Governor Andrew Cuomo signed legislation legalizing adult-use marijuana on Wednesday morning, fulfilling a key component of his 2021 State of the State agenda.
The signing comes after a three-way agreement made on Sunday between the governor’s office, Senate Majority Leader Andrea Stewart-Cousins, and Assembly Speaker Carl Heastie.
Under this legislation, the development of the adult-use cannabis industry has the potential to create significant economic opportunities. Tax collections from the program are projected to reach $350 million a year. The industry also expects to create 30,000 to 60,000 new jobs.
“This is a historic day in New York – one that rights the wrongs of the past by putting an end to harsh prison sentences, embraces an industry that will grow the Empire State’s economy, and prioritizes marginalized communities so those that have suffered the most will be the first to reap the benefits.” Governor Cuomo said. “This was one of my top priorities in this year’s State of the State agenda and I’m proud these comprehensive reforms address and balance the social equity, safety and economic impacts of legal adult-use cannabis. I thank both the Leader and the Speaker, and the tireless advocacy of so many for helping make today’s historic day possible.”
The New York State Cannabis/Marijuana Regulation & Taxation Act contains the following provisions:
Establish the Office of Cannabis Management
The Office of Cannabis Management will be charged with enforcing a comprehensive regulatory framework governing medical, adult-use cannabinoid hemp. It will be governed by a five-member board, with three members appointed by the Governor and one appointment by each house. OCM will be an independent office operating as part of the New York State Liquor Authority.
The legislation will 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 legislation will create a two-tier licensing structure that will 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 will 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 implements a new cannabis tax structure that will replace a weight-based tax with a tax per mg of THC at the distributor level with different rates depending on the final product type. The wholesale excise tax will be moved to the retail level with a 9 percent state excise tax. The local excise tax rate will be 4 percent of the retail price. Counties will receive 25% of the local retail tax revenue and 75 percent will go to the municipality.
The legislation permits the sale of hemp flower in the cannabinoid hemp program and allows for smokeable forms only when adult-use retail stores are operational.
Adult-Use Cannabis Tax Revenue
All cannabis taxes will 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 will 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 and will carry the same penalties as it does currently.
Personal Possession and Home Cultivation
- Personal possession outside of the home: up to 3 ounces cannabis and 24 grams of cannabis concentrate
- Home possession: amends 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 after first adult-use sales begin 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 will be restructured to avoid the criminalization seen in prohibition. Reduced penalties will 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 will be prohibited and workplace safety protections will 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.
This legislation builds on years of work to understand and decriminalize cannabis for adult use. In 2018, the Department of Health, under Governor Cuomo’s direction, conducted a multi-agency study, which concluded that the positive impacts of legalizing adult-use cannabis far outweighed the negatives. It also found that decades of cannabis prohibition have failed to achieve public health and safety goals and have led to unjust arrests and convictions particularly in communities of color.
In 2019, Governor Cuomo signed legislation to decriminalize the penalties for unlawful possession of marijuana. The legislation also put forth a process to expunge records for certain marijuana convictions. Later that year, the Governor spearheaded a multi-state summit to discuss paths towards the legalization of adult-use cannabis that would ensure public health and safety and coordinate programs regionally to minimize the cross-border movement of cannabis products.