New York state officials finalized a deal Thursday to legalize recreational marijuana in the state, paving the way for a potential $ 4.2 billion industry that could create tens of thousands of jobs and become one of the largest markets. from the country.
After several failed attempts, lawmakers in Albany struck a deal with Governor Andrew M. Cuomo to legalize cannabis for adults 21 and older, a move that officials hope will help end years of racially disproportionate policing that saw black and Hispanic people arrested at low rates. marijuana loading levels much more often than whites.
The agreement would allow for the delivery of the drug and would allow club rooms or “consumption sites” where marijuana could be consumed, but not alcohol, according to details obtained by The New York Times. It would also allow one person to grow up to six marijuana plants at home, indoors or outdoors, for personal use.
If approved, the first legal marijuana sales are likely to be more than a year away: Officials must first face the daunting task of drafting the complex rules that will control a highly regulated market, from regulating wholesalers and dispensaries, until the allocation of crops. and retail licenses, until the creation of new taxes and a five-member control board that would oversee the industry.
The agreement was crafted with an intense focus on making peace in communities affected by decades of the war on drugs. Millions of dollars in tax revenue from cannabis sales would be reinvested in minority communities each year, and a considerable portion of business licenses would be reserved for minority business owners.
“A percentage of the revenue raised will be invested in the communities where people who suffered mass incarceration come from and in many cases are still living,” said Assemblywoman Crystal D. Peoples-Stokes, a Democrat who has spearheaded the legalization effort. in the lower house for years. “For me, this is much more than generating income – it is about investing in the lives of people who have been harmed.”
The governor’s office had previously estimated that legalizing marijuana could generate around $ 350 million in annual tax revenue once the program is fully implemented, which could take years.
With New York following the lead of more than a dozen states in legalizing recreational marijuana, Democratic lawmakers sought to shape their proposal on the best practices of other states, hoping to make New York’s program a national model.
The final text of the legislation was still under review Thursday, but a bill could be approved by the Democratic-controlled state Legislature next week, according to three people familiar with the negotiations.
“When this bill is finally voted on and signed, New York will be able to say that we have finally overturned harmful criminal justice laws that did nothing but ruin people’s lives,” said State Sen. Liz Krueger, a Democrat who led the negotiations in the chamber. “We can finally say that we will have a cannabis industry that assures people who buy the product that they are buying a legitimate product from legitimate companies.”
The years-long push to legalize recreational marijuana in New York, a proposal that often found its momentum stalled by some political travel cable, got an unexpected boost from the recent Cuomo political scandals.
Democrats began the year cautiously optimistic that they would strike a deal. New Jersey had recently legalized the drug, pressuring New York to do the same, and the state was in dire need of new tax revenue after the pandemic decimated state coffers.
For Democratic lawmakers, it was about bridging the gap between their marijuana bill and the governor’s proposal, which he unveiled earlier this year.
But the negotiations were called into question when several women began accusing Cuomo of sexual harassment in late February. The allegations, along with scrutiny over his handling of nursing homes during the pandemic, engulfed his administration in scandal and left his political future at stake.
However, it turned out that reaching a deal to legalize cannabis became a higher priority for Cuomo, as several lawmakers and lobbyists surmised that the governor may have wanted to divert attention from his aggravating crises. Marijuana legalization was both a headline-grabbing issue and a popular political move with voters.
Nearly 60 percent of New York voters are in favor of legalizing recreational marijuana, according to a March Siena College poll. Among black voters, a crucial part of Cuomo’s electoral base, to which he has been appealing recently, 71 percent said they were in favor of legalization.
The marijuana proposal was initially being negotiated as part of the state budget, which expires April 1, but lawmakers said it would be expedited to be voted on as a separate piece of legislation.
Cuomo usually wields great influence during budget negotiations, but as his scandals mounted and many members of his party began calling for his resignation, the governor’s stature decreased.
Suddenly, Democratic lawmakers had a new influence. They took the opportunity to lobby for their demands and negotiate a settlement that more closely reflects their existing legislation, the Marijuana Tax and Regulation Act, or MRTA, a proposal announced by a coalition of state activists.
Some veteran lobbyists and legislators, long accustomed to Cuomo’s heavy-handed bargaining tactics, said they were in awe of the torrent of concessions the governor was willing to make to reach a deal.
The governor had previously insisted that the executive branch retain most control over tax revenue, while lawmakers insisted on allocating a large portion of the proceeds to communities with high rates of marijuana application.
Under the current deal, lawmakers seemed to get their wish: Forty percent of most tax revenue would be reinvested in communities disproportionately affected by the war on drugs; 40 percent would go to public education; and the remaining 20 percent would go to drug treatment, prevention and education.
The retail sale of marijuana would be subject to a state tax of 9 percent and a local tax of 4 percent.
The deal it also contains “Equity programs” that would provide loans, grants and incubator programs for small farmers and people from disproportionately affected communities who want to enter the industry.
One goal of the legislation is for half of the program’s business licenses to go to so-called stock applicants, which could include disabled veterans, minority- and women-owned businesses, and people who have family members with a marijuana conviction.
The proposal would also remove penalties for possession of less than three ounces of cannabis and allow the automatic expungement of records of people with convictions for illegal activities that are no longer penalized.
The legislation will seek to improve the state’s existing medical marijuana program, which for years has been criticized for being too restrictive. It would significantly expand the list of covered medical conditions, in addition to allowing patients to smoke or vape medical marijuana and receive a 60-day supply of the drug, doubling the current 30-day limit. Medical marijuana companies could also enter the recreational market.
Patients could grow medical marijuana at home six months after the bill is enacted. Those interested in growing recreational marijuana at home would have to wait longer – 18 months after the opening of the first adult-use dispensary – to give the regulated market time to develop.
Staff members of the State Legislature met through Tuesday night and again Wednesday morning as they scrambled to reach consensus.
Among the final sticking points were safety concerns related to a potential increase in drunk driving if the drug were legalized, and how the state’s vehicle and traffic laws would address those concerns. Many Republicans, who are in the minority in the Legislature, oppose legalization, as do some doctors, law enforcement groups and the state’s PTA.
Cuomo, a Democrat in his third term, had long opposed legalization, describing marijuana as a “gateway drug” only a few years ago. His position evolved in 2018 when neighboring states spearheaded similar efforts and faced a major challenge from Cynthia Nixon, a progressive who made marijuana legalization a mainstay of her campaign.
Momentum accelerated when the Democratic Party regained full control of the state Legislature in 2018 for the first time in a decade and vowed to prioritize legalization. But attempts to do so repeatedly fell apart.
In 2019, a deal collapsed following differences over how to spend tax revenues from cannabis sales and dole out business licenses. In 2020, the response to the pandemic derailed a renewed legalization effort.
The measure to regulate the drug is aimed in part at absorbing the state’s illicit marijuana market, a goal that would largely depend on the convenience and affordability of legal cannabis products.
The cannabis market in New York is currently estimated at $ 4.6 billion and is expected to grow to $ 5.8 billion by 2027, according to a recent study commissioned by the New York Medical Cannabis Industry Association. The state could capture and tax $ 1.2 billion from that market by 2023 and $ 4.7 billion by 2027, depending on rules and regulations, according to the study.