Cuomo & legislative leaders announce agreement to legalize adult-use cannabis

Legislation (S.854-A/A.1248-A) would establish Office of Cannabis Management; expand New York's existing medical marijuana program; establish a licensing system; create social and economic equity program encouraging individuals disproportionately impacted by cannabis enforcement to participate in industry

Tax collection projected to reach $350 million annually and potentially create 30,000 to 60,000 jobs

Gov. Andrew Cuomo, Senate Majority Leader Andrea Stewart-Cousins and Assembly Speaker Carl Heastie on Saturday announced an agreement on legislation (S.854-A/A.1248-A) to legalize adult-use cannabis.

Cuomo’s team stated, “The bill would establish the Office of Cannabis Management to implement a comprehensive regulatory framework that would cover medical, adult-use and cannabinoid hemp. The bill would also expand New York state's existing medical marijuana and cannabinoid hemp programs. The legislation provides licensing for marijuana producers, distributors, retailers and other actors in the cannabis market, and creates a social and economic equity program to assist individuals disproportionately impacted by cannabis enforcement that want to participate in the industry.

“The development of an adult-use cannabis industry in New York state under this legislation has the potential to create significant economic opportunities for New Yorkers and the state. Tax collections from the adult-use cannabis program are projected to reach $350 million annually. Additionally, there is the potential for this new industry to create 30,000 to 60,000 new jobs across the state.”

Cuomo said, "For generations, too many New Yorkers have been unfairly penalized for the use and sale of adult-use cannabis, arbitrarily arrested and jailed with harsh mandatory minimum sentences. After years of tireless advocacy and extraordinarily hard work, that time is coming to an end in New York state. Legalizing adult-use cannabis isn't just about creating a new market that will provide jobs and benefit the economy – it's also about justice for long-marginalized communities and ensuring those who've been unfairly penalized in the past will now get a chance to benefit. I look forward to signing this legislation into law."

Stewart-Cousins said, "There were many important aspects of this legislation that needed to be addressed correctly – especially the racial disparities that have plagued our state's response to marijuana use and distribution as well as ensuring public safety – and I am proud we have reached the finish line. Thank you to the Senate sponsor, Sen. Liz Krueger, for her tireless efforts to get this legislation advanced and done right. I am glad we are stepping up to give New Yorkers the fair and equitable adult-use marijuana market they deserve."

Heastie said, "When we decriminalized adult use of marijuana in 2019, the Assembly majority knew that legalization had to be done the right way – in a way that would help not harm our communities that have been devastated by the state's drug laws. This bill will do that and I thank Majority Leader Crystal Peoples-Stokes for her tireless efforts.

“The MRTA does not just legalize the adult use of marijuana, but it rights decades of disproportionately targeting people of color, ensures they are included in the legal marijuana industry, and reinvests in education and in communities that have been harmed."

Peoples-Stokes said, "For years, I have been working toward legalizing marijuana in a way that ensured a safe product, that we would be able to invest in the lives of people who suffered as a result of mass incarcerations, and to allow us to invest in our communities. I have been committed to getting this done correctly and justly. I believe that the MRTA does all of those things."

The New York State Cannabis/Marijuana Regulation & Taxation Act contains the following provisions:

•Establish the Office of Cannabis Management: The Office of Cannabis Management would be charged with enforcing a comprehensive regulatory framework governing medical, adult-use cannabinoid hemp. It would be governed by a five-member board, with three members appointed by the governor and one appointment by each house. OCM would be an independent office operating as part of the New York State Liquor Authority.

•Medical Cannabis: The agreement would allow people with a larger list of medical conditions to access medical marijuana, increase the number of caregivers allowed per patient, and permit home cultivation of medical cannabis for patients.

•Adult-Use Cannabis: The agreement would create a two-tier licensing structure that would allow for a large range of producers by separating those growers and processors from also owning retail stores. The legislation creates licenses for producers and distributors, among other entities, and the legislation will implement strict quality control, public health and consumer protections. A social and economic equity program would facilitate individuals disproportionally impacted by cannabis enforcement, including creating a goal of 50% of licenses to go to a minority- or woman-owned business enterprise, or distressed farmers or service-disabled veterans to encourage participation in the industry.

The bill proposes a new cannabis tax structure that would replace a weight-based tax with a tax per mg of THC at the distributor level with different rates depending on final product type. The wholesale excise tax would be moved to the retail level with a 9% state excise tax. The local excise tax rate would be 4% of the retail price. Counties would receive 25% of the local retail tax revenue and 75% would go to the municipality.

