New York Gov. Andrew Cuomo (D) included marijuana legalization in his budget proposal on Tuesday, setting the stage for another reform push in the legislature as the 2020 session gets underway.
While Cuomo put a similar plan in his budget last year, he ultimately dropped it as it became clear that lawmakers could not come to an agreement on the finer points of legalization ahead of legislative deadlines. His administration is optimistic that this year will be different.
According to the new proposal, New York stands to receive $20 million in revenue for the 2021 fiscal year and $63 million in 2022, according to the governor’s projections. By 2025, the amount is expected to rise to $188 million.
Watch Cuomo discuss marijuana during his budget speech in the video below:
“Legalize adult use cannabis,” Cuomo said during his budget speech. “I believe it is best done in the budget. I said that last year. I believe the budget is the opportunity, frankly, to make some tough decisions and work through tough issues that without the budget can often languish, and I suggest that we get it done in the budget.”
“This year Governor Cuomo is proposing a comprehensive regulatory approach to legalize cannabis, creating a new Office of Cannabis Management to specialize in cannabis regulation—overseeing the medical, adult-use and hemp programs,” his office said in a press release. “The proposal will administer social equity licensing opportunities, develop an egalitarian adult-use market structure and facilitate market entry through access to capital, technical assistance and incubation of equity entrepreneurs.”
“The proposal will also correct past harms to individuals and communities that have disproportionally been impacted by prohibition. To safeguard public health, the proposal limits the sale of cannabis products to adults 21 and over and establishes stringent quality and safety controls including oversight over the packaging, labeling, advertising and testing of all cannabis products. These efforts will be done in coordination with neighboring states Connecticut, New Jersey and Pennsylvania. The Governor will also propose creating a first of its kind Global Cannabis and Hemp Center for Science, Research and Education with SUNY and other expert partners.”
Under the proposal, there would be three levels of taxes. A 20 percent tax would be imposed on cannabis sold by any entity to a retailer. Cultivators would be taxed at $1 per dry weight gram for flower, trim would be taxed at $0.25 per dry weight gram and wet cannabis would be taxed at $0.14 per gram. Local jurisdictions with a population of at least one million people that allow marijuana businesses to operate would receive revenue from a separate, two percent tax.
“The Budget regulates and controls the production, distribution, transportation, and sale of cannabis, cannabis related products and medical cannabis within the NYS, for the purposes of fostering and promoting temperance in their consumption, to properly protect the public health, safety, and welfare and to promote social equity,” the proposal states.
The budget also calls for workforce increases at certain state agencies, including bolstering resources at the Division of Alcohol Beverage Control “to support the new Office of Cannabis Management (OCM).”
OCM will oversee a “first-in-nation comprehensive cannabis regulatory framework” that “centralizes all the licensing, enforcement and economic development functions in one entity.” It will “administer all licensing, production, and distribution of cannabis products in the adult-use, industrial, and medical cannabis markets,” according to the plan.
New York’s hemp regulators would also benefit from the budget proposal, with Cuomo calling for $1.1 million in “resources to support nine additional hemp oversight and inspection related staff.”
Cannabis reform has become a major issue for Cuomo, who only came to embrace legalization at the end of 2018 after he previously described marijuana as a “gateway drug.” Since then, he’s spent months negotiating with lawmakers about the specifics of an adult-use legalization bill, and he’s also helped arrange meetings with governors in the region to develop a plan for coordinated marijuana regulations.
While legalization didn’t come together last year, Cuomo did sign legislation expanding the state’s cannabis decriminalization policy and providing for expungements for those with prior marijuana convictions.
In his State of the State address earlier this month, the governor reiterated his commitment to legalizing marijuana in the Empire State, though he emphasized that the economic benefits “would be a hollow victory” if a legal system didn’t include social equity and restorative justice provisions.
The budget proposal aims to create a three-tier market structure—similar to how alcohol is distributed now— for the marijuana industry, and would generally prohibit vertical integration of businesses. That, along with licensing limits and supply management, are intended to “control market concentration and encourage social equity applicant participation,” the governor’s office said.
Technical assistance, training, loans and mentoring would be offered to marijuana business applicants that qualify under social and economic equity criteria.
Tax revenue would go toward implementation costs, traffic safety efforts and the social and economic equity plan, as well as substance misuse, harm reduction and mental health treatment and prevention programs, among other things.
Counties and cities with a population of 100,000 or more would be able to opt-out of allowing cannabis businesses in their jurisdictions.
Home cultivation of medical cannabis would be allowed, up to four plants per household, but recreational consumers would not be able to legally grow their own marijuana.
Cuomo’s proposal, or at least the idea of legalization in general, benefits from majority public support in the state, according to a poll that was released on Tuesday. The institute found that 58 percent of New Yorkers favor the policy change—the highest percentage reported in the state.
New York is one of several states where broad cannabis reform is expected to be taken up this year. In the Northeast alone, Rhode Island’s governor called for a state-run cannabis model in her budget plan, New Hampshire lawmakers plan to pursue non-commercial legalization and in New Jersey, the legislature approved a referendum to put the question of recreational legalization before voters during the November election.