsible for distributing Babylon Town’s share of the proceeds.
Municipalities where the dispensaries are located are entitled to 4% of the tax revenue, under a 2021 state law that legalized recreational cannabis sales. Of that local tax, Babylon Town takes 3%, while the county collects 1%. The revenue is reported quarterly, said Ryan Cleveland, a spokesman for the state department of taxation and finance. John Kennedy, the Suffolk Comptroller, said his office didn’t receive a breakdown of revenue by individual stores.
New York legalized recreational marijuana sales in 2021, but it is up to local municipalities to decide whether to allow retail cannabis dispensaries in their communities.
WHAT NEWSDAY FOUND
Nearly $3.5 million from recreational cannabis sales is headed to Long Island municipalities. Babylon Town collected more than $2.6 million, while Suffolk County’s share was $871,000, according to figures from the county comptroller’s office.Municipal officials in other towns are preparing for big hauls in 2025 when more stores are expected to open. Officials are weighing whether to add the money to their general funds or spend it on preventive services.In Babylon, officials want to apply the funding to build a second chemical dependency treatment facility.
Babylon, Brookhaven, Riverhead and Southampton are the only Long Island towns to allow recreational marijuana sales. Babylon now has five recreational businesses in operation, and there are seven more in the pipeline awaiting town approvals, officials said. Southampton Town’s first dispensary opened in October. Riverhead’s first two dispensaries opened in November. Brookhaven expects two recreational marijuana businesses to open in the new year.
Babylon officials expect revenue to dip in 2025 as competition mounts from farther east.
“I didn’t think we would get as much as we’ve gotten,” said Town Supervisor Rich Schaffer, who initially opposed allowing recreational cannabis sales in the town. “We were getting everybody from Nassau and everybody from the East End of Suffolk. . . . But economics tells you once there are other locations, people are going to go to other locations if they’re closer to them.”
Some municipal leaders are embracing the new revenue stream as a much-needed funding source for key town initiatives. The funding will come as a reprieve, officials said, especially after a year in which nine of Long Island’s 13 towns pierced the tax cap.
There are no limits on how municipalities can spend the tax revenue. Babylon plans to apply the cannabis revenue toward the construction and operation of a second chemical dependency treatment facility. The town already operates the Beacon Family Wellness Center in North Babylon. Revenue will also fund counselors in local schools to address mental health and substance abuse issues, Schaffer said.
“This revenue is not going toward filling a budget hole or anything like that,” Schaffer said. “My attitude is, if we’re going to get it, I would want to use it to provide services and place more attention on the issues of addiction and mental health.”
Spending plans
When asked how Suffolk will spend its share of the cannabis revenue, spokesman Michael Martino said only that the money will be added to the county’s general fund.
With the opening of Strain Stars’ second Long Island store in Riverhead, town officials are optimistic of a big payday.
“We’re hoping that it supplies Riverhead with some of the biggest amounts of tax money,” Riverhead Town Supervisor Tim Hubbard said in an interview.
Hubbard expects town officials to weigh ideas for spending the revenue during the upcoming legislative session. Hubbard’s punch list includes improvements to town recreational facilities, including a $70,000 repair to a widely used boat ramp at Reeves Beach in Riverhead.
Other ideas include repaving a parking lot at Bayberry Park in Wading River, Hubbard said.
“We have to get the money first,” he said. “We can’t spend it before we get it, but to have a plan in place I think is a great idea.”
Hubbard said the owners of Strain Stars have pledged to be “good community partners” and may provide donations to the town’s Community Awareness Program, an antidrug initiative aimed at youth, and to the town police department, to provide drug recognition training.
Southampton Town Supervisor Maria Moore said the town has yet to outline a plan for spending the tax revenue. She said the town board will discuss ideas next year.
Brookhaven Supervisor Dan Panico said he predicts the town’s share of recreational cannabis revenue to be “on par” with Babylon’s.
Town officials have not discussed how to spend the money, Panico said, adding the funds likely would be used wherever they are needed.
“I haven’t discussed that with the town board because we haven’t seen dollar one to begin with,” Panico said. “It’ll be part of the overall fiscal picture of the town going forward. If a program [such as] a new spray pad park [or it could be] a project that the town would undertake, any sales tax revenue in the big picture would offset the cost.”
Budget boost
The cannabis funds will be welcome in a tough economic environment for local governments, Panico said.
“The fixed costs of local government now routinely are exceeding the 2% tax cap and that’s a real issue,” he said.
Unlike Babylon, Brookhaven is not likely to fund a substance abuse treatment facility with the tax revenue, Panico said. “Those type of services are not germane to town government.”
Yaphank civic president Chad Trusnovec disagrees with Panico’s plan for the money.
“You should be able to balance the budget without reaching out to things like that,” he said of cannabis tax revenue.
Brett Houdek, president of the Medford Civic Association, had opposed the town’s decision to approve a cannabis store in Medford.
“I think it’s a paltry revenue for the harm it’s going to do to the community,” he said. “It’s something the town should not encourage. The future harm is not worth a million dollars.”
Lori-Ann Novello, executive director of Babylon Cares, a community organization that aims to reduce substance abuse, said her group approves of the Town of Babylon’s approach. The proposed center will help those in recovery secure jobs.
“This facility will close the gap between addiction treatment, recovery, and prevention,” she said. “This will strengthen efforts to reduce recidivism while ensuring prevention remains central.”
Town officials have reported few issues with the dispensaries. In Babylon, the town reports that it hasn’t received any complaints about any of its five recreational marijuana businesses. In Riverhead, two dispensaries each received one complaint from residents about illegal signs and/or banners, town attorney Erik Howard said.
Schaffer, who heads the Suffolk Supervisors Association, said he knows of two town supervisors who, because of the revenue and lack of problems thus far, are considering allowing recreational sales.
“Two towns have spoken to our staff, just to get an idea of what’s involved,” he said.
The additional revenue for the town has been “terrific,” Schaffer said, and the second treatment center might not have been possible without it.
“I’m very proud of what we’ve done with it,” Schaffer said. “We’ve taken something I didn’t agree with and turned it into a positive that’s helping change lives.”
With Carl MacGowan, Tara Smith and Joe Werkmeister
“}]] Babylon Town collected $2.6 million so far, while Suffolk’s cut exceeded $871,000, according to county data. Read More
