New York Weighs Recreational Marijuana Legalization

New York Weighs Recreational Marijuana Legalization

With adult-use bills in the legislature and a race for governor this November, will New York ride the Northeastern wave of legalization?

July 16, 2018

As New York’s medical program continues to grow, advocates and cannabis businesses in the state are eyeing adult-use legalization, as well.

Those in favor of a regulated market in the state were certainly encouraged July 13, when the Department of Health delivered a report to Gov. Andrew Cuomo that supports legalization, stating that the “positive effects” outweigh the “potential negative effects.” The 74-page report identifies several reasons the state should legalize adult-use and estimates that taxed and regulated sales could generate up to $678 million in annual tax revenue.

The report is the result of a recreational marijuana study launched earlier this year by Gov. Cuomo to assess what legalization in New York might look like.

“We’re actually really encouraged by the way that New York has handled the evolution of the medical program as a precedent for the adult-use conversation,” said Nicholas Vita, CEO of Columbia Care, a medical licensee in the state. “I think one of the most important examples of that relates to their decision to expand qualifying conditions. Every time the department has made that decision, it’s been rooted in data. The department’s been able to monitor a lot of utilization information, a lot of efficacy information, a lot of real-time feedback it’s been able to pull from the medical community and from licenses alike, and patients. … That’s a huge differentiator because in most states, the [regulators] don’t have the line of communication and the ability to provide that level of oversight and interaction with the licensees.”

Before the final study was released, Howard Zucker, the state health commissioner, confirmed last month that the ongoing study concluded that the state should move ahead with legalizing and regulating adult-use marijuana.

“As we move from a medical to … a broader form of regulation, we think that New York—by applying a similar logical approach that’s proven by evidence and data—will ultimately yield better policy outcomes that will be to the benefit of New York state,” Vita said. “It’s really, really fortunate.”

The study’s final report and recommendation was much-anticipated by industry stakeholders.

“There’s zero transparency in this process,” said David Holland, principle of the Law Offices of David Clifford Holland and executive and legal director of Empire State NORML. “This has been an ongoing problem. We don’t think Cuomo [was] in any rush to have that report released.”

Holland also works with the New York Cannabis Bar Association, which has made Freedom of Information Act (FOIA) demands regarding the study that have not yet been responded to, he said. 

Some adult-use legalization bills have been introduced in the state legislature, such as the Marijuana Regulation and Taxation Act (MRTA), which NORML has supported, Holland said. However, there may not yet be enough support.

“Unfortunately, there have not been enough voices yet to enable us to pass that legislation through,” Holland said. “It’s still a well-discussed topic, but unfortunately it has not been able to work its way to passing.”

New York’s legislature hasn’t been as active as recent headlines would make it seem, however, as opposed to New Jersey, which has multiple bills that, although problematic in some ways, seem closer to passing.

And organizations like Columbia Care are surely looking forward to being involved in the adult-use regulatory process, to provide feedback and share lessons learned. “There are a number of bills on both sides, but I think there will be a broader conversation that takes place that we hope to be part of,” Vita said. “We’ve tried very hard to focus on the execution and the administration of the program and regulations that are developed by the policymakers, rather than influence the policymakers themselves, but there’s certainly an opportunity that exists for us to engage with those decisionmakers at the right time and in the right way if we’re invited to. We hope to have a voice there.”

Looking ahead to November’s gubernatorial election, Democratic candidate Cynthia Nixon is challenging Cuomo in the primary election this September, and has been very vocal about legalization.

“Obviously having a primary challenger who is very supportive of adult-use seems to have encouraged Gov. Cuomo to look more closely at the issue,” Marijuana Policy Project (MPP) general counsel Kate Bell said.

And should adult-use legalization pass in New York, the forthcoming regulations will be the next challenge, particularly in dealing with social-use issues, Bell added. “For example, Las Vegas has been trying to move forward on [social-use regulations] because, like New York, Las Vegas has tremendous numbers of tourists, and they’re going to come there and they’re going to want to buy their cannabis, and then where are they supposed to consume it? Right now, there’s no legal place for people to consume.”

In the meantime, other political threads are slowly signifying a shift toward more supportive attitudes in the state—and in the country’s largest city. District attorneys from Manhattan and Brooklyn have said they are making marijuana a low-level enforcement priority, Holland said. “There’s been a lot of movement now to say, ‘This is not where we should be allocating our resources, combating what is now legal in 31 states and should also fall under the same rubric or at least low enforcement priority for New York City.’”

In addition, New York’s financial regulator, Maria T. Vullo, recently encouraged state-chartered banks and credit unions to work with medical marijuana and industrial hemp businesses in the state, which may be another encouraging sign for the industry.

“That’s really the key thing that needs to be addressed, and that needs to be addressed while states can take certain actions to try to encourage banks,” Holland said. “It takes a lot to get a bank that’s … federally regulated … to not feel a bit nervous about taking these funds because of allegations of money laundering and everything else.”

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