Years of failed negotiations between state legislators and a $8 billion budget shortfall later – New York will be joining its neighbors, Vermont, New Jersey Massachusetts, in legalizing recreational marijuana use under the New York State “Marijuana Regulation and Taxation Act” (the “Act”).
From an income-generating standpoint, the New York legislators expect the legalization of marijuana to stimulate the state’s economy in the form of $350 million in annual revenue, including a 9% sales tax on cannabis products. The ever-growing marijuana business could alter the makeup of New York’s economy, and create revenue streams for New York residents that couldn’t have been legally pursued in the past.
The monumental decision to legalize marijuana doesn’t just stop there, though. A new Office of Cannabis Management, will be tasked with ironing out the finer details of effectuating the legalization.
The law itself, however, does provide significant insight into what the marijuana business will look like in New York, and for the state’s residents and entrepreneurs who have long wished to engage in the business – they can now begin to develop their plans for the future.
What the marijuana business could look like in New York
Prior to legalizing the use of recreational marijuana, Gov. Andrew Cuomo hoped to find “regional coordination – and unsurprisingly, New York’s version of legalized marijuana will look very similar to that of Massachusetts.
New York residents who are 21 and older will be able to possess three ounces of marijuana for recreational use, with future restrictions set by the Office of Cannabis Management. But how will the marijuana products get to the consumer? For New Yorkers looking to get involved in the growing industry – understanding the various licenses will be key.
New York’s marijuana legislation allows for cultivating licenses, manufacturing licenses, and dispensary/retail licenses. Each licensing structure comes with its own set of complex regulations, and fees associated with it.
Naturally, many are already looking for ways to get involved in the innumerable business opportunities – the brick and mortar dispensaries, adult-use on site consumption sites, and delivery services, to name a few.
But, keep in mind that the Act does aim to prevent the monopolization of marijuana business in New York, and has already established a number of restrictions on licensing.
For instance, the Act restricts New Yorkers possessing an adult-use cultivator’s license from holding a retail dispensary license. The Act also allows for adult-use on-site consumption licenses – a marijuana café, if you will – but those, too, come with restrictions, as individuals holding such a license won’t be able to hold an adult-use retail dispensary license. If you’re imagining a marijuana business that also does delivery – think, a “GrubHub” style of business for marijuana – consider the restrictions, as the Act does not allow a person to have a direct or indirect financial interest in more than one delivery license.
And if you’re intrigued by any of these ideas, understand that there won’t be a shortage of New Yorkers looking to obtain these licenses – and those wanting to tap into the expanding market should understand the outlined licensing priorities.
Notably, the Act prioritizes “consideration of applications by applicants who are from communities disproportionately impacted by the enforcement of cannabis prohibition or who qualify as a minority or women-owned business, distressed farmers, or service disabled veterans.” Such qualifications will be determined by state administrators, but the law does offer some guidance as to which groups will qualify for priority licensing – specifically, business enterprises that are “at least fifty-one percent owned by one or more minority group members.” The law also provides insight into which type of business would qualify as a “women-owned business,” and would thus receive priority for licensing.
What, exactly, does this mean for New Yorkers looking to get involved? It eliminates the idea of a free-for-all when the state begins to issue licenses for marijuana businesses, particularly retail licenses that are of keen interest.
Now, people wanting to take part in a marijuana business in New York should start thinking ahead – because, again, there won’t be a shortage of people trying to access this emerging market. The Act will allow for a variety of licenses and business opportunities, but obtaining a license, understanding the restrictions, and staying within the guidelines eventually provided by state administrators will require legal expertise. While starting a marijuana business will intrigue countless people, the law is clear that a failure to abide by the regulations could lead to the imposition of license revocations or penalties – including the revocation or cancelation of licenses before they are even issued.
Branding considerations will require legal advice, too, as marijuana remains illegal at the federal level and the United States Patent and Trademark office will not register trademarks associated with marijuana consumption. Instead, those looking to get involved in the marijuana business should seek to secure domain names and look for other creative ways to create and protect their intellectual property.
If you have any questions about pursuing a marijuana license in New York State, The Wagoner Firm PLLC can assist you with your needs. Contact: (518) 400-0955.
Us
ntact Us