The implementation of New York's new cannabis law is underway across the state. But some businesses are facing tax challenges, and some communities are opting out entirely. 

Retail cannabis locations will soon be a common site in some New York communities. But as legalization of marijuana and the subsequent marketplace rolled out, businesses will still face some hurdles in selling a product that is still illegal on the federal level. Rochester state Sen. Jeremy Cooney said this can make it harder for an equal playing field in the marijuana economy. 

"We know that cannabis or marijuana is still a schedule one drug, it's still a controlled substance," Cooney said. "So that leads to a lot of challenges and barriers to entry in this recreational marketplace."

The cannabis industry is expected to eventually become a multi-billion dollar sector of the economy, and state lawmakers, as well as policymakers, are trying to devise a system that does not squeeze out smaller operations. 

Cooney is backing legislation meant to address one area of the cannabis industry: Allowing companies in the sector to deduct business expenses — something the federal Internal Revenue Service doesn't allow. 

"Whether you're doing a cannabis related business, or whether you're working on video gaming or advanced manufacturing, it's providing the same tax benefit for doing business and creating jobs in New York," Cooney said. 

Meanwhile, more than 400 local governments in New York have approved measures to opt out of either allowing cannabis consumption sites — or selling the cannabis products altogether. 

"Other states have done this as well where initially not a lot of municipalities opt in and then that expands over time as they see the experience of their neighbors with legalized marijuana," said Heather Trela, a fellow at the Rockefeller Institute, an Albany-based think tank. 

Trela has compiled a database tracking how municipalities in New York have responded to the coming cannabis industry, and whether it would be welcome in their communities. The work has involved reviewing meeting minutes of local governments as well as calling local officials themselves. 

"It's good to know what you can look forward to in terms of economic development in your area," Trela said. If there are no dispensaries, you would probably be more interested in delivery as an option in New York state."

The database will be updated as more measures are considered in the coming days.