Final deal struck to legalize marijuana in New York

ALBANY – State leaders have finalized a deal to legalize recreational marijuana, with long-awaited legislation laying out the details appearing Saturday night. Lawmakers had previously said the bill could be voted on as soon as this week.

Gov. Andrew M. Cuomo, Senate Majority Leader Andrea Stewart-Cousins and Assembly Speaker Carl Heastie announced the agreement, which will establish a new state Office of Cannabis Management to oversee a regulatory system for medical and adult-use marijuana as well as cannabinoid hemp. Producers, distributors, retailers, and other actors in the cannabis market will be licensed according to the system laid out in the bill, and a “social and economic equity program” will assist “individuals disproportionately impacted by cannabis enforcement that want to participate in the industry,” according to a release from the governor’s office.

The cannabis industry is projected to deliver $350 million annually in tax revenues and 30,000 to 60,000 new jobs statewide, the release said.

Dubbed the New York State Cannabis/Marijuana Regulation & Taxation Act, the bill will create the Office of Cannabis Management, which will be governed by a five-member board – three members appointed by the governor and one appointment by each legislative house. OCM will be “an independent office operating as part of the New York State Liquor Authority,” the release said.

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.

Licensed growers and processors would be barred from also owning retail stores. Under the social and economic equity program, a goal of 50 percent of licenses would go to a minority- or woman-owned business enterprise or distressed farmers or service-disabled veterans.

The bill proposes a new cannabis tax structure that would replace a weight-based tax with a tax per milligram of THC – the active ingredient in cannabis products – 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 percent state excise tax. The local excise tax rate would be 4 percent of the retail price. Counties would receive 25 percent of the local retail tax revenue and 75 percent would go to the municipality.

That revenue split has drawn criticism from some quarters: Marc Molinaro, Dutchess County executive and president of the New York State County Executives Association, said last week – as details of the agreement were released – that it “defies logic in that the bulk of the revenue goes to the municipality that won’t bear the brunt of the cost.” County leaders were hoping to see the breakdown of local taxes readjusted so that counties receive more of the money raised.

County leaders “have not been involved in this last round of negotiations,” Molinaro said. “We have been in the past, and I’d offer to you that we have been in the past because the executive draws us in. The dynamic in Albany right now just does not seem to be the normal way a budget is negotiated.”

Some of the state’s 9 percent sales tax would make its way back to counties, he acknowledged, such as from a proposal mental health fund.

“But if you believe the executive branch is going to equitably distribute those dollars, then I have a bridge to name after you,” he said.

All cannabis taxes would be deposited in a dedicated revenue fund. After deducting costs to administer the program and implement the law, the remainder would go to education (40 percent, a community grants reinvestment fund (40 percent) and a drug treatment and public education fund (20 percent).

Cities, towns, and villages can opt out of allowing adult-use cannabis retail dispensaries or on-site consumption licenses by passing a local law by the end of the year or nine months after the effective date of the legislation. They cannot, however, opt out legalizing adult-use marijuana.

The state Department of Health will work with colleges and universities to conduct a study designed to evaluate methodologies and technologies for the detection of cannabis-impaired driving. The agency may create and implement rules and regulations to approve and certify a test for the presence of cannabis in drivers.

Outside the home, people will be able to possess up to 3 ounces of cannabis and 24 grams of cannabis concentrate. Inside the home, cannabis must be kept in a secure location away from children. Adult New Yorkers will be allowed to home-grow three mature plants and three immature plants , with an upper limit of six mature plants and six immature plants maximum per household.

The legislation also creates automatic expungement or resentencing for anyone with a previous marijuana conviction that would now be legal under the law.

“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,” Cuomo said in a statement. “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.”

“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,” Senate Majority Leader Andrea Stewart-Cousins 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,” Heastie said. “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.”

The bill was negotiated by the Executive Chamber, state Sen. Liz Krueger and Assembly Majority Leader Crystal Peoples-Stokes. In past efforts to legalize marijuana for recreational use, Cuomo has included it as part of his executive budget proposal, which gives the governor increased negotiating leverage. This year, as the governor is beset by multiple scandals and calls for his resignation, the deal has been negotiated separately from the budget, and Cuomo appears to have given ground on some key issues to the Legislature.

This is the third straight year Cuomo has attempted to negotiate a deal to legalize marijuana, and the talks have been behind closed doors (or the virtual equivalent), with participants staying quiet about progress.

Smart Approaches to Marijuana, the largest anti-legalization advocacy group in the U.S., is rallying supporters to call state senators upstate and on Long Island – some of the remaining bastions of Republican influence – to vote against the legislation.

“Once the government says something is OK, once something is approved by the state, that takes on a life of its own,” said Kevin Sabet, the president and co-founder of the group and a drug policy advisor in the Obama administration. “And I just worry that once again we’re falling into the trap of essentially addiction for profit, which is what happened with the opioid crisis, the tobacco crisis, and others.”

Capitol Bureau