New York’s cannabis legalization effort officially began Tuesday when New York Gov. Andrew Cuomo outlined legalization as a priority for his administration’s first 100 days and called on the legislature to pass sweeping reforms.
Cuomo had a little something for everyone in laying out a massive plan — from new plans to combat poverty to finding more dollars for transportation — for the legislature this year, including the legalization of adult-use cannabis. In his annual “State of the State” speech, Cuomo said that Democratic control of the Senate, Assembly and governorship for the first time in four decades set the stage for lawmakers to take on big problems and solve them.
Still, big questions remain around cannabis provisions demanded by New York’s Democratic leadership. Namely, there is likely to be debate over whether Cuomo’s criminal justice-related proposals go far enough, including those to seal or expunge past cannabis convictions and to distribute tax revenue to communities affected by the selective enforcement of cannabis laws on minority communities. And Cuomo’s budget director told an Albany Times-Union reporter that the plan explicitly excluded home grown cannabis, a departure from the approach taken by most other states that have legalized adult use.
The governor’s proposal in his budget, which was also released Tuesday, laid out an age minimum of 21 for cannabis sales, set up three new proposed taxes, and called on the legislature to pass his Cannabis Regulation and Taxation Act. That act, according to the governor’s budget, would set up a new Office of Cannabis Management to oversee all aspects of cannabis — including hemp and medical cannabis — to regulate the new industry. The proposal would allow localities the ability to opt-out of legal cannabis sales and set up a “three-tier” system of licensing whereby producer, distributor and retailer licenses will be created, similar to New York and most states’ alcohol system.
The governor’s proposal appears to try to avoid domination by larger cannabis companies, allowing space for smaller players. Producers cannot also own retail shops, according to the budget plan, and the state will cap the number of both producers and retailers “to guard against a market collapse, encourage equity through craft growers and cooperatives.”
The state would collect $83 million in tax revenue per year starting in fiscal year 2021, according to the budget plan.
The ability for communities to opt out of legalization may also be an early point of contention with the legislature. Brooklyn Senator Julia Salazar tweeted, “A marijuana legalization proposal that allows counties & large cities to ‘opt-out’ of the regulations that would empower directly impacted communities is unacceptable,” she said. “New Yorkers have been enormously harmed by criminalization. Alleviating that harm must be our top priority.”
And Senator Liz Krueger, the primary sponsor of previous cannabis-related legislation in the state, the Marihuana Regulation and Taxation Act, didn’t come out and endorse the governor’s plan. She said she looked forward to examining the governor’s proposal in more depth. “As always, the devil is in the details, and I look forward to a close examination of his proposal,” Krueger said in an email to Cannabis Wire. Other legislators also said they wanted to examine the plan in more detail before weighing in.
Among the details laid out in the governor’s executive budget, which is expected to be amended and passed by the legislature by the end of March:
- Three taxes on cannabis, all before retail sales occur: 1) $1 per dry weight gram of cannabis flower and $0.25 per dry weight gram of cannabis trim when the cannabis crop is cultivated 2) The sale by wholesaler to a retail dispensary is taxed at 20% 3) An additional tax at the wholesale level of 2% that is given to the county where the retailer is located.
- The creation of the Office of Cannabis Management, which would issue regulations and control state revenue related to cannabis. It would give the governor’s administration a big say in the allocation of revenue because the OCM is under the administration’s Budget Office. The OCM would also deliver a program that seals past cannabis convictions, give “social equity licensing opportunities,” and offer mentorship and assistance for small business owners. The office would “ensure meaningful and sustained participation by communities disproportionately harmed by cannabis prohibition.”
- The cannabis office would also be responsible for public health campaigns and working with law enforcement to combat impaired driving.
Tax dollars would go toward the “administration of the regulated cannabis program, data gathering, monitoring and reporting, the governor’s traffic safety committee, small business development and loans, substance abuse, harm reduction and mental health treatment and prevention, public health education and intervention, research on cannabis uses and applications, program evaluation and improvements,” the budget document says.
Cuomo said it’s up to lawmakers to push quickly on legalization and other priorities.
“We are in control,” he told the theater full of Democratic lawmakers and other politicos at The Egg Center for the Performing Arts. “There is no one else.”
The governor also reiterated his newfound stance that Latino and African American communities should benefit from the advent of legalization and the resulting industry. “Let’s stop the disproportionate impact on communities of color,” he said. “Let’s create an industry that empowers the poor communities that paid the price, and not the rich corporations that come in to make a profit. It creates good union jobs that we need.”