Today the DEA opened an expedited hearing on whether to move marijuana from Schedule I to Schedule III. If it goes through for adult-use cannabis — not yet decided, and likely to take months either way — operators in legal markets stand to gain real relief from Section 280E, the tax provision that has kept cannabis effective tax rates far above what an ordinary retailer pays.
In New York, that relief would land on a map that already looks like a patchwork. Of the state's 1,531 towns, villages, and cities, 57% have opted out of hosting adult-use retail entirely. The other 43% allow it. We pulled the full municipal record to see what actually separates the two groups — and the answer surprised us.
New York's 2021 cannabis law let every individual town, village, and city decide for itself whether to allow retail dispensaries or on-site consumption lounges — a model that's actually the norm, not the exception. Research from Ohio State's Drug Enforcement and Policy Center puts it plainly: 20 of the 24 states with adult-use cannabis give municipalities the power to say no, with only New Mexico, Rhode Island, Maryland, and Minnesota withholding that option. Michigan, which uses the same kind of opt-out mechanism, has actually opted out at a higher rate than New York — 73% of municipalities, versus New York's 57%. The result, four years after New York's law took effect, is 1,531 separate local decisions — some made in the original 2021-22 rush, some only recently finalized — that together tell you more about how New York actually thinks about cannabis than any statewide number could.
We combined the original 2021-22 municipal tracker — built by the Rockefeller Institute of Government, which spent months reading local board minutes and local laws to compile it — with the state's current opt-out list to build a single, reconciled record covering every municipality outside New York City (which, by statute, has no towns or villages and isn't part of this framework at all — its five boroughs allow dispensaries citywide, full stop). Layering in 2020 Census population and the 2024 presidential results by county, three things jumped out immediately.
First, where you are matters more than almost anything else. Long Island opts out at 86%. The Mid-Hudson region is at 71%. The Mohawk Valley, by contrast, sits at just 30% — well under half the Long Island rate. That's a 56-point spread, and it's the single largest source of variation we found in the entire dataset.
Share of towns, villages, and cities that opted out of retail dispensaries and/or on-site consumption, by county. NYC's five boroughs are gray — outside the framework entirely.
Opt-out rate by Regional Economic Development Council region. This is the one number worth remembering: Long Island opts out almost three times as often as the Mohawk Valley.
Second, type of government matters too. Villages opt out the most (63%), followed by towns (56%), with cities opting out far less (23%). That part makes intuitive sense: smaller, more parochial villages have less to gain and more to lose from hosting retail, while New York's largest cities — Buffalo, Rochester, Albany, Yonkers — are commerce centers that all allow dispensaries.
Here's the part that doesn't fit that story, though: within towns and villages specifically, bigger places are slightly more likely to opt out, not less — the opposite of what happens with cities, where bigger means less likely to opt out. So “smaller and more parochial opts out more” describes the city comparison fine, but it actually runs backward once you're inside the town/village bucket. Whatever's driving that split, it isn't simply town size.
Third — and this is the one that should have been obvious but wasn't — party politics explains none of it. We checked opt-out rates against the 2024 presidential vote, county by county. The correlation is statistically zero. Counties Trump won opted out at 54.6%; counties Harris won opted out at 57.7% — backwards from what a casual prior would guess, and not a real difference either way. Whatever is driving New York's opt-out map, it isn't red versus blue.
Two candidate explanations are worth naming, because they point in opposite directions and a market participant should know which one they're betting on.
One is that affluent downstate towns simply have more capacity to say no — established retail rents, organized residents, less fiscal pressure to chase a new revenue line. The other is that municipalities give up real money by opting out: New York's 4% local excise tax on adult-use retail sales is split 25% to the county and 75% to the host city, town, or village, and an opted-out town collects none of it. Counties under more fiscal stress may simply weigh that revenue more heavily than counties that don't need it.
Telling those two stories apart would take a different dataset — local fiscal condition, commercial vacancy, town board composition — than what's publicly available today. We're flagging the question rather than answering it.
One more thing worth knowing before you build a market model off this data: it's a snapshot, not a trend line. Of the 839 municipalities currently on the opt-out list, 836 were already at least partially opted out back in 2021-22 — only 3 are genuine new reversals. The “current” list mostly just fills in gaps in the original record rather than capturing fresh momentum either toward or away from opting out. Don't read acceleration into it that isn't there.
Which brings us back to today's hearing. New York's opt-out authority comes from Cannabis Law § 131 — a local licensing choice that has never been connected to federal scheduling status, and nothing in the rescheduling process changes that. Whatever the DEA decides, and however long the litigation that follows takes, there's no mechanism by which it dissolves a single one of New York's 879 opted-out municipalities. Towns opted out of a state license category; the federal government doesn't have a lever that reaches that decision.
What rescheduling would do, if it eventually extends Schedule III treatment to adult-use cannabis, is make the existing oases more profitable without doing anything to open the deserts. Operators already running in opted-in Long Island and Mid-Hudson towns would see real margin relief. Towns that opted out get none of it, because there's no retail activity there to benefit. If anything, that 56-point regional gap gets wider, not narrower — and the same dynamic plays out in every other state with a local opt-out option, not just New York.
The map isn't a partisan story. It's a geography story, dressed up this week in a federal news hook that, on closer inspection, doesn't actually touch it.