In a rarely seen win for the industry against regulation, Governor Kathy Hochul of New York recently scrapped a minimum wage panel planned for cannabis workers.
New York approved recreational cannabis in 2021, yet the black market remains far larger than the regulated sector, largely because of stringent rules. Lawmakers could be waking up to this challenge at last.
Last week, New York Governor Kathy Hochul, a Democrat, rejected core elements of Senate Bill 10643, which among other provisions sought to raise the minimum pay for cannabis workers in the state.
The bill, which cleared both houses of the New York State Assembly in June, would have established a triad of Cannabis Wage Board members to categorize cannabis workers by their duties and propose a wage floor to the governor’s office and the Legislature. Another section would require marijuana license applicants to disclose their complete ownership structure, any management service agreements they have entered into, and the compensation and scheduled hours for every paid position to the Cannabis Control Board. Proponents of the bill argued that the wage board would help ensure fair treatment for workers in the industry, but the average cannabis employee in New York earns about $5 more per hour than the state’s typical retail worker, according to the Albany Times Union.
After the bill advanced, the Cannabis Association of New York (CANY) told Marijuana Moment that the measure would introduce significant uncertainty for operators who are only now stabilizing after years of regulatory delays, capital constraints, and ongoing competition from the illicit market.
“It poses particular risk to the small, equity-focused businesses that form the backbone of our industry,” CANY added.
On Wednesday, Hochul signed S.B. 10643 but only if lawmakers removed the wage board and the extra reporting mandates. In a memo referenced by the Times Union, she explained: “The bill, as passed, would create uncertainty in the industry by imposing a burdensome reporting requirement on applicants, and by establishing a wage board that could raise costs for licensees and push consumers toward the illicit market.”
Hochul also enacted legislation repealing the state’s requirement that cannabis businesses sign labor peace agreements (LPAs)—contracts that bar unions from facing organized opposition during license qualification—in order to obtain a license. Instead, she instructed the Cannabis Control Board to prioritize applicants who voluntarily enter such agreements.
That development is welcome news for the state’s dispensaries, which have questioned the legality of the rule. In April 2025, Hybrid NYC, the operator of the Gotham dispensary in Brooklyn, took legal action against the state, contending that the LPA mandate is preempted by the National Labor Relations Act, which governs private-sector labor relations. (A federal judge denied the state’s motion to dismiss the suit in December 2025, and the case remained active when Hochul repealed the law.)
Across the country, similar disputes are unfolding. In August, a federal judge nullified New Jersey’s LPA requirement for its cannabis industry, ruling it was preempted by federal law. Oregon’s mandate was invalidated on the same grounds in 2025. Meanwhile, Virginia imposed a comparable mandate to New York’s. In public testimony before Virginia’s Senate Rehabilitation and Social Services Committee earlier this year, Geoffrey Lawrence, research director at Reason Foundation (the nonprofit behind Reason), warned lawmakers that the mandate would conflict with federal law. A separate challenge is currently underway in California.
The continued prominence of the illicit marijuana market in New York demonstrates that many buyers and sellers still prefer a looser system. Rolling back the LPA requirement and blocking a cannabis wage board won’t entirely fix the regulatory landscape, but they represent encouraging signs that the state may finally be recognizing that excessive red tape is hindering the legitimate cannabis market.