•Cannabinoid Hemp: The agreement would permit the sale of hemp flower in the cannabinoid hemp program, and allow for smokable forms only when adult use retail stores are operational.

•Adult-Use Cannabis Tax Revenue: All cannabis taxes would be deposited in the New York state cannabis revenue fund. Revenue covers reasonable costs to administer the program and implement the law. The remaining funding would be split three ways:

√ 40% to education

√ 40% to community grants reinvestment fund

√ 20% to drug treatment and public education fund

•Municipal Opt-Out: Cities, towns and villages may opt-out of allowing adult-use cannabis retail dispensaries or on-site consumption licenses by passing a local law by Dec. 31, 2021, or nine months after the effective date of the legislation. They cannot opt-out of adult-use legalization.

•Traffic Safety: The New York State Department of Health will work with institutions of higher education to conduct a controlled research study designed to evaluate methodologies and technologies for the detection of cannabis-impaired driving. After completion of the research study, DOH may create and implement rules and regulations to approve and certify a test for the presence of cannabis in drivers.

The legislation includes additional funding for drug recognition experts and law enforcement to ensure safe roadways.

The use of cannabis by drivers will remain prohibited.

•Personal Possession and Home Cultivation: The following conditions apply to growing cannabis at home and personal possession of cannabis outside the home:

√ Personal possession outside of the home: up to 3 ounces cannabis and 24 grams of cannabis concentrate

√ Home possession: Amending limits of what is permitted in the home, which must be kept in a secure location away from children

√ Home grow: permitted under the bill subject to possession limits in 18 months for adult recreational use and subject to regulations of the medical program being promulgated no sooner than six months:

Three mature plants and three immature plants for adults over 21

Six mature plants and six immature plants maximum per household

•Criminal Justice and Record Expungement: The cannabis penalty framework would be restructured to avoid the criminalization seen in prohibition. Reduced penalties would be implemented for possession and sale.

√ Creates automatic expungement or resentencing for anyone with a previous marijuana conviction that would now be legal under the law and provides necessary funding.

√ Adds cannabis to the Clean Indoor Air Act, which establishes a baseline on where cannabis can be smoked or vaped.

√ Municipalities and local governments are permitted to make laws that are more restrictive than the CIAA. Contains various provisions to ensure cannabis is treated as a lawful substance and to prevent discriminatory enforcement.

•Protections for the Use of Cannabis and Workplace Safety: Unlawful discrimination would be prohibited and workplace safety protections would be implemented.

•Public Health and Education Campaign: OCM will establish a robust public health and education campaign and work with neighboring states and associations to coordinate actions and policies to protect regional health and safety.

Response

Allan Gandelman, president of New York Cannabis Growers & Processors Association, stated, “This is a historic moment for the state of New York, and one that will bring with it good jobs, investment, and cutting-edge entrepreneurial opportunity through the creation of an entirely new sustainable and equitable industry. Cannabis legalization will jumpstart our state’s economic recovery and serve as a real investment in a forward-looking culture that puts New York cannabis consumers, small business owners, farmers and cultivators first.

“We’re grateful to Gov. Cuomo, Majority Leader Stewart-Cousins, Speaker Heastie, Sen. Krueger and Assembly Majority Leader Peoples-Stokes’ for their leadership in negotiating and finalizing this critical legislation ending prohibition and opening the doors to cannabis legalization in New York. We look forward to the prompt passage of this legislation that will ensure that our state’s craft farmers and cultivators remain central to the economic development, revenues and prosperity generated by this budding industry.”

On Tuesday, Senate Republican Leader Rob Ortt said, “This deal legalizing marijuana is the result of closed-door discussions between leaders of one political party and a governor who is engulfed in scandal. The outcome of these partisan negotiations is a deeply flawed piece of legislation that will hurt the health and safety of New Yorkers.

“This backroom deal rejected input from key stakeholders, necessary to address the many flaws in this legislation. The majority ignored our law enforcement officers and district attorneys, who have raised serious concerns about the impact this legislation will have on our communities. Further, workplace safety concerns were largely disregarded, putting people at risk and making New York more hostile for businesses. And most importantly, the concerns expressed by public health officials statewide went ignored.

“During the health crisis of our lifetime, we should know better than to dismiss the concerns of our medical experts. I cannot support this deeply flawed legislation due to the way it was developed, and the negative impact it will have on the health and safety of New Yorkers.”