ALBANY — After hours of questions and debate Tuesday, lawmakers in both chambers of the state Legislature passed legal recreational marijuana for adults 21 and older after 90 years of prohibition.
The Marijuana Regulation and Taxation Act immediately legalizes possession of the psychoactive drug derived from cannabis and expunges previous marijuana-related convictions from all New Yorkers’ records.
The bill creates a number of adult-use cultivator, processor and distributor, nursery and microbusiness licenses, among others. At least 50% of licenses will be issued to social equity applicants involved in the adult-use program. Officials will give extra priority to low-income applicants impacted by the war on drugs who have, or a close relative has, a marijuana-related conviction.
“Passage of this bill will mean not just legalizing marijuana, but investing in education and our communities, and bring to an end decades of disproportionately targeting people of color under state and federal drug laws,” Assembly Speaker Carl Heastie, D-Bronx, said in a statement. “The Assembly Majority knew it was important to do this the right way — in a way that would include those targeted and frequently excluded from the process. Now, this legal industry will create jobs across our state, including for those who have had their lives upended by years of unjust drug laws.”
Officials said Tuesday they expect recreational sales to begin in the state in about 18 months.
The Senate passed the measure with a vote of 40-23 late Tuesday afternoon. Three Democrats, Sens. Joseph Addabbo, Simcha Felder and Anna Kaplan, voted against the bill with 20 Republican colleagues. The measure passed the Assembly by a vote of 100-49 late Tuesday night.
“New York’s program will not just talk the talk on racial justice, it will walk the walk: Ending the racially disparate enforcement that was endemic to prohibition, automatically expunging the records of those who were caught up in the so-called ‘War on Drugs’ and channeling 40% of the revenue back into the most hard-hit communities,” said bill sponsor Sen. Liz Krueger, D-Manhattan, who has fought for marijuana legalization in New York since 2014. “It also puts 20% of the revenue into drug treatment and education, and 40% into our public schools. Not to mention building a multi-billion dollar industry for New York that encourages small businesses and farms while balancing safety with economic growth.”
The MRTA will create the Office of Cannabis Management and the Cannabis Control Board will be established to regulate the cannabis industry and will consist of five members, three appointed by the governor, and one appointment by each house of the Legislature.
Businesses that sell marijuana without the proper licensure can face up to $500 in fines per month of illegal possession, not to exceed $10,000.
Dozens of legislators, mostly Republicans, in both chambers fought hard against the bill’s passage Tuesday.
Assemblyman Brian Manktelow, R-Lyons, was one of several representatives to voice concerns about marijuana and its psychoactive chemical THC remaining in a user’s system for up to 30 days, and in a person’s hair for up to 90 days. He expressed worries about the extended timeframe and potential false-positive drug tests for workers exposed to secondhand smoke, which will create difficulties for employers.
“This is for responsible people who are over the age of 21,” replied bill sponsor Assembly Majority Leader Crystal Peoples-Stokes, D-Buffalo. “What you and I desire is to see everyone who is responsible behave properly, yes we would, but we know sometimes, they won’t. You can’t hold that against this bill because someone does something inappropriate every now and then.”
Manktelow asked the Assembly leader if she worked with Republicans or any officials across the aisle during negotiations.
“One or two of your people reached across the aisle to me — it just happened to be last week,” Peoples-Stokes said, adding no other Republican colleagues contacted her. “I’ve been here almost every day since January, and I have a phone number.”
Several lawmakers asked Peoples-Stokes if the push to legalize marijuana is because of tax revenue.
“I’m driving this because I want people to be free from using a product that people in your community use every day,” she said.
Legalization will include a 13% cannabis excise tax, with 4% split between the county of sale — 1% — and 3% slated for the municipality of the dispensary.
Marijuana sales are expected to bring $350 million to the state per year, and the industry could create between 30,000 and 60,000 jobs, according to the governor’s office.
The Assembly leader and Black and Latino representatives argued the MRTA is a step to address systemic racism and end the war on drugs.
More than 800,000 New Yorkers have been charged with marijuana-related offenses over the last two decades. About 94% of people in 2020 charged with marijuana-related arrests in New York City were Black or Latino.
Roughly 10% of marijuana users are Black, 12% are Latino and as much as 25% are white, Assemblyman Harvey Epstein, D-Manhattan, said.
“But the reality is that for white people, marijuana has been legal for decades,” said Epstein, telling the story of his brother-in-law who was addicted to drugs and in and out of rehab for 20 years, but never went to prison.
“There are no consequences as it exists today for white people,” Epstein said of marijuana use. “What we’re doing is dealing with a racial justice system. We’re changing laws and breaking barriers that impact communities of color who have been incarcerated for decades for something white people are allowed to do.” The nation’s black market, or underground, marijuana industry is estimated to be worth $3 billion.
“For the last eight years we have looked at what other states have done around these issues as well, and honestly, the number of people using cannabis decreases once you regulate it,” Peoples-Stokes said.
Studies show people born between 1945 and 1962, or the Baby Boomer generation, demonstrate the largest increases in marijuana use after legalization. Nine percent of the sales price will go to the Cannabis Revenue Fund, which will be used to fund the Office of Cannabis Management and cover the costs of state agencies to apply and adapt to the MRTA. After administrative costs, 40% will go to the Community Grants Reinvestment Fund, 40% will support general education through the State Lottery Fund and 20% will be allocated to the Drug Treatment and Public Education Fund.
The state’s tax rate on marijuana sales is based on a product’s total milligrams of THC. Edibles will be taxed at a rate of $0.03 per milligram of THC; concentrates will be taxed at $0.008 per of milligram of THC; and cannabis flower taxed at rate of $0.005 per THC milligram.
Municipalities including city, towns and villages are permitted to opt out of retail sales and dispensaries, but not growing facilities. Each municipality can instate separate smoking rules for bus stops, parks and other public spaces. Assemblyman Mark Walczyk, R-Watertown, voted against the measure, but said he was pleased it was not lumped into the 2021-22 proposed budget, which deadlines Thursday. “There’s a lot of New Yorkers who are smoking weed, there’s a lot of New Yorkers who are possessing weed and growing weed,” Walczyk said. “This thing is thick, so we’re calling this the end of 90 years of prohibition. We’re creating a Cannabis Control Board and an Office of Cannabis Management ... is this sounding New York enough for you yet?” Walczyk said legalization will increase the state’s black market supply and sales to evade New York’s marijuana sales tax.
“Here’s my prediction: This is not going to help farms in any real way in New York state, it’s not going to meet the revenue projections, it’s going to allow the black market to thrive,” he said. “In 20 years, you will see big marijuana get sued by this state’s attorney general for the health defects (legislators) caused. ... Our economy is not going to improve. What do we get? New Yorkers will get high. And based on the budget that’s coming in the next couple of days, maybe that’s the only benefit.”
The measure was sent to Gov. Andrew Cuomo’s desk for his signature. Cuomo has said he will sign the bill into law after the Legislature’s passage.
“Legalizing adult-use cannabis isn’t just about creating a new market that will provide jobs and benefit the economy — it’s also about justice for long-marginalized communities and ensuring those who’ve been unfairly penalized in the past will now get a chance to benefit,” Cuomo said in a prepared statement over the weekend. “I look forward to signing this legislation into law.”