New York Marijuana Legalization – Now What?

New York Marijuana Legalization – Now What?

On March 31, 2021, Governor Andrew Cuomo signed legislation that legalized the recreational use of marijuana in New York State. Now that marijuana is legalized, it will change the way the criminal justice system approaches prosecution, it will create new avenues for New York’s entrepreneurs, and develop a system to facilitate licensing with social equity in mind.

So, are New Yorkers able to possess marijuana now?

The medicinal use of marijuana was already legal in New York.  But now all New Yorkers over the age of 21 can carry up to three (3) ounces of marijuana, and keep up to five (5) pounds of it in their home for personal, recreational use.  New Yorkers will also be able to grow their own marijuana at home, but not until the state begins to issue retail licenses as further described below.

Does that mean I can start using marijuana recreationally today?

It gets a bit complicated because although New York has legalized the recreational use of marijuana, the state has not yet begun issuing licenses for the purchase of marijuana through dispensaries – so marijuana that New Yorkers currently possess was technically purchased illegally.  However, New Yorkers are allowed to smoke marijuana wherever they are allowed to smoke tobacco.  That excludes smoking within 500 feet of a school.

What about New Yorkers with previous marijuana convictions?

As part of New York’s justification for legalizing the use of recreational marijuana, the state acknowledged the disproportionate differences between how minority communities and others were impacted by the criminal prosecution of marijuana-related offenses.  For that reason, New Yorkers who were convicted of marijuana-related offenses that are no longer criminally prosecuted will have their records expunged.

The law will allow for several social justice initiatives, including allowing formerly incarcerated individuals to have a seat at the table, so-to-speak, through positions on the advisory board.

Can I get involved in the marijuana business?

Not yet – but soon.  The law created the Office of Cannabis Management (“OCM”) which is tasked with issuing regulations to govern and regulate the industry in New York.  This will take time and some suspect that New Yorkers won’t be able to obtain a license for at least one (1) year from now, or possibly longer.  It also depends on whether your municipality will “opt into” allowing dispensaries.  Even if your municipality “opts out” of allowing marijuana businesses, it won’t prevent New Yorkers from recreationally using marijuana there.

But, that doesn’t mean New Yorkers shouldn’t be gearing up for the countless business opportunities that will be available to them once licenses are issued.  Before the state begins issuing licenses, New Yorkers can start doing some preparation work to secure their business – locking down a website domain name for your business-to-be, for instance, can go a long way.

Which licenses will I be able to obtain?

It depends on what you are hoping to accomplish.  “Retail licenses” are those allowing New Yorkers to start their own dispensaries – like those that have become massively popular in Colorado.  “Cultivator licenses” will allow New Yorkers to grow, plant, and harvest marijuana for sale to other licensed processors in New York.  But as we detailed in a previous post, there are some restrictions.  For one, New Yorkers who obtain a cultivator license won’t also be able to get a retail license.

Once these details are ironed out by OCM, New Yorkers can start envisioning a state where marijuana is readily available through delivery, dispensaries, and marijuana lounges.  Those, too, will come with some restrictions, as New Yorkers possessing a license for on-site consumption will not be allowed to obtain a license for a dispensary or cultivator license.  Essentially, the state is trying to give as many New Yorkers the opportunity to become involved in the cannabis industry as possible – but will prioritize consideration of applications to members of the community who have historically been underserved and impacted “by the enforcement of cannabis prohibition,” as stated in the Marijuana Regulation and Taxation Act.

The law aims to give at least one-half of the issued licenses to members of those communities – those who operate minority and women-owned businesses, distressed farmers and service-disabled veterans. It is still too early in the process to determine which residents qualify, as OCM has not released guidance regarding the same.  New York residents who were once convicted of marijuana crimes will be able to obtain licenses as a part of the law’s social equity goals.

Will marijuana products be taxed?

Marijuana products will have a 13% sales tax in New York State, which is slightly lower than Colorado with a sales tax of 15%.  Nine percent (9%) of the tax will go to the state, while 4% will go to the local municipality.

If you have any questions about pursuing a marijuana license in New York State, or questions about New York’s marijuana legalization, The Wagoner Firm PLLC can assist you. Contact: (518) 400-0955.