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Sunday, Jul 3, 2022
Mugglehead Magazine
Alternative investment news based in Vancouver, B.C.

Industry update

New York expected to legalize adult-use cannabis next week

After three years of failure, New York Gov. Andrew Cuomo says his state could pass adult-use legislation by April 1

New York lawmakers expected to vote on adult-use cannabis next week
New York lawmakers expected to vote on adult-use cannabis next week

New York Gov. Andrew Cuomo said Wednesday that he and state lawmakers are inches away from finalizing a bill to legalize recreational cannabis.

For the third straight year, the governor and legislative leaders in the Empire State are trying to resolve differences to get a legal cannabis bill past the finish line. Key issues include how cannabis tax revenue is allocated, as well as technical issues such as technology used to detect impaired driving.

Under the Marihuana Regulation and Taxation Act, adults 21 years and older would be able to possess up to three ounces of weed. The act would also launch a new state regulator to set up three separate markets for adult-use, medical and hemp-derived CBD products.

The latest deal that New York lawmakers brokered with Cuomo includes a 13 per cent sales tax on recreational cannabis products, with 9 per cent going to the state and 4 per cent going to municipalities.

In a press conference on Wednesday, the governor said negotiations are close, “but we’ve been close three times before.”

“If we were playing horseshoes, we’d be in good shape. But this is not horseshoes. You either get it done and sign a bill or you don’t,” he said.

For Cuomo getting the cannabis bill past the goal line is a top priority, but the last few inches tend to be the toughest.

New York lawmakers have until April 1 to include the measure in the state budget.

A vote on stand-alone legislation could happen as soon as next week, and once a law passes it would take one year for recreational sales to be launched.

With surrounding states such as New Jersey and Massachusetts already legalizing adult-use weed, Cuomo says it’s now essential that New York follows.

“We have passed the point of legalized cannabis,” the governor said. “The only question is do we regulate it here, do we gather the revenue here or do we have people driving to New Jersey — it is right there — or to Massachusetts if you’re in the northern part of the state?”

There are roughly 1.5 million regular cannabis users in New York, according to the state Senate.

Policymakers have previously estimated that adult-use cannabis sales in New York could reach US$3.1 billion and generate as much as US$436 million in tax revenue. New York City could accrue an additional $336 million in tax revenue, according to a report.

Current legislation would direct 50 per cent of tax revenue to a community fund aimed at giving back to communities that have been disproportionately affected by the war on drugs.

Read more: New York activists add last-minute pressure to pass progressive weed laws

Companies with medical cannabis licences could have a head start over newcomers when New York opens adult-use sales.

Five of the largest U.S. multi-state operators currently hold medical dispensary and production licences in New York, including Curaleaf  Holdings Inc. (CSE: CURA) and Green Thumb Industries Inc. (CSE: GTII).

Existing medical dispensaries could add four additional sites under the proposal.

However, the state would only allow small companies to become vertically integrated for recreational sales. That means larger operators would be limited in holding adult-use cultivation, processing, distributing and dispensing licences.

Currently, 15 states have legalized weed for adult use and 36 states permit medical cannabis.

New York’s cannabis deal is being negotiated as Cuomo faces an independent probe into multiple scandals including allegations of sexual harassment or inappropriate behavior from seven women.

There’s also a federal investigation of his administration’s handling of Covid-19 deaths in nursing homes.

Top image via Governor Andrew Cuomo/Flickr Commons


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