State Legislature passes legislation for adults to use recreational marijuana

‘This landmark legislation provides justice for long-marginalized communities, embraces a new industry that will grow the economy, and establishes substantial safety guards for the public.’ – Gov. Cuomo

The State Senate and the State Assembly both voted in favor of legalizing recreational marijuana on Tuesday. Gov. Andrew Cuomo issued a statement at 10:59 p.m., congratulating the Legislature for passing the legislation.

“Tonight, the New York State Legislature took the first step in a major leap forward for the Empire State by passing legislation to legalize adult-use cannabis. I thank Senate Majority Leader Andrea Stewart-Cousins, Assembly Speaker Carl Heastie, and the many legislators who worked tirelessly on this issue for securing passage of this historic legislation.

“For too long the prohibition of cannabis disproportionately targeted communities of color with harsh prison sentences and after years of hard work, this landmark legislation provides justice for long-marginalized communities, embraces a new industry that will grow the economy, and establishes substantial safety guards for the public.

“New York has a storied history of being the progressive capital of the nation, and this important legislation will once again carry on that legacy. I look forward to signing this legislation into law.”

The State Assembly passed the “Marijuana Regulation and Taxation Act” with a 100-49 vote, legalizing the adult use of marijuana in New York for individuals 21 years of age. It also establishes the Office of Cannabis Management and the Cannabis Control Board to regulate the cannabis industry

“Passage of this bill will mean not just legalizing marijuana, but investing in education and our communities, and bring to an end decades of disproportionately targeting people of color under state and federal drug laws,” said Assembly Speaker Carl Heastie. “The legislation would use revenue from adult-use marijuana to invest in education and communities that have been disproportionately targeted by state and federal drug laws. New York will join 14 states, two territories and the District of Columbia in legalizing the adult use of marijuana. This will create jobs across all aspects of the industry from agriculture to retail.”

Taxation

New York’s Marijuana Regulation and Taxation Act establishes the following taxes on adult-use marijuana:

A tax on the sale from a wholesaler to a dispensary, based on the milligrams of THC in the product. The tax rate would be based on the type of product, as follows:

• Edibles would be taxed at a rate of $0.03 per milligram of THC;
• Concentrates would be taxed at $0.008 per of milligram of THC; and
• Cannabis flower would be taxed at rate of $0.005 per milligram of THC;

A 13 percent excise tax on cannabis with portions going to municipalities:

• Taxes on the sale by a dispensary to the consumer at a rate of 9 percent of the sales price will go to the Cannabis Revenue Fund; and
• Taxes on the sale by a dispensary to the consumer at a rate of 4 percent of the sale price, which would be split between the county of sale (1 percent) and the municipality of sale (3 percent).

The legislation also establishes the New York State Cannabis Revenue Fund which will be used to fund OCM and cover the costs of state agencies to apply and adapt to the MRTA. After those administrative costs, 40 percent will go to the Community Grants Reinvestment Fund, 40 percent will support general education through the State Lottery Fund, and 20 percent will be allocated to the Drug Treatment and Public Education Fund.

Tax revenue from states that have legalized adult-use cannabis has surpassed expectations, Heastie said. Colorado usually collects more than $20 million a month, and California collects more than $50 million a month. In fiscal year 2019, Washington State collected a total of $395.5 million in legal marijuana income and licensing fees, Heastie said.

Opt-Outs

Cities, towns and villages would be allowed to pass local legislation prohibiting certain retail establishments from opening within their borders, but the MRTA includes provisions for voters to overturn the opt-out.

And while they can opt-out of retail licenses, they cannot opt-out of other types of licenses. These opt-outs would also not prohibit the adult use of cannabis. Cities, towns and villages may also reasonably regulate the time, place and manner of operation of retail establishments.

Hawley disappointed with passage of marijuana legislation

Assemblyman Steve Hawley, R-Batavia, issued this statement:

“What passed in the Assembly today has no basis in justice or science, and I fear that the revenue this bill projects our legal marijuana program will bring in has blinded them to the real costs of this legislation.

“What we know is that in other states, driver impairment rates have risen nearly universally, and these factors have caused states like Colorado to pay about four dollars in damages for every dollar earned in revenue. The passage of this legislation will come with real consequences that we will be left to pay for in the years to come, both financially and in terms of human health and human lives. I feel this will be a decision we look back on, wishing we had given it more thought.”