Marijuana Legalization Votes on Tap in New York and New Mexico

Marijuana legalization bills could be on the desks of two more governors by the end of this week after negotiators worked out final details in New York and the governor of New Mexico called lawmakers back for a special session.

“I look forward to signing this legislation into law,” New York Gov. Andrew Cuomo (D) said after he and legislative leaders reached a handshake deal on measure that could lead to pot dispensaries opening as soon as next year.

Legalization could create 30,000 to 60,000 new jobs statewide, he said.

The legislation (S.854A /A.1248A) being brought up for Assembly and Senate votes in Albany this week could eventually generate about $350 million a year in special cannabis taxes: a 13% sales tax, with the money raised divided between the state (9%) and localities (4%), plus a distributor excise tax of as much as 3 cents per milligram of THC, the active ingredient in cannabis, using a sliding scale based on the type of product and its potency.

Tax revenue would be used to run and oversee the state cannabis program, with the remaining money divided between programs that try to help people rebuild their lives after marijuana possession arrests, aid for their neighborhoods, education, and drug treatment.

Like Cuomo, New Mexico Gov. Michelle Lujan Grisham (D), who called a special session to begin Tuesday, has made pot legalization a priority. In addition, a legalization bill (H.B. 2312) is awaiting the signature of Virginia Gov. Ralph Northam (D), and measures have been advancing through committees in the Connecticut, Delaware, Minnesota, and Rhode Island legislatures.

Kansas lawmakers have begun committee consideration of a medical marijuana bill (H.B. 2184), and in Illinois a pending bill (H.B. 3085) would lift a 30-gram pot possession limit and expunge criminal records.

New York’s legislation calls for the automatic expungement of records for people with previous convictions for activities that would no longer be criminalized when marijuana is legalized for use by adults 21 and older.

Local Impact

New York’s cities, towns, and villages would have nine months to opt out from having dispensaries and pot cafes in their communities.

“My goal in carrying this legislation has always been to end the racially disparate enforcement of marijuana prohibition that has taken such a toll on communities of color across our state, and to use the economic windfall of legalization to help heal and repair those same communities,” said state Senate Finance Committee Chairwoman Liz Krueger (D), who sponsored the legislation.

The bill allows for the personal cultivation of cannabis, with an adult 21 or older permitted to have up to three mature plants and three immature plants. Per household, the limit would be six of each kind of plant, according to the bill. Up to 3 ounces of cannabis and 24 grams of cannabis concentrate would be legally permitted for personal possession outside of the home.

Vertical Integration

New York wouldn’t be allowed to give out licenses that let a single company handle all parts of a recreational cannabis transaction — cultivation, processing, distributing, and dispensing, according to the proposal — with the exception of micro businesses. The bill would bar a licensed cultivator or processor from having a direct or indirect financial interest in a retail dispensary.

A state Cannabis Control Board and Office of Cannabis Management would decide how many licenses are issued and would be required to take small businesses into consideration and prioritize applicants from communities disproportionately impacted when marijuana was illegal. Priority also would go to those who make less than 80% of their county’s median income; those convicted in the past of a marijuana-related offense, and those with a convicted parent, guardian, child, spouse, or dependent convicted of a cannabis-related offense.

Adult-use cannabis could be sold at only three of a medical operator’s dispensaries, and they would only be able to distribute their own products, according to the bill. Those holding a medical dispensary license would not be allowed to hold another retail dispensary license. Ten companies have a medical license in New York, five of which are among the U.S.’s largest multi-state operators: Acreage Holdings, Columbia Care, Cresco Labs, Curaleaf, and Green Thumb Industries.

To contact the reporter on this story: Keshia Clukey in Albany, N.Y. at kclukey@bloomberglaw.com

To contact the editor responsible for this story: Katherine Rizzo at krizzo@bgov.com