After years of failed attempts, New York has legalized adult-use cannabis, creating one of the largest adult-use markets in the country. The House passed the Marijuana Regulation and Taxation Act by a vote of 100 to 49, while the state Senate approved the bill by a margin of 40 to 23. The governor signed the cannabis legislation on March 31, just one day after legislators approved the bill.
The adult-use market is expected to eventually generate $350 million in yearly tax revenue and billions of dollars in annual sales. The new market will generate new businesses and thousands of jobs for the cultivation, distribution and sale of cannabis products. Cannabis products will be taxed at 13 percent with nine percent going to the state and four percent to localities.
The robust program will also reinvest millions of dollars of cannabis tax revenues into minority communities affected by the war on drugs and sets aside nearly half of the cannabis licenses for individuals from underrepresented communities.
“By placing community reinvestment, social equity, and justice front and center, this law is the new gold standard for reform efforts nationwide,” stated Melissa Moore, New York state director of the Drug Policy Alliance.
Forty percent of cannabis tax revenue will be directed to the disenfranchised communities and automatic expungements for cannabis-related offenses will begin to take place. Those with past convictions and past involvement with the illicit cannabis market will be able to participate in the new legal market as well. The social equity program will offer grants, low-interest loans and incubator programs to assist in operations.
The number of licenses will be determined by regulators and an advisory board “to ensure a competitive market where no licensee is dominant in the statewide marketplace or in any individual category of licensing,” according to Marijuana Business Daily.
The measure establishes a Cannabis Advisory Board to make policy recommendations on licensing and grant approvals from the Community Reinvestment Fun. Additionally, an Office of Cannabis Management with an executive director, a chief equity officer and a five-member board will also be created. The office will evaluate license applications by social equity status, commitment to environmentally sound practices, public health and fair labor practices.
The state’s medical cannabis operators, which is currently capped at ten companies, will be able to enter the profitable adult-use market by paying a one-time fee with a jump start on the state’s adult-use market. The large licensing fees to enter the market would help fund the social equity programs in the state. Each medical cannabis company will be allowed to operate three adult-use dispensaries.
Additionally, the bill allows microbusinesses to have vertical operations, but prohibits vertical integration for other licensees in an effort to protect from large operators controlling the market.
Localities will be given the option to opt out of retail sales and consumption site areas.
Some parts of the law went into effect immediately. According to the bill, New Yorkers are now able to possess 3 ounces of cannabis flower or 24 grams of concentrated forms of the plant, such as oils. However, sales of adult-use cannabis will not become legal for roughly 18 months while the state draws up regulations. The legislation provides protections for cannabis consumers in the workplace, housing, family court and in schools, higher education.
Prepare for New York Adult-Use Cannabis Business Opportunities
To learn more about the new law and begin preparing for adult-use cannabis business opportunities in New York, download our New York Application Guide and Checklist.
The guide outlines all the action items you’ll need to consider when applying for and establishing a marijuana business. You’ll be able to learn about business application topics from real estate and financial planning to staffing and team building activities.