After years of political jockeying, New York seems poised to finally pass a bill legalizing adult recreational cannabis use through retail establishments and home-growing. The bill seeks to balance safety, small business growth, and racial equity for historically disadvantaged communities. The regulated sale of cannabis will see an effective sales tax rate of 13% and will be heavily regulated by a newly created Office of Cannabis Management.

 Key provisions of the bill are:

  • Dedicating 40% of revenue to reinvestment in communities disproportionately impacted by the drug war, with 40% to schools and public education, and 20% to drug treatment, prevention and education.
  • Equity programs providing loans, grants, and incubator programs to ensure broad opportunities for participation in the new legal industry by people from disproportionately impacted communities as well as by small farmers.
  • A goal of 50% of licenses going to equity applicants.
  • Elimination of penalties for possession of less than three ounces of cannabis.
  • Automatic expungement of records for people with previous convictions for activities that are no longer criminalized.
  • Establishment of a well-regulated industry to ensure consumers know exactly what they are getting when they purchase cannabis.

In terms of regulating the business operations, the bill provides as follows:

  • Establishes an Office of Cannabis Management with a board comprised of 5 members - 3 appointed by Governor and 1 by each legislative house, with the chair subject to Senate confirmation.
  • Establishes an Executive Director appointed by the Governor subject to Senate confirmation, and a Chief Equity Officer subject to approval by at least 4 members of the board.
  • Establishes a Cannabis Advisory Board representing a broad range of communities of interest, which will be responsible for approving grants from the Community Reinvestment Fund as well as making policy recommendations and reporting on the state of the cannabis program.
  • Grants the Office of Cannabis Management powers to evaluate license applicants use a broad range of metrics, including social equity status, commitment to environmentally sound policies, public health, and fair labor practices.
  • Expands the medical cannabis program allowing for additional licensees, expanded patient access, and a broader range of product types.
  • Allows current Registered Organizations limited access to the adult use market in exchange for licensing fees that will help fund equity programs. The legislation prohibits vertical integration for all other licensees except micro-businesses to protect the retail sector from being controlled by larger cannabis producers, and establishes a goal of 50% of licenses going to equity applicants.
  • Allows limited homegrow of three mature and three immature plants per adult for both medical patients and in the adult use program, with a maximum of six mature and six immature plants per household, subject to regulation by the Office of Cannabis Management.
  • Provides funding for training drug recognition officers and expands traffic safety protections, including the development of roadside testing technology.
  • Allows for localities to opt out of retail sales at the city, town, and village level
  • Sets a 9% sales tax on cannabis, plus an additional 4% tax split between the county and city/town/village, plus an additional tax based on THC content as follows: 0.5 cents per milligram for flower, 0.8 cents per milligram for concentrated cannabis, and 3 cents per milligram for edibles.