Governor, legislative leaders reach deal to legalize adult-use cannabis
Tax collection projected to reach $350 million annually and potentially create 30,000 to 60,000 jobs
Press Release, Gov. Andrew Cuomo’s Office
Governor Andrew M. Cuomo, Senate Majority Leader Andrea Stewart-Cousins and Assembly Speaker Carl Heastie today announced an agreement on legislation (S.854-A/A.1248-A) to legalize adult-use cannabis.
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.
“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,” Governor Cuomo said. “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.”
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.
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.
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 percent state excise tax. The local excise tax rate would be 4 percent of the retail price. Counties would receive 25% of the local retail tax revenue and 75 percent would go to the municipality.
The agreement would permit the sale of hemp flower in the cannabinoid hemp program, and allow for smokeable 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 Percent to Education
- 40 Percent to Community Grants Reinvestment Fund
- 20 Percent to Drug Treatment and Public Education Fund
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 December 31, 2021 or nine months after the effective date of the legislation. They cannot opt-out of adult-use legalization.
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 6 months:
- 3 mature plants and 3 immature plants for adults over 21
- 6 mature plants and 6 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 that 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.
“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. “Thank you to the Senate sponsor, Senator 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.”