New York’s Comprehensive Cannabis Legislation Released

The revised version of New York’s comprehensive cannabis legislation that legalizes recreational cannabis and expands New York medical cannabis program has (finally) been released. Still titled the Marijuana Regulation and Taxation Act (the MRTA), the revised legislation more closely resembles the original version of the MRTA than Governor Andrew Cuomo’s legalization plan, as was expected. The MRTA is expected to be voted on in the next week.

Before getting into the MRTA itself, two important caveats:

  1. The MRTA is not yet law. While it is widely expected that the MRTA will be passed in short order, our summary is based on the proposed final bill. However unlikely, additional revisions could be made before passage.
  2. The actual application process for prospective licensees has not yet been released. With that said, the MRTA provides a good indication of what will be considered as part of evaluating license applications. As detailed below, the Cannabis Control Board (CCB) and Office of Cannabis Management will be established after the MRTA is passed and will be responsible for creating and implementing a license application process in accordance with the MRTA.

Let’s get to the actual terms of the MRTA, which covers everything from the legalizing adult-use cannabis to the allocation of cannabis driven tax revenue toward social equity programs. A few highlights:

Establishing the Cannabis Control Board:  The CCB will be responsible for all aspects of cannabis regulation, including the allocation of licenses, licensing regulations and requirements, and general oversight of the industry. The CCB will be comprised of a 5-member board, with the governor appointing three members and the Assembly and Senate each appointing one member.

Legalizing Adult-Use Cannabis:  Recreational cannabis sales and consumption will be legal for adults 21 and older. The MRTA eliminates penalties for possession of less than three ounces of cannabis and allows for expunging records for anyone with convictions for illegal activities that are no longer criminalized.

The MRTA also permits delivery of cannabis and “consumption sites” where marijuana can be consumed. Cities, towns, and villages will be given until the end of the year to opt out of having retail dispensaries or consumption sites within their respective jurisdictions.

Identifying the Types of Licenses for Adult-Use Cannabis:  The CCB will issue separate licenses for cultivators, processors, cooperatives, distributors, retailers, on-site consumption, deliveries, nurseries, and microbusinesses. Vertical integration will generally be prohibited, with licensees limited to a single license.  The exception here is microbusinesses, which will be able to utilize a vertically integrated model.

Creating a Social Equity Program:  The MRTA sets a goal of issuing 50% of licenses for distribution and retail to social equity applicants. The definition of “social equity applicant” includes people with past marijuana convictions or who have relatives with such records, people who live in economically distressed areas or places where cannabis criminalization has been enforced in a discriminatory manner, individuals with income lower than eighty percent (80%) of the median income of the county in which the individual resides, minority- and women-owned business, disabled veterans, and financially distressed farmers.

General Criteria for Applicants:  Although the CCB will be responsible for creating the specific criteria for prospective applicants, the MRTA includes the following criteria that “may” be considered by the CCB:

  • Whether the applicant is a social and economic equity applicant.
  • The applicant’s ability to demonstrate effective controls against the illegal diversion of cannabis.
  • The applicant’s ability to comply with applicable state laws and regulations.
  • The applicant’s and its officers’ ability to properly carry on the activities for which a license is sought, including with assistance from the social and economic equity and incubator program, if applicable.
  • Whether the applicant possesses or has leased sufficient land, buildings, and equipment to carry on the activities described in the application or has a plan to do so if qualifying as a social and economic equity applicant.
  • If a non-social and economic equity applicant, whether such applicant sets out a plan for benefiting communities and people disproportionately impacted by the enforcement of cannabis laws.
  • Whether it is in the public interest that the applicant be granted a license.
  • Whether the applicant and its managing officers are of good moral character and do not have ownership or controlling interests in more licenses or permits than allowed by the MRTA.
  • Whether the applicant has entered into a collective bargaining agreement.
  • The applicant’s contribution to communities and people disproportionately harmed by enforcement of cannabis laws.
  • For adult-use cultivator or processor applicants, the environmental and energy impact of the facility to be licensed.

Expanding New York’s Medical Cannabis Program:  The eligibility for patient certification is expanded to require only that the patient’s physician determine, “in the practitioner’s professional opinion and review of past treatments, [that] the patient is likely to receive therapeutic or palliative benefits from the primary or adjunctive treatment with medical use of cannabis for the condition.” Qualified patients will also now be allowed to obtain a 60-day supply.

With all of that said, the above is only a high-level overview of the MRTA and several (but certainly not all) noteworthy provisions.  Over the next few weeks, we will provide in-depth summaries of each component of the MRTA, as well as the license application process as information becomes available.

We will be doing all of that from right here in New York. Please feel free to contact us with any questions.